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What Is Social Commerce?

  • How It Works

History of Social Commerce

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Social Commerce: Definition, Tactics, and Examples

social commerce business model definition

Thomas J Catalano is a CFP and Registered Investment Adviser with the state of South Carolina, where he launched his own financial advisory firm in 2018. Thomas' experience gives him expertise in a variety of areas including investments, retirement, insurance, and financial planning.

social commerce business model definition

Social commerce uses networking websites to promote and sell products and services. Social commerce involves the entire shopping experience over social media sites like Facebook, Instagram, and the X platform (formerly Twitter). This means products and services are marketed on these sites, which allow consumers to browse, shop, and make purchases. A social commerce campaign's success is measured by the degree to which consumers interact with the company's marketing through retweets, likes, and shares.

Key Takeaways

  • Social commerce is a form of e-commerce that involves the sale of products and services using social networking sites like Facebook, Instagram, and X.
  • The social commerce experience includes marketing, browsing, shopping, and completing purchases.
  • Retweets, likes, and shares measure the success of social commerce campaigns.
  • Social commerce also seeks to engage online shoppers by offering expert product advice and support.
  • Social commerce is distinct from e-commerce, which allows consumers to make purchases on dedicated e-commerce websites and apps.

How Social Commerce Works

As noted above, social commerce involves selling products and services over social media . It encourages social shopping tools, such as forums and communities, where buyers and sellers discuss their online shopping experiences and compare notes. It is an evolving field of online marketing that works in conjunction with social media and online shopping growth. Fashion and shopping-related blogs use social commerce and media to entice shoppers to purchase linked items online.

Social commerce professionals create and post messages and interactive features that promote online sales and other e-commerce initiatives. Some of the marketing tactics social commerce employs include:

  • Inviting users to vote on product style or choices
  • Offering personalized buyer options
  • Applying large and striking graphics to attract viewer clicks
  • Using videos to show the product in use and from multiple angles
  • Encouraging user-submitted photos, commentary, and feedback
  • Using celebrity endorsements of the product line
  • Linking directly to the checkout or shopping cart
  • Offering promotions or giveaways to users who share the product on their feeds

Many popular fashion blogs have Instagram accounts that allow followers to like, share, and comment on the offered product. The tagged article frequently links directly to the store's shopping cart or check-out desk. Consumer interactions (likes, retweets, and shares) determine the success of a social commerce campaign—the more they receive, the more successful they tend to be.

The popularity of social networks such as Facebook and Instagram allows vendors to showcase their products and quickly respond to follow buyer-led trends and fads.

In the article "Social Commerce: A New Electronic Commerce," Yao Zhong said the concept of consumer marketing promotions online first appeared on the internet in November 2005 in Yahoo! The site promoted their Shoposphere pick lists, which highlighted the most popular products.

The notion of social commerce developed further to engage online shoppers by offering reliable advice and support from online experts regarding their purchases. Marketing blogger Jeff Bullas identifies the following four brands as being among the best in the business:

  • Nordstrom, which pins a popular Pinterest label on store items that trend online
  • Coca-Cola, which personalized its labels on bottles in stores and then invited social media users to post photos of their name-branded soda with the hashtag #ShareACoke
  • Lolly Wolly Doodle, a fashion brand that allows followers to design and order their own clothes right on its Facebook page
  • Starbucks , which awards bonus points to customers who unlock Mayor badges on Foursquare

Don't confuse social commerce with social shopping. While social commerce collaborates with online vendors, social shopping is a collaboration of online shoppers who network together.

Social Commerce vs. E-Commerce

Don't confuse social commerce with e-commerce or online shopping. Although there may be some similarities between the two, they are inherently different. As noted above, social commerce is a form of e-commerce that takes place on social media sites. As such, the experience takes place directly and entirely over social media.

Online shopping, on the other hand, is a way for people to shop through sites and apps that are devoted entirely to a shopping experience without the social media aspect. For instance, people can make purchases for products and services on dedicated e-commerce sites like Amazon and Alibaba . Or consumers can make purchases directly from the websites of retailers, such as Walmart and Target .

How Does Social Commerce Work?

Social commerce is a shopping experience that takes place over social media. Companies can market their products and services while consumers can complete purchases entirely over social networking sites like Facebook, Instagram, and X. Social commerce also allows consumers to get support and advice from experts.

What's the Difference Between Social Commerce and Online Shopping?

Although they may seem similar, social commerce and online shopping are two different ideas. While social commerce provides consumers with the entire shopping experience through social media and networking sites, online shopping is done entirely on websites and apps devoted entirely to e-commerce. This includes sites like Amazon and Alibaba, as well as those of individual retailers like Walmart and Target.

Which Social Media Sites Boast the Highest Rate of Social Commerce?

Market research shows that Facebook is the dominant force in social commerce, reaching as many as 63.5 million social buyers in 2022. This figure is expected to increase to 71.1 million by 2026.

Social media allows you to connect, network, and share posts, photos, videos, and experiences. But now, they offer more than just a personal experience. Many social networking sites are now hubs for social commerce. This form of e-commerce allows you to connect with companies and marketers for a complete shopping experience. You can browse and complete purchases for goods and services with the click of a button—all without even leaving your favorite social media site.

Association for Information Systems. " Wuhan International Conference on e-Business: Social Commerce: A New Electronic Commerce ," Page 164.

JeffBullas. " 4 Brands That Have Cracked the Social Commerce Code ."

Insider Intelligence. " Retail Trends to Watch for 2023 ," Page 2.

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What Is A Social Commerce Business Model? Social Commerce Business Model In A Nutshell

Social commerce business models are designed to take advantage of social commerce, a relatively new phenomenon where eCommerce transactions take place on social media. Examples of this comrpise companies like SHEIN , Wish , WeChat .

Table of Contents

Understanding social commerce 

Before we delve into social commerce business models, it is worth spending a bit of time explaining social commerce.

Social commerce describes the buying and selling of goods and services on a social media platform such as Facebook, Snapchat, Instagram, and WeChat. This process allows consumers to complete transactions without ever having to leave their favorite apps.

The shift toward social commerce has been driven, like many trends, by the COVID-19 pandemic. Many platforms revamped their social commerce during this time to help retailers streamline their eCommerce experiences. Retailers can now open virtual storefronts that can be found organically or via paid advertising. To a lesser extent, the shift has been helped by consumers making more purchases on their smartphones and demanding a more seamless checkout process.

The trend has not gone unnoticed by businesses, with around 80% expected to be incorporating social media-based commerce by 2024 . The industry itself is expected to be worth an impressive $1948.5 billion by 2026 .

Three types of social commerce business models

As it stands, three different social commerce business models are starting to emerge. 

These are discussed below in more detail.

1 – Social commerce via social media platforms 

This is a B2C model where platforms such as Facebook and Instagram offer eCommerce functionality to merchants such as an online storefront and smart product discovery. Facebook Shops, for example, are customizable storefronts where sellers can choose featured products in addition to adapting various fonts, images, and colors to match their brand .

In some instances, the transaction is handled by a third party – though it is predicted that most social media sites will handle their own transactions in the future. Facebook has made moves to integrate Shopify in the U.S. market to allow sellers to complete the process via the app or in Messenger. 

2 – Social commerce apps with a reseller ecosystem

Some companies are bypassing the need to spend money acquiring new customers by leveraging the power of word-of-mouth and curated products within social groups. In essence, they can determine the products users enjoy simply by listening in on their conversations.

Meesho is an Indian social commerce company that enables small businesses to sell their products to consumers. Resellers can also sell long-tail products via other channels such as WhatsApp and Instagram, among others. 

Meesho allows sellers to add a margin of their choosing to the products they sell. When a sale is completed, the company handles the payment and then distributes the margin to the seller. With the above in mind, this means the second model can be either B2C or C2C.

3 – Social commerce apps without intermediaries 

Chinese giant Pinduoduo is one platform that connects producers with buyers without the need for an intermediary. Consumers are encouraged to come together and make bulk purchases to reduce their costs.

Though the model was previously used by social coupon site Groupon, the so-called “farm to fork” strategy employed by Pinduoduo is seen as revolutionary and has numerous benefits. The strategy promotes more sustainable food systems that have obvious benefits for biodiversity and the environment. 

However, it also increases food security and affordability for poorer consumers while also generating favorable economic returns for farmers and fostering competitiveness in the market.

Key takeaways:

  • Social commerce business models are designed to take advantage of social commerce, a relatively new phenomenon where eCommerce transactions take place on social media. Platforms such as Facebook and Instagram utilize a B2C social commerce business model where users can set up a customized storefront and handle payments. In some cases, the transaction is handled by a third party.
  • Meesha is an Indian B2C and C2C social commerce site that utilizes the inherent strengths of social media platforms. Through word-of-mouth product recommendations and curated product lists, small businesses and individual resellers can sell products across multiple platforms.
  • Chinese giant Pinduoduo connects producers with buyers without the need for an intermediary. Consumers pool their resources to bulk-buy and receive a discounted price without affecting a producer’s profit potential.

Key Highlights

  • Social Commerce: Social commerce refers to the buying and selling of goods and services on social media platforms like Facebook, Instagram, and WeChat. Consumers can complete transactions within their favorite apps without leaving the platform.
  • Driving Factors: The shift towards social commerce has been accelerated by the COVID-19 pandemic, as many platforms revamped their features to streamline eCommerce experiences. The increasing use of smartphones and demand for seamless checkout processes have also contributed to this trend.
  • Social Commerce via Social Media Platforms (B2C): Platforms like Facebook and Instagram offer eCommerce functionality, such as customizable storefronts and smart product discovery, to merchants. Transactions may be handled by the platform itself or through third-party integrations like Shopify.
  • Social Commerce Apps with a Reseller Ecosystem (B2C/C2C): Companies leverage word-of-mouth and curated products within social groups to determine products users enjoy. Resellers can sell products to consumers via channels like WhatsApp and Instagram, setting their own margins.
  • Social Commerce Apps without Intermediaries: Platforms like Pinduoduo connect producers directly with buyers, promoting bulk purchases to reduce costs. This model fosters sustainability, food security, and affordability for consumers while benefiting farmers economically.
  • Rapid Growth: Social commerce is expected to continue growing, with around 80% of businesses projected to incorporate social media-based commerce by 2024. The industry is predicted to be worth $1948.5 billion by 2026.

