In the study "Why Shopping's Set for a Social Revolution." Accenture looks at the market potential of social commerce. The term "social commerce" encompasses a person's entire shopping experience, from product discovery to the final purchase transaction, which takes place on a social media platform. Nearly two-thirds (64%) of social media users surveyed said they had made a social commerce purchase in the past year, which Accenture estimates equates to nearly two billion social commerce consumers worldwide.
A survey conducted in Switzerland by ZHAW shows that Swiss online retailers are still somewhat hesitant about social commerce (Werbewoche.ch reported).
The fact that social platforms serve as an entry point for online activities and that users consume news, entertainment and communication offerings there was demonstrated once again not least by the pandemic. The continuous increase in the amount of time users spend on social media underscores the importance of online platforms in everyday life. This also influences people's buying behavior. This opens up new revenue streams and opportunities for platforms and brands to design user experiences.
Smaller brands and individual companies can benefit from this development. 54% of the social media users surveyed expressed that they would like to support small and medium-sized businesses when purchasing via social commerce sites. At the same time, 64% and 57% of the respondents, respectively, stated that they would rather buy something for themselves when buying via social commerce platforms, taking into account the same sellers* or influencers*. This confirms the importance and potential of correct positioning on social commerce platforms.
"Social commerce can make it easier for smaller brands and individual entrepreneurs to creatively engage with customers, while also requiring big brands to rethink traditional e-commerce strategies," said David Holtmann, managing director of Accenture's consumer goods and services practice. "Getting social commerce right requires manufacturers, sellers* and brands to take their products and services to where consumers are and will be. A dynamic ecosystem is emerging in which platforms, marketplaces, social media and influencers interact. Data and expertise should be shared. This is the only way to create the right incentives for customers and offer the best customer experience in an integrated digital marketplace."
Still little confidence present
Despite the upward trend in social commerce, half of the social media users surveyed are concerned that purchases are not adequately protected or refunded when necessary. A lack of trust is thus becoming the biggest obstacle for the new sales channel, similar to the situation at the beginning of e-commerce.
"One of the main reasons for the reluctance to engage in social commerce to date is the lack of trust in the credibility of providers. Active social commerce users* point to insufficient guidelines for returns, refunds or exchanges and see room for improvement here," says Holtmann. "Lack of trust is a problem that can only be overcome slowly. However, providers* who focus on these consumer* concerns are in a better position to gain market share."
Who buys what?
Accenture predicts that by 2025, most social commerce purchases globally will be in apparel (18%), consumer electronics (13%), and home textiles (7%). In China, fresh food and snacks are also among the big product categories, accounting for 13%. Cosmetics and personal care, while smaller in terms of total social commerce sales, will quickly gain ground on traditional e-commerce. This category is expected to account for over 40% of digital spend on average in the major markets by 2025.
Further core results of the study
- Consumers in China, India and Brazil are using social commerce more frequently. Eight out of ten social media users in China use social commerce to make purchases in a particular category. In the UK and the US, the majority of social media users have never made a purchase via social commerce.
- Customers in China, India, and Brazil place more value on features that help them discover and evaluate potential purchases. In the UK and the US, on the other hand, prices and discounts are more important.
- Trust is more important for older generations than for younger people. Older shoppers value security features and appreciate familiarity with the brand. Younger generations are attracted to livestreams and trust buyer reviews more.
Accenture conducted a series of studies on social commerce to gain a better understanding of this market. As part of a Online survey 10,053 social media users in China, India, Brazil, the USA and the UK were surveyed between August 12 and September 3, 2021. In addition, interviews were conducted with buyers and sellers between May 26 and June 2, 2021.
Accenture's forecasts for the social commerce market were created using econometric models that take into account the optimization of consumer preferences to accelerate existing market dynamics. The social commerce market includes products or services ordered through social networks, regardless of the method of payment or fulfillment. It includes transactions between businesses and consumers (B2C) and between consumers (C2C).