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Business model considerations for the ecosystem.

Social commerce and shoppable media is shifting key aspects the consumer retail experience into a more social, and eventually unlimited, reality. Our future of social commerce series includes a business model view to help organizations develop their social commerce strategies, integrate new capabilities, and enable inspiring shoppable media experiences.

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Understanding social commerce roles

A social platform’s initial business model decisions around offerings, monetization parameters, and the roles that partnerships can play in forming and maintaining the ecosystem have long-term implications. A critical partnership opportunity for platforms can be enhancing the creator experience and providing new monetization options. These opportunities are critical to accelerating success in the social commerce ecosystem and capturing more moments of inspiration for consumers.

social commerce business model definition

Commerce model archetypes for social platforms

Advertising focus.

An advertising focus relies on creators developing authentic and engaging content with videos, posts, and livestreams that function as the advertisement. By directing viewers to the brand, a creator’s content attracts customer attention and connects them to a brand-owned website to make a purchase. Revenue is generated by increasing conversion effectiveness.

Transaction focus

A transactional focus allows companies to conduct e-commerce transactions directly on the platform while owning the entire purchasing funnel, from awareness to conversion. This helps companies orchestrate an end-to-end experience that maximizes results. Monetization occurs through revenue share on the final purchase.

With a hybrid focus, creators’ content functions like an ad, directing viewers to brand sites for purchase or transacting directly through the platform. Customers are connected to their final point of purchase either on the platform or with the brand. Revenue is generated if the advertisement increases conversion and revenue is shared for a portion of the sale.

Social commerce is here to stay and will only continue to grow, with an expected market size of $2 trillion by 2026 and a projected compound annual growth rate of more than 25 percent. 1  This growth is a product of increasing social media use though mobile devices and the rapid development of technology. Together, these forces are bringing new, engaging digital experiences to consumers.

As the social commerce ecosystem grows, we also see several new types of media channels being leveraged. The popularity of shopping live events was evident in examples like Chinese beauty influencer Li Jiaqi’s Singles’ Day shopping event, which attracted a massive audience. During the live-streamed event, Li was able to net more than 36 million views and more than $145 million in sales. 2

Overall, success in the social commerce ecosystem requires ecosystem players leveraging creators, content, and communities to nudge consumers toward a particular shopping mindset. It also requires using deep consumer insights to spark engagement, impulses, and purchases for a seamless consumer experience. Platforms that consider interplay between stakeholders to create authentic and compelling shoppable media experiences will be the most successful in cultivating value this new marketplace. The enabling capabilities required to launch and maintain offerings in this marketplace are much different than what exists in-house. A smart strategy defines a holistic capability map and then informs choices about what to build, acquire, or partner with.

1  Global Social Commerce Market (2020 to 2026) - by Business Model, Product Type and Region 2  Who is millionaire Li Jiaqi, China’s ‘Lipstick King’ who raised more than US$145 million in sales on Singles’ Day?

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What is social commerce? Stats, trends and tips marketers should know for 2023

Written by by Jacqueline Zote

Published on  June 30, 2023

Reading time  10 minutes

Online shopping has gone social. Imagine scrolling through Instagram, finding something you love. You complete your purchase all within the app and avoid navigating to a product landing page. That’s the exact type of experience social commerce offers. It simplifies the purchase journey by eliminating extra steps and makes consumers more likely to complete their purchases.

As such, social commerce could be the key to success when using social media for retail . In this post, we take a deep dive into what social commerce is and how your brand can make the most of it.

Table of Contents

What is social commerce?

Best social commerce platforms to use in 2023, 5 benefits of social commerce for your business, 6 social commerce statistics marketers should know, 3 social commerce trends for 2023, 4 successful social commerce examples, 5 ways to increase sales on social media using sprout social, starting out with a social commerce strategy.

Social commerce is the buying and selling of goods or services directly within a social media platform. It involves taking social media beyond its traditional role in the discovery process. Instead, users will get to complete the entire purchase journey within the same platform. That means they can quickly go from discovery to purchase without leaving their preferred apps.

Leading social media platforms now offer dedicated social commerce tools to retailers. This includes platforms such as Facebook, Instagram, Pinterest and TikTok. Using these tools, you can create digital storefronts right within the respective platforms. That way, people can use these storefronts to discover and buy products without having to visit another website.

Social commerce vs. ecommerce

Ecommerce broadly encompasses the process of buying and selling goods online. It includes selling through different digital channels including online marketplaces, websites and dedicated retailer apps.

Meanwhile, social commerce involves selling directly through a social media platform. Since social media is an online channel, social commerce is a subset of ecommerce but it’s not the same as ecommerce.

Facebook, Instagram and Pinterest were the first to introduce native social commerce capabilities. Now platforms like YouTube and TikTok have joined in and started rolling out their own social commerce features.

If you’re interested in getting ahead of this potential revenue channel, here are the platforms you’ll want to test out:

Facebook’s social commerce tool,  Facebook Shops , has a very low barrier to entry. Shops are free to set up and are accessible within your Facebook business profile.

Facebook Shop for Madewell showcasing different clothing for women.

If you’re using a  partner platform , you can automatically sync your entire inventory list in seconds. If not, you can use a spreadsheet to upload product information.

The Facebook Shop tab on the platform’s mobile app features products based on user preferences. This helps to encourage organic brand discovery. Once consumers find your products, they can complete a purchase within the app or on your website. Sellers communicate with customers within Messenger to ask questions, offer support and more.

Instagram Shopping  is directly linked to your Facebook Shop. To set up a shop, users must link their Instagram business account to their Facebook business profile. Once that’s completed, users can upload an existing product catalog or create a new one.

Then you can use Instagram Product Tags to make your content shoppable and your products easier to discover. Product Tags allow you to highlight items from your product catalog directly in your videos and posts. Users can tap on a tag and immediately learn more about the product.

Pottery Barn Instagram post with shoppable product tags.

The “View shop” button lets them browse your other listings and enjoy a seamless shopping experience. Like Facebook, purchases take place within the app or on your business website.

Pinterest Shopping has made it easier for retailers to sell on Pinterest . It lets you upload your product catalog to your Pinterest business page. You can then tag products in your Pins so people can click on those tags to learn more about them.

Keep in mind that these Product Pins  are not direct social commerce tools. Buyers will still get redirected to a product-specific landing page to complete their purchase. However, it simplifies the buying journey as people can get the product info right within Pinterest.

Levi's Pinterest Shop with product tags for different items.

It’s easier than ever for retailers to make money on TikTok since the platform introduced social commerce capabilities. Businesses can now set up a TikTok Shop to showcase their products and drive purchases directly within the app. With this feature, you’ll be able to create shoppable videos and even enable viewers to shop directly on your TikTok LIVE broadcasts.

Three side-by-side screenshots showing different options to shop on TikTok - live shopping, shoppable videos, product showcase

1. Reach a wider audience of potential customers

Social media usage is constantly on the rise, with more than 4 billion people using it worldwide. Couple that with the fact that consumers are discovering new brands and products through social media.

According to Sprout Social’s Social Shopping in 2022 study, 40% of consumers were finding the perfect product through a brand’s organic post. Researching products on social media and seeing a friend’s post are other common ways consumer’s discover products.

Graph showcasing the common ways consumers are finding the perfect product

When you leverage social commerce, your products get in front of a massive audience. You’ll reach more people who could turn into customers.

2. Convert customers where they are and remove friction

Social commerce makes it easy to convert customers where they are since they can directly make purchases on the platform. It eliminates the need to switch to a different app or website to find the product they want to buy. As such, it removes friction and barriers to purchase by shortening the buying journey.

3. Increase reviews and recommendations through social proof

If your business is new to selling online, social media is the perfect place to begin establishing much-needed  social proof . When shopping online, your buyers can’t necessarily test or try on your product. Reviews can be the key to making an educated purchase decision.

Managing your end-to-end customer journey on social media creates a positive feedback loop. This will eventually have an impact on your bottom line.

Your social content attracts new followers into your funnel. And offering social commerce gives them a chance to purchase and leave reviews in one centralized location. As your engagement grows with new reviews coming in, it sends a positive signal to  social media algorithms . These algorithms will deem your content relevant to even more potential customers.

4. Gather useful data on your customers’ social habits

Social commerce features give you direct access to your customers’ social profiles. This gives you valuable customer data that you can use to inform your existing strategy.

Combine these insights with social media listening to get an even better understanding of your audience. That way, you get an even more comprehensive look into the habits and interests of your customers.

Screenshot of the Sprout Social Listening tool showing sentiment summary and how you can write posts based on listening trends.

You can create more inspired conversion experiments based on these insights. Findings can inform messaging A/B tests, CTA optimizations and more. So you can make a bigger impact with your target audience.

5. Drive additional revenue than traditional ecommerce

Social commerce is driving an increasing portion of marketing-driven revenue for ecommerce businesses. According to McKinsey , retail social commerce sales in the US amounted to $45.7 billion in revenue in 2022. Experts predict that the number will hit close to $80 billion by 2025.

Although this is just about 5% of the total retail ecommerce sales, it still translates to increased revenue. As social commerce opens up new avenues for your business to drive sales, it gives you the opportunity to grow your revenue.

  • Facebook is the most popular platform for social commerce. An estimated 5 million users in the US made a purchase on the platform in 2022.
  • Instagram comes next with an estimated 41 million buyers making a purchase.
  • TikTok is another popular option with 23.7 million users buying on the platform.
  • Pinterest draws in about 15.9 million social shoppers on the platform.
  • Targeted ads are the number one way for social shoppers to find the perfect product. Forty-nine percent of people surveyed in the Sprout shopping study were discovering products through these ads.
  • Recommendations from friends are the most compelling reasons consumers make a purchase on social.

Graph showing the most impactful reasons consumers purchase on social media.

Many of the current ecommerce trends we see today influence the trends shaping social commerce today.

  • Livestream shopping will drive a significant portion of social media purchases. Sixty-one percent of shoppers in the Sprout study already use this social commerce feature. Moreover, 53% were planning to use more of it.
  • VR and AR experiences will enhance the social shopping experience. Platforms like Pinterest have even introduced a “Try On” feature powered by augmented reality. This allows shoppers to try on makeup products and see how home décor products look in their space.

Pinterest try-on tool highlighting a blue eyeshadow and a Black woman trying out the eyeshadow in the next screen

  • Inclusive marketing will be a key purchase factor in social commerce. Sixty percent of shoppers in Sprout’s social shopping study said that inclusive marketing would make them more likely to buy from a brand.

Check out these four social commerce examples to find inspiration on how to build your own strategy.

1. The Tiny Tassel

The Tiny Tassel is a retailer specializing in handmade jewelry. It uses Facebook Shop features to create informative, Facebook-native product pages. Each listing features detailed product descriptions, customization options and shipping information.

Brands should follow Tiny Tassel’s lead and post listings that communicate value. This builds trust with potential buyers who are new to your brand, motivating them to make that first purchase.

Product listing on Tiny Tassel's Facebook Shop with two pairs of green tassel earrings.

2. Patagonia

Pinterest boards can serve as product navigation tools for your audience. Take  Patagonia’s  Pinterest structure: the Product Pin boards mimic its website navigation. This creates a familiar experience for returning audiences. Similarly, new potential customers will enjoy a consistent experience when they click through to the brand’s main site.

Patagonia Pinterest page showing products organized into different boards.

Most social commerce platforms offer just enough flexibility to recreate your brand experience. Use these tools to create consistency for your audience.

Catalog setup can take a long time If your ecommerce platform doesn’t partner with Facebook. Rather than list all of its products,  Target  focuses on items that align with its Instagram content strategy. This creates a better browsing experience for its established Instagram audience.

If you’re working with a larger inventory, you can use Sprout’s  Instagram Performance Reports . This helps you make smarter listing choices based on content engagement and popular hashtags.

Instagram post from Target with a product tag for a book titled "Living Wild" and a product detail page on the next screen.

4. Made by Mitchell

Makeup brand, Made by Mitchell introduced a product that was exclusively available on TikTok Shop. The brand took advantage of TikTok’s LIVE shopping feature for its initial launch.

The brand had collaborated with TikTok creator, Melissa Jade for this collection. So the two parties had a duel livestream on both their accounts. This attracted 50,000 LIVE views combined and a total of 2.4 million product views. The livestream session even had a 100% sell-out rate.

Brands should follow suit and take full advantage of TikTok’s LIVE shopping feature to engage shoppers in real-time. You can even maximize your reach with influential content creators.

The brand further encouraged sales through mystery beauty bundles. People were buying these mystery bundles on the brand’s TikTok Shop and creating unboxing videos. This helped to build a buzz around the collection and persuaded others to buy their own mystery boxes.

Two side-by-side TikTok screenshots: The left screen showing a mystery box packing process and the right screen showing the TikTok Shop product showcase from Made by Mitchell.

1. Know your audience

Align your social commerce strategy with your  target social audience  for maximum engagement. Choose products and messaging based on this specific customer subset instead of simply repeating what’s on your website.

A screenshot of Sprout's Facebook Pages report that demonstrates impressions, engagements, post link clicks and audience growth for a specific Facebook page.

A social media analytics tool can help you keep up with information as your audience grows. Sprout Profile Reports offer follower demographic data to create platform-wise customer personas. Use these in combination with post performance data to make your initial decisions about which products to list and how to position them.

2. Schedule your content

Once you share a listing, schedule some promotional posts to build interest and drive traffic to your new social storefront. This is a great way to share additional product information, like walkthroughs and close-up shots.

Sprout's built-in social commerce catalogue

Use Sprout’s built-in  social commerce  catalogs to add shoppable tags and links to your products while scheduling your content. By adding products to your posts, you can meet customers where they want to shop and streamline their purchase process.

3. Personalize your replies

Asking questions about a product or service is one of the top reasons consumers reach out to brands on social. They may have requests for specific product details, ask about a specific order or want to know which options are available. Not only can you answer those questions by recommending a product, but you can even share a direct link to buy it. It’s a win-win—you’re delivering helpful service and making it easier for consumers to buy what they’re looking for.

Sprout helps you add direct product links to replies using built-in product catalogs from  Facebook Shops  and  Shopify . You can also answer questions about order status, shipping details and more without switching to another tool.

Sprout Social's engagement workflow for contacts requesting details on a Shopify order.

4. Learn what works (and do more of it)

As you dip your toe into the world of social commerce, the best thing you can do is measure, measure, measure. Knowing what’s working can help you repeat your success as you scale your strategy. It can even help to illuminate new opportunities you might have otherwise missed.

Monitor your social analytics to manage performance. Remember to categorize your posts in Sprout by tagging them, giving you an in-depth look at what’s working and what’s not. Combine this with  UTM parameters and you can dig in, see which posts drove sales and adjust your strategy to optimize your posts. With Sprout, you can schedule report deliveries on a weekly or monthly basis to stay on top of this process.

5. Automate conversations and increase response times

Failing to provide timely responses is one of the biggest social commerce mistakes . Before people finalize their purchases on your social media storefront, they may need some additional info. It’s your job to ensure that those potential customers get the response they need when they need it.

Sprout lets you build chatbots with customized responses so you can automate those conversations. That way, you can provide quick responses even when your support team is unavailable. And customers will get the answers they need to make informed purchase decisions.

Social media has revolutionized the way businesses and consumers interact, and social commerce is its newest frontier. You now know all the basics about social commerce–from what benefits you can enjoy to which platforms you should use. So if you’re ready to get started, download our free interview guide on how to craft a social commerce strategy .

Social Commerce FAQs

Social commerce is the buying and selling of goods or services directly within a social media platform. That means customers can make purchases without ever leaving their preferred social media app.

An example of social commerce is adding product tags to its Instagram posts. People can click on those tags to find out more about the product and make a purchase.

No. Social media marketing involves promoting your brand and products through social media platforms. Meanwhile, social commerce involves making sales directly within social media. So while social commerce may benefit from social media marketing, the two are entirely different.

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Social commerce: The future of how consumers interact with brands

A two-hour live shopping event on TikTok brings in more than a week’s worth of sales at a flagship store. 1 Nikki Gilliland, “Seven examples of brands engaging in social commerce,” Econsultancy, June 1, 2022. An interactive, shoppable Instagram live stream garners 40,000 comments. Augmented-reality (AR) lenses let Snapchat users “try on” makeup and send the images to friends.

About the authors

This article is a collaborative effort by Camilo Becdach, Marc Brodherson , Alex Gersovitz, Daniel Glaser, Zachary Kubetz, Max Magni, and James Nakajima, representing views from McKinsey’s E-commerce Global Initiative, NeXT Commerce.

Welcome to the dynamic world of social commerce, where consumers explore products and complete transactions through social media and content creation platforms, all in an app. This emerging form of shopping removes friction from the buying process, creates a more engaging journey for the consumer, and presents new opportunities for brands to generate consumer interest.

Already enormously popular in markets such as China, social commerce remains a small but rapidly growing segment in the United States (Exhibit 1). In 2021, $37 billion in goods and services were purchased through social-commerce channels. 2 “Social commerce surpasses $30 billion in the US,” Insider Intelligence, July 6, 2021.

By 2025, that figure is expected to swell to nearly $80 billion, or 5 percent of total US e-commerce . 3 Social commerce gross merchandise value (GMV) in the United States from 2022 to 2028, Statista, September 16, 2022. Globally, the social-commerce market is expected to grow to more than $2 trillion by 2025. 4 Value of social-commerce sales worldwide from 2022 to 2026, Statista, September 16, 2022.

Discover NeXT Commerce

Owning the next era of growth requires going beyond traditional e-commerce and online sales. It requires creating a personalized experience that’s tailored yet consistent across all channels—all backed by flexible technology and an operating model that places digitally driven commerce at the center of business. Learn more about driving sustainable and profitable growth through next-generation e-commerce .

Social commerce is more than just a new shopping experience. It represents a paradigm shift in how consumers interact with brands: where, when, and how they shop. For consumer brands, this creates opportunities for a much more interactive, entertaining, and experiential journey (see sidebar, “Discover NeXT Commerce”). For example, leading brands are working with platforms such as TikTok to forge new relationships with consumers, shifting from traditional advertising strategies to fun, engaging content that is less overtly promotional. This content can be used to highlight unique product features or explain product complexities simply. For example, rather than watching an ad for a new skin-care formula, your favorite celebrity can invite you behind the scenes into their daily skin-care routine, showing you how they use the branded product and why they love it. Consumers can then buy the product directly within the platform, whether it’s on Instagram or TikTok or through YouTube Shopping.

The winning ingredients for social commerce in China

The evolution of social commerce in China offers a glimpse of the possibilities. 5 “It’s showtime! How live commerce is transforming the shopping experience ,” McKinsey, July 21, 2021. By forging partnerships with wildly popular social influencers and participating in live-stream shopping—an experience that combines instant purchasing of a featured product and audience participation through chat or reaction buttons—brands in China have achieved conversion rates of almost 30 percent on social platforms. 6 “It’s showtime! How live commerce is transforming the shopping experience ,” McKinsey, July 21, 2021. This is up to ten times higher than conversion in conventional e-commerce. Last year, goods and services purchased through live-stream shopping in China represented $132 billion, or 5 percent of total e-commerce gross merchandise value (GMV). 7 Jasmine Enberg, “How important will livestreaming be for social commerce in 2021?,” Insider Intelligence, July 1, 2021. More broadly, Chinese consumers spent more than double that amount—$352 billion (or 13 percent of total e-commerce)—on all social commerce. 8 “Social commerce surpasses $30 billion in the US,” Insider Intelligence, July 7, 2021.

Innovation continues to drive social commerce in China, with challengers quickly gaining scale in particular categories. For example, TikTok (known as Douyin in China) has emerged as a social-commerce leader, particularly in the apparel category. Last year, Douyin’s apparel sales amounted to more than half of what was sold on e-commerce exemplar Tmall, with most of those sales coming from social commerce, including live auctions, a successful innovation in the China market. 9 iResearch.cn. In this format, which involves both the gamification of product purchasing and a powerful social element with other live users, live-stream hosts often build a rapport with their high-volume customers, chatting with them during the auction. This builds loyalty and a sense of community, which are critical to Chinese consumers, 10 Jessica Rapp, “How to earn brand loyalty from Chinese Gen Z,” Jing Daily , July 23, 2020. and helps bring VIP customers to auctions on a near-daily basis. However, because of the emotional nature of this format, return rates for purchases are higher than for traditional e-commerce. Thus, ensuring that featured products are of high quality and clear value to the customer is critical in this medium.

Another key ingredient in China’s social-commerce success is the power of influencers and community leaders. Chinese “key opinion leaders” (KOLs) have gained massive followings by becoming subject matter experts in their respective categories. In certain sectors, such as beauty and fashion, these highly professional and marketing-savvy social celebrities can sell millions of dollars of products in minutes and make new products trendy overnight. Doudou Babe, for example, reaches more than 13 million followers on Douyin 11 Kate Chernavina, “Top 34 Chinese KOLs and influencers,” HI-COM, August 12, 2021. and has forged brand partnerships with Chanel, Charlotte Tilbury, Lancôme, and YSL. 12 Influencer Marketing , “#KnowyourMIV: The top 10 Chinese influencers for beauty you should know,” blog entry by Paloma Ahlstrand Byrne, Launchmetrics, June 8, 2021.

Beyond celebrities, “key opinion consumers” (KOCs) also have a significant influence on product sales and brand reputations. These microinfluencers drive social commerce through organic, word-of-mouth recommendations to their personal networks. In many cases, they are not paid directly by brands but are given early access to new products or asked to provide input on product design. For example, Perfect Diary, a fast-growing Chinese-based beauty brand, built a network of KOCs through product giveaways and by engaging with thousands of people on product review sites. 13 “The complete guide to KOC marketing in China,” AdChina.io, accessed August 5, 2022.

Both KOLs and KOCs have considerable clout in determining which platforms consumers gravitate toward. When Douyin launched its social-commerce features in 2018, live-streaming KOLs began to move away from commerce-centric platforms, taking many of their fan bases (and their purchasing power) with them to Douyin. Douyin’s social-commerce transactions grew from 10 billion renminbi in 2018 to 800 billion renminbi in 2021. 14 Transaction value of livestream commerce on Chinese short video app Douyin (Tik Tok) in China from 2018 to 2020 with an estimate for 2021, Statista, November 22, 2021.

Some of the factors spurring the rapid rise and popularity of social commerce in China are unique to the country’s particular circumstances. Thus, although China represents a useful market for learnings and inspiration, adoption in other countries is likely to follow a slower trajectory. For instance, China’s economic rise, which coincided with the global internet revolution, helped create a deeply digital consumer base with more than one billion internet users (more than the United States and European Union combined) and a population with one of the highest amounts of e-commerce in the world. 15 “ The future of digital innovation in China: Megatrends shaping one of the world’s fastest evolving digital ecosystem s,” McKinsey, September 30, 2021; Countries with the highest percentage of retail sales taking place online in 2022, Statista, February 21, 2022. Over the years, megaplatforms such as Alibaba and Tencent have used the trust they built among Chinese consumers to create a sprawling digital ecosystem and enable the rapid growth of social commerce (Exhibit 2). 16 “ The future of digital innovation in China ,” September 30, 2021. Creator content, product discovery, community sharing, and digital-payment infrastructures are all integrated into a seamless one-stop-shop digital universe.

How social commerce is growing in the United States

Although the US market is likely to evolve differently than China’s—social commerce, for example, may not achieve the same levels of adoption—the current acceleration of social commerce has some parallels with the Chinese market half a decade ago. Just as the arrival of Alibaba’s Taobao Live in 2016 ushered in a new type of e-commerce, social-commerce adoption in the United States is being driven by social media and content creation platforms (such as Pinterest and TikTok) adding new shopping capabilities. These tech-enabled features allow platforms to process transactions and, in doing so, gain access to first-party customer data and expand their ability to offer value to advertisers. Instead of merely targeting consumers with top-of-the-funnel awareness campaigns, social media platforms can now draw a much more direct line between advertising impressions and verified sales.

Social commerce also represents an entirely new revenue stream for platforms. By collecting a share of each transaction, platforms can increase their average revenue per user.

Over the past few years, US social and creator platforms have rolled out a plethora of social-commerce capabilities:

  • Pinterest. Launched in 2021, Pinterest’s “Shopping List” feature automatically saves users’ shoppable product pins (launched in 2019 and uploaded from verified retailers), shows product reviews, and notifies users when a pinned product has a price reduction.
  • Instagram Live Shopping. Launched in 2020, influencers can live stream on Instagram with the objective of introducing and selling products to fans in real time. This builds on the ability of influencers to add shopping tags to their posts that consumers can use to purchase products. Brands can also create a digital, shareable catalog of their products on Instagram, with customers purchasing directly on the app or clicking through to finish the transaction on the brand’s e-commerce site.
  • TikTok Shopping. Launched last year in partnership with Shopify, these videos and live streams allow Shopify merchants to sync their product catalogs to TikTok and create mini storefronts.
  • YouTube Shopping. In a deal between YouTube and Shopify, companies can sell on YouTube through live streaming, videos, or a storefront.
  • Twitter Shops. Shops allows companies to showcase up to 50 products on their Twitter profile, making the platform a place where people buy products rather than just talk about them.
  • Twitch. Brands can market on Twitch through traditional means (video and display ads) and through partnerships with creators and branded stations and events. Among Twitch’s eight million active users, 84 percent believe showing support for creators is an important part of the Twitch experience, and three-quarters say they appreciate brands that help their favorite streamers achieve success. 17 “Where brands and communities intersect,” Twitch Advertising, accessed August 22, 2022.
  • Amazon Live. Launched in 2019, this live-streaming feature enables brands and creators to stream product demos and other innovative content. According to Amazon, tens of millions of customers viewed its Prime Day 2021 live streams. 18 Amazon staff, “Amazon’s not-so-secret way to score top Prime Day deals,” Amazon, June 28, 2022.
  • Snapchat. Snapchat has introduced AR filters, or “catalog-powered shopping lenses,” to make the purchasing process more experiential.

The growth of social commerce in the United States will not come without growing pains. Meta, which recently tested multiple social-commerce tools—including a native, end-to-end affiliate marketing program—shuttered that program in favor of its Creator Marketplace. 19 Tim Peterson, “Instagram will shut down its affiliate commerce program on Aug. 31,” Digiday , August 5, 2022. Additionally, tests of on-platform checkouts from companies such as YouTube and Pinterest have reportedly seen slow adoption, with Shopify continuing to be a preferred checkout tool. 20 “Trying to get back on topic; Social shopping takes another hit,” AdExchanger, August 8, 2022.

That said, with Americans spending more time on social and creator platforms than ever, consumer demand for these new shopping features is building, especially among younger generations. A 2021 retail survey by Forrester found that 61 percent of online adults younger than 25 in the United States said they had completed a purchase on a social and creator platform network without leaving the website or app, up from 53 percent in 2020. 21 Jessica Liu, The state of US social commerce , Forrester, January 2022. And a 2022 McKinsey survey of US consumers who have previously live shopped found that 75 percent want to attend more live-shopping shows in the future. 22 McKinsey US Live Commerce Survey, August 2022 (n = 482).

A paradigm shift for brands

As a $36 billion market, social commerce is already too big for US brands to ignore. In fact, it has the potential to become their best channel, given the possibilities for new levels of engagement with consumers and the opportunity to hyper-target customer segments. Because consumers are both discovering and buying products in one medium, social commerce merges marketing and retail channels into a single dynamic universe. As a result, brands can work with social and creator platforms to draw a more direct line between their marketing spend and actual sales by customers, enabling advertising that is far more effective and efficient. Certain brand categories, such as fashion and beauty, are already doing this. The specialty skincare brand Glossy recently sold out two product lines in a retail store by partnering with a TikTok influencer who offered a one-day-only discount code. 23 Traackr, “How beauty brands are advancing social commerce strategies in 2022,” Glossy, March 8, 2022.

At the same time, brands also face challenges when wading into this new paradigm. In traditional e-commerce, brands direct consumers toward their own channels where they can develop a direct relationship with customers, collect insights on customer behavior, and capture a higher share of customer spend. Social commerce is changing this purchase journey, creating an experience that, in some cases, circumvents brand-owned channels. For instance, a consumer may discover a brand on Instagram through a post from their favorite influencer, then go to the brand’s Instagram page to follow and browse products, eventually checking out through Instagram’s shopping feature. Following this, the consumer continues to stay within Instagram’s orbit, receiving personalized ads and relevant posts in their feeds that have been selected by Instagram’s algorithm.

As consumers increasingly turn to social and creator platforms for product discovery and buying decisions, the customer journey will continue to shift outside of brand-owned channels, thus threatening the status quo of direct-to-consumer relationships.

How brands can retain control of the customer experience

Brands have an opportunity to help shape the next chapter of e-commerce in the United States. Given how rapidly Chinese consumers migrated from traditional e-commerce to social commerce, brands that fail to accept this new normal or continue pursuing yesterday’s strategies run the risk of missing out on the majority of digital spending over the next three years. To become a social-commerce leader and gain share in the digital marketplace, brands can consider several actions:

By creating compelling content and drawing influencers onto their channel, brands have an opportunity to build enthusiasm, provide an interactive forum for feedback and questions, and develop a new sales channel.
  • Develop a holistic influencer marketing strategy. Influencer marketing has already become an increasingly important activity for brands—and one that will continually require optimization. In addition to thoughtfully selecting the creators to work with based on factors such as the influencer’s interests, demographics, and reach, brands need to find the right mix of macro- and microinfluencers. US brands will want to take a page from their counterparts in China and work with a deeper set of KOLs and KOCs, measuring each of these partnerships regularly and evaluating them according to clear KPIs. Brands will benefit from measuring the impact of their influencer campaigns throughout the advertising funnel, including top-of-funnel metrics such as engagement rates and video views, which can help brands understand how content is performing. Although sales are the ultimate goal, social and creator platforms still offer a healthy dose of awareness building.
  • Watch for platform winners. Because Chinese consumers are used to interacting exclusively on their phones and more willing than US consumers to try new platforms and technology, healthy competition exists among China’s platforms. Take, for instance, Douyin’s leadership in the apparel category. The United States, however, is more likely to be a winner-takes-most market. Top creators will likely gravitate toward platforms with the strongest ecosystem and largest base of users, giving these platforms a key advantage.
  • Move the center of gravity to brand-led accounts. Although much of the activity on social platforms centers on influencers and celebrity creators, brands can draw consumers to their own channels with engaging and innovative short videos and live streaming. By creating compelling content and drawing influencers onto their channel, brands have an opportunity to build enthusiasm, provide an interactive forum for feedback and questions, and develop a new sales channel. Nike is one of the most followed brands on social media and has a staggering 234 million followers, thanks in large part to Nike’s engaging content featuring star athletes. Nike has also built considerable followings on channels specific to certain audiences; the Nike Football account, targeted at soccer fans, has more than 45 million followers. Nike has been a true brand leader, going a step beyond with an ecosystem of its own apps (Nike Shopping, Nike SNKRS, and Nike Training Club), which has contributed to 18 percent of Nike’s annual revenue growth in its digital business. 24 Robert Williams, “Nike attributes digital revenue growth to demand across mobile apps,” Retail Dive , July 5, 2022.
  • Add a brick-and-mortar element. Many brands in China have developed distinct accounts for specific cities, such as one account for its Shanghai store and others for the Beijing and Shenzhen stores. In each account, content is targeted to the profile of local customers and tailored with special offers and events. US brands could borrow this approach to personalize their social-commerce marketing. Imagine, for example, a sports apparel brand that conducts a live sale for sports bras and yoga pants in a city with a disproportionate number of female followers, or a footwear company’s live sale for a limited-edition shoe drop in a city with a disproportionate “sneakerhead” followership.
  • Building for a new customer journey. Social commerce will revolutionize the consumer journey, and brands must adapt their e-commerce offering accordingly. For example, search in e-commerce has historically oriented around text- or picture-based shopping. Social commerce will feature a different approach. In China, platforms such as Douyin and Tmall use short videos for content seeding and live streaming for conversion, and transactions are finished in a platform-based webstore. Actions such as making shopping tag-enabled posts, optimizing strategy for marketplaces such as Meta’s Creator Marketplace, 25 Instagram, August 5, 2022. and developing content and promotions for live-shopping formats are just a start.
  • Anticipate and partner with new creator brands. Mega-influencers and other celebrities are increasingly interested in using their large audience of fans to become entrepreneurs with their own product lines. Rather than compete with these creators, brands can partner with them, setting up spin-offs in which creators take a stake and retain major creative control, while brands bring strengths in areas such as manufacturing and omnichannel distribution. Numerous brands have pursued this route, including fashion company Revolve, which partnered with influencer Aimee Song to launch Song of Style, a clothing and accessories line. 26 Rachel Strugatz, “How Revolve plans to turn a mega-influencer into a fashion mogul,” Business of Fashion , April 30, 2019.
  • Build global capabilities by experimenting in the Chinese market. Brands will need new capabilities to deliver successful social-commerce offerings in the United States. With a large and dynamic social-commerce ecosystem, China offers an ideal test market. Multinational brands have an opportunity to test and scale new capabilities with Chinese consumers. However, brands need to ensure they have the talent and expertise to execute these initiatives in the United States, which thus far has been a major stumbling block for brands trying to import social commerce from China.

Social media and content creation platforms can be the new secret weapon that lets brand marketers deliver significant growth for their products. As social and creator platforms move rapidly to incorporate innovative buying options, consumers will follow with their wallets. Brands that fail to understand this transformation of the customer journey or acknowledge the reduced relevance of their traditional, website-based channel could be devastated by both competitors and smaller brands taking share. To adapt, brands will need a holistic strategy for influencer partnerships and for social-first content. The time for brands to act on social commerce is now.

Camilo Becdach is a partner in McKinsey’s Southern California office, where Zachary Kubetz is a consultant; Marc Brodherson is a senior partner in the New York office, where James Nakajima is a consultant; Alex Gersovitz is a consultant in the Bay Area office; Daniel Glaser is a partner in the Munich office; and Max Magni is a senior partner in the New Jersey office.

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What is Social Commerce and Why Should Your Brand Care?

Social commerce is what happens when savvy marketers take the best of eCommerce and combine it with social media.

This blog post may be titled “What is social commerce?,” but maybe it should actually be called “Do you want to make some money?”

Global eCommerce sales are predicted to grow to $1.6 trillion in the next three years—an increase of over 100% compared to 2020. There’s never been a better time to start selling on social.

Social commerce takes eCommerce businesses and makes them available on social media platforms, widening your brand audience and customer reach.

If you’re a business with products to sell, this info probably makes you feel like that dollar-sign-eyes-green-tongue emoji.

Curious about how you can get a chunk of that change? We’ve got you covered. Read on for social commerce 101.

Bonus: Learn how to sell more products on social media with our free Social Commerce 101 guide . Delight your customers and improve conversion rates.

What is social commerce?

Social commerce is the process of selling products and services directly through social media.

With social commerce , the entire shopping experience from product discovery and research to checkout, takes place right on social media.

A screenshot of The Sage Soap Company's Instagram Shop, showing three products that are available in the shop.

Currently, social apps with built-in native social commerce features are Instagram , Facebook , Pinterest and TikTok

With social commerce, you might see a pair of sweet strawberry-print clogs on your Instagram feed, hit “shop now”, add it to your shopping cart and complete the purchase right there in the app.

Or, you could spot a well-priced crewneck as you’re scrolling through TikTok, and click “Buy.” Once your purchase is complete, you can continue to enjoy your usual TikTok experience by watching duet videos with your favorite artist, without missing a beat.

These are shopping opportunities (shopportunities!) right on the digital platforms that your audience uses most. And you should be taking advantage of them.

Social commerce vs. eCommerce

eCommerce refers to a shopping experience via an eCommerce site, online store, or dedicated branded app. Social commerce , by definition, allows the customer to make their purchase within their social media experience. Social commerce is not eCommerce.

Social commerce is also not social selling. Social selling refers to cultivating relationships on social media in order to build your sales prospect list. Read more about social selling here .

6 reasons why you should try social commerce

Not sure if setting up a social media shop is a good idea? Here are six reasons why social commerce is worth a shot.

1. Social commerce makes shopping a social experience

Shopping on social media makes the experience much more interactive than a typical eCommerce spree.

Consumers can easily consult with their friends on purchases, show off those hip new hightops, comment on Aunt Jackie’s new “I Love My Niece” tee, review comments from other savvy shampoo shoppers, and interact directly with the kombucha brands they love.

For those who miss the social aspect of a day out at the mall, social commerce might just be the next best thing. (Though unfortunately without an Orange Julius pit stop.)

A screenshot of Someday's Instagram stories. A jar of Someday's cream and a heating pad are shown.

2. Social commerce removes friction

See it, click it, buy it. Social media shops remove friction from the consumer journey, making it easy to follow through from discovery to purchase. They’re there. The product’s there. Nowhere to go but the checkout.

Ultimately, every click of the mouse is an opportunity for a potential customer to change their mind. If they have to go from your ad to your website, to add the product to a shopping cart, to fill in their credit card info, that’s a lot of moments to lose their attention.

Take those unnecessary steps away and just bring the shopping right to social.

3. There’s some serious money to be made

Like Shakira’s hips, numbers don’t lie. Researchers are forecasting that e-sales will surpass $735 billion in the next three years .

If you want in on this action, it makes sense to bring your goods to the online spaces where your customers are already hanging out.

81% of shoppers research products on Instagram and Facebook, and shopping is a top priority for 48% of Pinterest users . Why not give ‘em what they’re looking for?

A screenshot of the Lucky Shrub Facebook Shop. There are three plants available to buy with pricing and links.

4. Social commerce offers an instant focus group

Not only does social commerce speed up the transaction process, but it also offers an incredible way to collect feedback.

Your catalog of goods is out there in the world for consumers to review and discuss together. No crystal ball is required: your customers can just tell you what they like or don’t like.

Why not get your audience to vote and weigh in on product development and inventory decisions while they’re there? (How are we feeling about my glow-in-the-dark wolf backpack design? Anyone? Hello?)

On social, you have clear data about exactly who your customers are, and the opportunity to chat with them after via comments or direct message, to provide personalized customer service.

5. Social media is where Millennials and Gen Z like to shop

If your target demographic lies in the 18-to-34 age range, they’re already online and waiting to shop while they scroll.

48% of U.S. internet users of this age made a purchase on social media in 2019. For those in that demographic who haven’t shopped on social media yet, 27% have expressed interest in giving it a go.

This is the modern mall. Time to open up shop!

6. You can sell to highly targeted audiences

With an incredible wealth of customer data available on social, you’ve got a prime opportunity to tweak and target your advertising.

Your horse-print bathrobes can be directly advertised to the flannel-loving equestrians out there. Adorable baby-sized sunglasses can be beamed right to the feeds of cool young dads.

Social commerce offers the chance to get specific, ready-to-buy products in front of specific people who would love them, in a way that traditional eCommerce and marketing cannot.

A screen show of Instagram Shop user targeting.

What are the best platforms for social commerce?

There are currently five social platforms that offer social commerce capabilities. But as the interest (and revenue) grows, it’s likely we’ll see more of these social media brands integrating “shop now” options.

Here are the current social commerce platforms available.

You use your Facebook Business Page to share news, connect with fans, and show off your cute new logo. Why not use it to sell a few things and boost sales while you’re there? Set up a Facebook Shop and you can do just that.

Facebook Shops are customizable. Choose which collections or goods to feature, and customize the fonts, images, and colors to suit your brand. Import an existing catalog of products from your website, or create one from scratch.

A screenshot of the backend of Facebook Shops customizable collections.

Your Facebook Shop will be accessible from your Facebook Page, your Instagram profile, your Instagram Shopping ads, or shoppable stories and post.

When it’s conversion time, you’ve got the option for your customers to do an in-app checkout, or open up a direct Messenger chat with your business. You can also send them to your website.

A screenshot of Facebook Shops in-app checkout. A woman is wearing a dress that is available for purchase.

Once you start selling your products on Facebook, you’ll likely see an influx of messages from your customers with questions about product details, shipping, and sizes. To save some time and make sure you never leave a question unanswered, use an AI-powered customer service chatbot like Heyday .

The Heyday chatbot can answer simple, repetitive questions for you right in Facebook Messenger DMs and flag the inquiries that require a more personal touch. Customer service has never been easier.

An example of the Heyday chatbot in action in direct message.

Another nice feature of Facebook Shops: you can create a test shop to learn more. Here, you can add items, manage orders, and even test out the customer experience.

Learn how to set up your own Facebook Shops with our step-by-step guide .

60% of people discover new products on Instagram. Your products should be among them.

Instagram Shops allows users to buy products featured in your photos and videos from anywhere in the app.

Outdoor Voices Instagram Shop.

Business profiles can create a customizable storefront page that acts as a curated collection of products for sale. Each product in your Instagram Shop catalog will get its own detail page, featuring pricing, media, and a detailed description.

There are multiple ways you can sell products on Instagram. Shopping Tags allow businesses to tag their products in their Stories or posts. U.S. brands also have the option to highlight products in post captions and bios.

You can also sell through the dedicated Shop tab , where people can browse, save, and buy products listed by businesses or tagged by creators.

Or, you could create an Ad with a Shop tab placement within it. The Ad will appear with a “Sponsored” label and function as any other post or product listing in user feeds.

Meta also recently introduced a feature that makes it possible to shop through DMs . The capabilities are always improving and the demand is there.

Instagram Business profiles customizable storefront page

Note: To get your Instagram Shop set up, you just need to live in an eligible region and have an Instagram Business account that’s connected to a Facebook page and Facebook Shop.

Pinterest was one of the first social media platforms to offer shopping capabilities for users way back in 2015.

But there’s some news you should pin right now: Pinterest does not strictly offer social commerce.

Yes, for business accounts, Pinterest does offer the option to create “Product Pins” (formerly Buyable Pins), which are displayed in your brand’s Pinterest Shop . If a customer lives in the US and sees a Buy button below a Pin , they can complete their purchase through a checkout experience without ever having to leave Pinterest.

A screenshot of a Pinterest Store, Chunks. It shows the store name, bio and available products.

But outside of the US, it’s important to note that these are not available to purchase within the app. Clicking on a beautiful vase, you’ll be sent off of Pinterest to an eCommerce site to complete the sale.

Is Pinterest still a helpful tool for getting your goods out into the world? Absolutely — especially given that 89% of Pinterest users are there for shopping inspiration.

For more on making the most of your Pinterest account, here are eight business strategies to try.

In July 2020, Snapchat announced a closed beta launch of Brand Profiles . One of the profiles’ features? A “Native Store” experience (powered by Shopify) that enables users to browse and purchase right from the app.

They debuted the feature with the help of five official approved influencer accounts — Kylie Jenner, Kim Kardashian, Shay Mitchell, Spencer Pratt, and Bhad Bhabie.

A hand holding a phone that shows what the Snapchat Native Store exclusive shopping experience is like.

A few other brands have been approved in the meantime, and it’s likely that this feature will expand to the rest of the non-Kardashian world eventually.

In the meantime, keep an eye on Kylie Cosmetics to see how she’s making the most of the app’s “swipe up to shop” capabilities.

Or brush up on your snap cred with the help of our Snapchat for Business strategy guide .

Setting up a digital storefront on TikTok as a retailer or creator is a must if you want to stay relevant with today’s buyers. TikTok Shop is the new shopping feature that allows merchants, brands, and creators to showcase and sell products directly on TikTok.

There are three ways to sell products on TikTok Shop:

  • in-feed videos
  • product showcase tab

The TikTok shopping experience is real. #TikTokMadeMeBuyIt, where users post what they’ve bought thanks to recommendations about products on the site, has been used 7bn times .

A screen shot of what a live TikTok video with in video shopping looks like. A woman is holding up a shirt to show her viewers.

Note: In recent changes , TikTok pulled back plans to expand TikTok Shop capabilities from the North American market, but it’s currently still available in the UK and Asia.

7 tips and tools for effective social commerce

Your shop is set up. You’re motivated and ready to sell. Here are key tips and tools that will help you make the most of this brave new digital shop-o-sphere.

1. Streamline sales and customer service with an AI chatbot

A swift and professional answer to a customer’s question can make the difference between a sales and an abandoned shopping cart. With the right tools, you can automate your customer service and make sure that your customers are taken care of 24/7/365 (a.k.a. even when your team is not online).

Use a tool like Heyday to engage with your customers on their preferred channels and convert customer service conversations into sales.

Heyday is an AI chatbot for retailers that integrates your online store with your social media channels. It allows you to automate as much as 80% of your customer support conversations. When customers reach out to you on social media with questions regarding your inventory or order tracking, the chatbot assists them in real time (and passes more complex inquiries over to your support team).

A screen shot of a conversation in direct message between a customer and a conversational AI chatbot for Fody Food Co.

Get a free Heyday demo

Heyday can also help you boost sales by automatically sending out back-in-stock and price-drop notifications to customers who had previously expressed interest in a product.

2. Engage with your followers

To create a great social commerce experience, you’ve got to remember the “social” part.

You can’t just toss up your catalog and forget it. Answer questions, offer value and interesting content, be human and authentic, and so on. Set up a chatbot to help people move forward with their shopping journey through customer service.

The same best practices that you usually use for engaging your following all apply here.

A screenshot of an Instagram story where Sunday General Store is engaging with their customers. They have suggested four products for an upcoming holiday and linked to them for easy purchase.

3. Listen strategically

You’ve got a front-row seat to your audience. Make the most of it.

Keep a close eye on comments and shares on your Shop, and respond or offer customer service when necessary.

Setting up social monitoring across all platforms can be a great way to catch feedback or industry news outside of your own bubble, too.

Check out our guide to social listening here.

4. Encourage reviews

93% of online shoppers say a review can make or break their decision. If you’ve got a product people are happy with, get them to help spread the word.

Whether it’s an automated follow-up email asking for a review after a product has been delivered, or incentives like a contest to encourage previous customers to weigh in and share their experience, collecting social proof is vital to building a positive reputation online.

Once you’ve got some positive reviews, share them on your social feeds in creative ways, whether that’s posting user-generated content, hosting a Live video with happy customers, or simply creating a carousel of positive comments. There are tons of ways to do this that won’t make you sound like you’re bragging.

5. Target your reach

Take advantage of the incredible data available to you on social to get your products or Shop in front of the right people.

Not sure who your audience is, exactly? Here’s how to find and target your dream customer .

6. Price your products to move

Social commerce offers a great opportunity for lots of different kinds of products — clothing, dog toys, risqué pottery — but luxury products typically aren’t successful here.

Because of the risk associated with buying something unseen, consumers are less likely to splurge on something with a larger price point.

A screen shot of Easy Tiger Good's Instagram Shop. There are six products available on screen.

Shopify’s data show that an under $70 price tag is ideal: right in that “why the heck not” sweet spot for many social users.

7. Include products from your Shopify store in your social media posts with Hootsuite

Though not strictly falling under the definition of “social commerce”, Hootsuite users are able to easily post products from their eCommerce sites like Shopify, Magento, Woocommerce, and Bigcommerce, to their social networks via the Shopview app . It’s an easy way to use social media to enhance your customers’ online shopping experience.

A screenshot of the product Shopview Apps for Hootsuite.

Of course, social commerce is likely just one piece of your overall digital marketing puzzle.

To craft a robust strategy that engages, sells, and intrigues all across the wide plains of the internet, dive into our Social Media Advertising 101 guide . Build up your brand across all your platforms for your best chance at success, online or offline.

Social commerce FAQ

Social commerce is the use of social media platforms to promote and sell products and services. It encourages and allows users to buy products directly within social media platforms, never having to open another browser.

How does social commerce work?

Social commerce capitalizes on the sheer amount of people using social media platforms around the world. For example, 59% of U.S. adults use Instagram daily and 38% of those daily visitors are logging on multiple times per day.

That’s a huge potential audience for brands to advertise to, far surpassing any reach from television, radio, and print advertising.

Social media users can discover and explore brands, products, and services, add products to their shopping lists or carts, and complete checkout — all without leaving the social network.

Social commerce can involve the use of native shopping solutions (e.g. Facebook and Instagram Shops) or eCommerce integrations (e.g. browsing a product catalog and adding items to a cart on a social platform, then completing checkout in an online store).

What are the types of social commerce?

  • Native social media shopping solutions (e.g. Facebook and Instagram Shops)
  • Marketplace sales, a.k.a. peer-to-peer sales (e.g. Facebook marketplace, Craigslist, eBay)
  • Curated shopping lists (e.g. Shopping Lists on Pinterest)
  • Live shopping events (e.g. on Facebook Live)
  • Shoppable AR filters (e.g. shoppable Lenses on Snapchat)

Why is social commerce important?

Social commerce allows brands to make sales directly on social media. It’s an effective sales strategy because it removes friction from online shopping experiences that start on social platforms. Many people discover products they like while browsing social media. Allowing them to click through to checkout without leaving the social network makes for a quick and streamlined experience, and reduces the risk of abandoned shopping carts.

What are some social commerce examples?

Examples of social commerce include:

  • Domino’s Pizza taking orders via an automated Facebook Messenger flow
  • Mac Cosmetics’ shoppable AR Lense on Snapchat
  • Gap using Instagram Guides for curated shopping lists
  • Nike using Product Pins on Pinterest
  • Best Buy Canada’s Shop tab on Facebook

Engage with shoppers on Instagram and turn customer conversations into sales with Heyday, our dedicated conversational AI tools for social commerce retailers. Deliver 5-star customer experiences — at scale.

Turn customer service conversations into sales with Heyday . Improve response times and sell more products. See it in action.

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social commerce business model definition

Social Commerce Is Replacing the Shopping Mall

social commerce business model definition

We used to shop at the mall with friends. These days, we do it on the ’ gram.

Earlier this summer, Instagram rolled out a dedicated Shop page under its Explore tab, making it easier for users to purchase items they see in their feeds from inside the app.

Similar developments are taking place on other social media platforms too. Businesses can now create Facebook Shops , Buyable Pins on Pinterest, or even shoppable shows on Snapchat .

Our social feeds are no longer just sources of information or inspiration — they are marketplaces that facilitate transactions. And retailers want in.

When you couple this trend with the endangerment of brick-and-mortar retail — which the spread of coronavirus may accelerate — you’ll have an idea why experts are calling social commerce the future of shopping .

What Is Social Commerce?

Social commerce is a somewhat nebulous term. Depending on whom you talk to — or what geographic market you’re in — definitions and examples may vary.

In North America, for instance, social commerce is often associated with brands using platform-specific marketing strategies to sell products through social media channels; in Asia, however, where social commerce is more advanced and diversified, it includes practices such as online group shopping and shoppable user-generated livestreams.

Ana Andjelic, a strategy executive who specializes in brand strategy and retail innovation, told Built In she prefers this widely embraced definition: Social commerce is “anything that combines content, community and commerce.”

insta fb social commerce

Social Commerce Leverages Inspiration for Transactions

The average person clocks two and a half hours on social media every day, and more than a third of U.S. internet users say that social media networks are important sources for making a decision about what products to buy.

People scroll through their feeds to get inspired — about what outfits to wear, or what decor to adorn their homes with.

Social media companies don’t want it to end there.

“It’s a natural extension,” Andjelic said. “It’s merging inspiration and transaction.”

social commerce business model definition

What’s in it for them? Increased engagement on their platforms, for starters — plus a cut of all sales that occur on their apps.

“We’re seeing platforms like Instagram and Facebook jumping on social commerce, because that’s another revenue stream for them,” Andjelic told Built In. “When they find themselves squeezed by ad regulation, and publishers and brands boycotting, commerce is a way for them to still have the audience and still have another revenue stream.”

It also provides a chance for social platforms to run even more ads.

“Instagram and Facebook are jumping on social commerce. It’s another revenue stream for them.”

Retail brands, too, are enticed by the idea of selling their products directly through social media channels. Their thinking is that letting users stay on platform will reduce friction, leading to higher conversion rates and fewer abandoned shopping carts.

In Andjelic’s estimation, the consumer is the biggest winner of the rise of social commerce.

“They have a convenience and seamlessness of shopping where they are,” she said. “They don’t have to have different touchpoints for content, community and commerce. Everything is one seamless flow. That is where the opportunity is — to explore and discover new things, and connect with others through those things.”

Here are some of North America’s biggest players in social commerce:

For years, merchants have advertised their products on Instagram; it’s where their (young) target markets dwell. Maybe they buy ads, or leverage influencers, or showcase products through their own accounts. But in the past, if someone wanted to buy from them, the user would have to click over to their e-commerce site and complete the transaction there.

Instagram eventually allowed business profiles to tag posts that had products available for purchase. Last year, the company took it a step further, releasing a checkout feature on its mobile app. That way, users didn’t have to click off-platform to shop. (Even Target got into it .)

This summer, Instagram introduced Instagram Shop , an in-app destination for product discovery, where users browse personalized recommendations and featured brands. They can even use Facebook Pay to make a speedy purchase.

Read Instagram AI Tools Are Frowned Upon — but They Work

In the spring of 2020, Facebook rolled out Facebook Shop . The product allows businesses to create digital storefronts on the Facebook platform, and sell their inventories directly to Facebook users.

In a Facebook Live stream accompanying the launch, CEO Mark Zuckerberg said that Facebook Shop was a way for small businesses to weather the pandemic, which had shuttered physical retail stores just about everywhere.

“I do think we’re going to continue living more of our lives online and doing more business online,” he said.

It’s not the social media giant’s first foray into commerce: It launched Facebook Marketplace, a Craigslist and eBay competitor, in 2016.

People use Pinterest to find inspiration for what to buy. They “pin” images, usually of clothes or home furnishings, to return to later, often as a way to curate a list of potential future purchases. The company’s internal research showed that “93 percent of people say they use Pinterest to plan for purchases.”

To leverage this, Pinterest launched Buyable Pins in 2015. The feature allows users to click directly on pinned items and add them to their shopping bags, so they can complete the purchase on Pinterest rather than having to click through to the merchant’s website.

Pinterest’s Buyable Pins makes it easier for users to buy stuff they pin, which, theoretically, makes it easier for merchants to sell stuff. Pinterest’s case studies show that various businesses have seen sales increases as a result of using Buyable Pins.

Snapchat is investing in social commerce too. For example, the visual chat app allows users to virtually “try on” clothes and make-up through augmented reality; this helps shoppers clear the hurdle of not knowing how the item will look on them . The company is also soon rolling out original programming that “features commerce as part of the narrative” and will include additional content with a “swipe up to buy” call to action, Variety reported .

TikTok is experimenting with social commerce as well. In December of 2019, the social app began allowing users to feature links to e-commerce sites in their profiles. And in May of 2020, TikTok partnered with Levi’s to test its Shop Now button (clicking it took users directly to Levi’s website).

There are also social commerce pioneers in North America that aren’t social media companies — like Glossier , a skincare and beauty brand, Food52 , a recipe and cookware brand, and Supergreat , a recent, fast-rising entrant in the skincare and beauty space. Each of these businesses seamlessly blend together the shopping experience, community interaction and (often user-generated) content. These elements work in tandem to keep users engaged on the platform, giving them an easy way to purchase when inspiration moves them.

Read 11 Things Marketers Need to Know About TikTok

wechat social commerce

Social Commerce in Asia is Light Years Ahead of the U.S.

If social commerce is an emerging practice in North America, it’s a fully developed industry in Asia, and specifically in China.

There, consumers tend to be more digitally connected and are used to seeing media content integrated with mobile shopping.

E-commerce platforms in the United States are typically treated as utilities, according to Jessica Li, an investor at Soma Capital. They are tools people use to find an item they intend to purchase. In other words, you go on Amazon to buy a replacement for a broken garden hose, not to hang out with friends.

In China, though, “people visit social and commerce platforms to be entertained and to learn, rather than to purchase a specific item,” Li wrote .

Pinduoduo serves as a helpful illustration of this phenomenon.

pinduoduo social commerce

The Rise of Pinduoduo

Pinduoduo is a Chinese e-commerce platform that was founded in 2015 and is now valued at over $100 billion. It revolves around a group shopping experience.

For example, a merchant on Pinduoduo can set the price of a single item at $20. But the merchant can also decide that, if a group of five people join together and each purchase one, the item’s price drops to $15.

This group discount encourages app users to message family and friends (usually through WeChat, which Pinduoduo integrates with) and convince them to join in for the deal. That way, each one can enjoy a discount that wouldn’t be available to them individually. It’s an inherently viral experience, with built-in network effects .

“All of this brings a real social dimension to the act of buying,” Marie Dollé, a digital marketing strategist, wrote . “There is less intervention of the computer and the emphasis is on people, friends, and community.”

Groupon is probably the closest North American comparison to Pinduoduo. The company got its start offering discounted group purchases for one-off luxury products, like a trip to a spa or an arcade. However, Pinduoduo is more known for team purchases of everyday consumer goods , like paper towels and vegetables.

Pinduoduo is highly interactive, spontaneous and social. It successfully imitates the feeling of rounding up a group of friends to go shopping at the mall. (It even includes an in-app game — in which the player tends a virtual mango tree — to keep users engaged.)

There’s little doubt that other companies will try to replicate its business model.

Livestream Shopping

Fans of QVC shopping broadcasts can take heart that livestream commerce is the next big wave. At least in China.

According to Calanthia Mei, a fintech operator and investor, livestream commerce is the “fastest-growing segment of China’s broader social commerce boom,” with a gross merchandise value projected to reach $90 billion this year, she wrote .

Remi Blanchard, who works for a market research firm in China, told Vogue Business that video livestream lets “Chinese shoppers feel reassured by the in-depth product introduction and testing that [key opinion leaders] provide them in a live and ‘no filter’ environment.”

What makes livestream commerce so sticky in China, Mei wrote, is that “the entire shopping experience is natively embedded in the livestream content.” There’s no platform hopping, no need to turn from your television to your web browser to make the purchase. And shoppers can send in questions and see them get answered in real time, much like Instagram Live, Facebook Live and Periscope.

In a post-pandemic reality, livestream commerce might be a sign of things to come — a future where, Mei wrote, we “stream, shop and socialize all in real time, in a compulsively watchable livestream, on mobile phones.”

livestream social commerce

Peer-to-Peer Chat

Beyond Asia, some startups are innovating new e-commerce features, such as peer-to-peer chat.

Anyone who’s shopped online is probably familiar with the chat window residing on the corner of the website, with either a robot or a customer service representative typing on the other end. The bot or rep may be able to answer a frequently asked question — but you probably wouldn’t trust their opinion on the items you’re thinking about purchasing. They wouldn’t be as candid as a friend would be.

TokyWoky , a French startup, helps brands cultivate online communities with their superfans and turn them into brand advocates. One way they do this is by encouraging the advocates to answer questions that shoppers ask on the brand’s e-commerce site. (They also let these customers test new products, share feedback and meet other fans.) That way, the shopper and someone who’s passionate about the brand, rather than someone trying to close a sale, can have a conversation about the product. Howtank , also in France, does something similar, leveraging volunteer brand ambassadors who are happy to jump into real-time chats with shoppers.

If talking to a brand advocate doesn’t feel authentic enough for shoppers, they can take solace in the recent launch of eNvite . This startup, based in Israel, builds e-commerce chat widgets that allow for shoppers to share a link that will pull the recipient directly into the chat. There, the shopper can show a friend the products they are looking at buying, and ask for their real-time feedback.

How Your Business Can Leverage Social Commerce

With its vast inventory, two-day shipping, and one-click purchase feature, Amazon has disrupted commerce forever and solidified itself as the reigning industry giant.

Some say that if anyone’s ever going to rival Amazon, it’s going to be a social commerce platform.

“The next Amazon competitor is likely going to look like a social or video app, not a shopping app,” Connie Chan, a general partner at Andreesen Horowitz, a venture capital firm, said on Twitter .

Where should companies start? Here are two ideas.

1. Make Your Commerce Mimic Offline Shopping

That means cultivating spontaneous and social experiences — and keeping people engaged and on-platform, even when they have no concrete plans of making a purchase.

Li Jin, a former investor who now publishes a newsletter on the passion economy, writes that e-commerce needs to evolve beyond two-dimensional experiences filled with product filters and search bars. “There are opportunities to create new experiences that promote the sense of serendipity and fun of shopping in the real world.”

2. Empower Key Customers

China has a more advanced influencer economy than the U.S., and many influencers there weren’t celebrities first, so customers find them more authentic, relatable and easier to trust. This influencer infrastructure is integral to China’s booming social commerce industry.

Companies looking for similar success may want to leverage brand advocates who are fans first, celebrities second.

Quentin Lebeau, chief executive officer at TokyWoky, offers a similar suggestion. He told Built In that many brands and retailers “still live with the illusion that they actually do have control over their image, when reality is, your customers control your image.”

“Your customers control your image.”

His solution is to employ a customer-centered logic, which entails being generous with and investing in your key customers. Work with them in community chats, let them create content (like “outfit of the day” photos) to publish on your product pages.

The brands who are afraid to do this, Lebeau said, are too focused on marketing tactics for which they can track ROI. In his view, they should shift more control over to their brand ambassadors, and let them be a part of what drives conversations about the brand, even if it’s too difficult to track.

“At some point,” he said, “you have to take that leap of faith, [believing] that, if I’m super generous, and take care of my key customers, I will win long term.”

Read Next How Software Is Alerting Us to Fake Amazon Reviews

Great Companies Need Great People. That's Where We Come In.

  • Feb 18, 2022

What is social commerce? The trends and platforms to know

social commerce

Most people spend an average of two hours and forty-two minutes on social media each day —and many aren’t on it to simply catch up with old friends, share awkward family moments, or upload cat videos. They’re there to shop.

According to a survey by The Influencer Marketing Factory , 82 percent of respondents said they’ve discovered a product on social media and purchased it directly from their phones. What’s more, 97 percent of Gen Z consumers use social media as their top source of shopping inspiration.

With an estimated worldwide social commerce market of around $475 billion, it’s no wonder why merchants worldwide are optimizing their social commerce capabilities. And while China leads the way in social commerce, the U.S. is catching up fast. eMarketer predicts that the U.S. social commerce market will hit $45.74 billion in 2022 , a projected increase of nearly 25 percent from last year.

So, what is social commerce, anyway, and how can you catch onto this surging trend as an online store owner? This guide will offer you a social commerce definition and loads of helpful hints to give you a jump start. You’ll learn:

What social commerce is

The difference between eCommerce and social commerce

Benefits of social commerce, emerging social commerce trends, top social commerce platforms.

3 brands that are killing it with social commerce

Tips to build a successful social commerce strategy

What is social commerce?

Let’s start with what social commerce is not.

It’s not about promoting your products on social media and driving potential buyers to your site.

Rather, modern-day social commerce entails bringing the entire shopper journey onto social media. In other words, with a social commerce strategy, you strive to bring your products—or your entire catalog—to your shoppers within their social-channel-of-choice.

Let’s look at a typical social commerce buying experience:

A shopper logs into his or her favorite social media app

While still in the app, the shopper discovers your product and learns about its features through posts, stories, videos, and other interactive elements

The shopper then buys the product without every leaving the app

While you can use clicks, shares, and likes to measure your reach, true social commerce is measured by looking at both engagement metrics and revenue. The more successful you are at selling products in-app, the higher your potential profit.

eCommerce and social commerce are related, but different. While eCommerce covers any transaction completed online—social commerce only includes those purchases made within a social network’s platform.

Social commerce gives you the chance to integrate your products into the type of content that social media users crave, such as videos that show your shoppers using your product, or polls that allow consumers to vote for different product styles or options. And nearly every eCommerce merchant is getting into the social commerce game. According to a Harris Poll conducted on behalf of Sprout Social , 73 percent of businesses already participate in social commerce, and 79 percent expect to do so in the next three years.

Want more insight into social commerce usage for small, mid-size, and enterprise merchants? Read our Q&A with Sprout Social CEO Ryan Barretto .

Find the right customers

Each social media channel is its own community, giving you plenty of new markets to tap into. Does your product appeal to people of all ages? Facebook, which has pretty consistent reach across all ages , may be the right channel for you. Aiming for customers ages 25-34? That age group represents 33 percent of users on Instagram . T ikTok is a smart channel to promote products geared toward younger people, with nearly half (48 percent) of its users younger than age 30 .

Get more competitive vs. the big brands

Traditional media requires big budgets, giving larger enterprises the leg up. But social media levels the playing field, helping merchants of all sizes get the message out about their products at a far lower cost. In social, budget doesn’t win the day. Content does. Consider using one or several of these new tools found on social media platforms to help you get ahead of your competitors.

Create simpler buying experiences

Today’s buyers expect frictionless experiences. That means they want to make as few clicks, taps, or swipes as possible when buying their favorite products. Social commerce delivers this kind of simplified and convenient customer experience, removing redundant steps and reaching buyers in a place they already frequent.

Boost your mobile strategy

In 2020, nearly 45 percent of all eCommerce purchases in the U.S. were made on a mobile device. But mobile devices traditionally have higher cart abandonment rates . Social commerce can help you close this gap for two reasons: social media users are already on their mobile devices (nearly eight in every ten social media users access their favorite platforms exclusively on mobile ) and in-app shopping creates a simplified path-to-purchase.

Generate social proof

Consumers typically aren’t shy to boast (or complain) about products online. As you use social media to promote your products, you can invite honest feedback to share with your product development team and/or to showcase on your site as social proof. This type of user-generated content is a natural extension of social commerce.

User’s favorite social channels help them embrace the future now. If you want your products to lead the social media conversation over the next few months, consider developing a future-forward strategy using one of these two hot social commerce trends:

Live stream commerce

From try-on hauls to makeup tutorials, influencers have historically led the social media conversation and been the driving force behind buzzworthy products. Today, many influencers and brands are doing this with livestreams on social media platforms. Hosts go live on an app and showcase their favorite products, while potential customers react, comment, and ask questions in real time. Customers can also buy or save products featured during livestreams. Live stream shopping started in China but is making fast inroads in the U.S., so much so that Facebook launched Live Shopping Fridays in 2021, featuring well-known brands like Bobbi Brown Cosmetics and Sephora.

Augmented reality (AR)

“How will that couch fit in my living room?” In the past, shoppers could only know the answer by getting out a tape measure. Nowadays, they can use their phones to virtually “set” an item inside their house and better envision how it would look in real life. From Snapchat to TikTok filters, AR is taking the world by storm. Both Snapchat and Pinterest have launched AR-fueled virtual try-on tools over the past year, giving merchants new ways to up their social commerce game.

Facebook ranks as the top U.S. social platform. Nearly 74 percent of shoppers use Facebook to discover brands and products, compared to 41 percent who discover them on a brand’s website. It’s easy to get started with Facebook. They let you create online stores, called Facebook Shops, entirely for free. All you need is a Facebook business profile.

A Facebook Shop allows you to feature your products on the platform’s mobile app so customers can buy them via the Facebook app or your website. Facebook also allows businesses to create collections within their shops and to run targeted ads for people who are interested in their products. And they allow brands and influencers to tag products within news feed posts.

If you use Wix, you can also connect your Facebook Shop directly to your account , enabling your team to manage all of your multichannel selling activities and products from one place.

Instagram ranks as the second-most popular social commerce platform in the U.S. with 32.4 million buyers . Because Facebook (Meta) owns Instagram, you can easily link your Instagram Shopping profile directly to your Facebook Shop.

Instagram also offers several unique social commerce features, including:

Instagram checkout, which allows for in-app purchases (see our guide on how to sell on Instagram )

Shoppable ads, stories, videos, and reels, which showcase products and invite users to make a purchase

Instagram drops , which allow you to draw attention to new products or limited-time offerings

Today, 89 percent of Pinterest users are actively searching for purchase inspiration, making Pinterest a valuable social commerce platform for those who sell apparel, interior design-related items, or health-and-fitness products. Product pins allow shoppers to save their favorite items, and Pinterest Shopping List lets them put those pins in one place for easy access. Pinterest additionally includes AR tools and personalized product recommendations. Discover more benefits of Pinterest for Business .

The biggest up-and-comer in social commerce, TikTok , is creating plenty of buzz. Videos with the hashtag #TikTokMadeMeBuyIt have earned more than 4.6 billion views , and brands like Halara have been put on the map by TikTok trends. In the case of Halara: though less than a year old, this DTC brand receives nine thousand monthly visitors thanks to its TikTok-first strategy . TikTok offers users in-app purchases, live shopping, and a variety of shoppable ad types, including Hashtag Challenge Plus Ads that let you create a hashtag to promote a trending product. These are all lucrative ways to make money on TikTok .

If you’re selling to people from a younger generation, Snapchat is a wise choice. An estimated 73 percent of Snapchat users are between the ages 18 and 24. Snapchat allows businesses to tag products in a sponsored post, run shoppable ads, and showcase product catalogs. They’re heavily investing in AR , using their in-app feature called Lenses to help users perform virtual try-ons.

3 brands that are killing it with social commerce (with examples)

Get inspired by these three brands that are killing it with social commerce and driving great business outcomes as a result.

A Spanish women’s apparel brand, Wix merchant CeliaB uses social commerce to unveil their latest collections of fun, passionate, and timeless clothing. Their colorful designs light up their Instagram and Pinterest feeds. Meanwhile, their Facebook Shop lets shoppers browse, view, and buy dresses, tops, leggings, and accessories with just a few taps. CeliaB integrates its Facebook Shop with its Wix storefront using our native Facebook Shop integration functionality .

02. Ivory Paper Company

What’s compelling about planners, stationary and goal organizers? Plenty if you’re shopping on social media with Ivory Paper Company , a Wix user.

In addition to having Instagram and Facebook shops, the company infuses personality into its social feeds, talking to consumer pain points and also giving users an inside look at the inner workings of the company through entertaining and enthusiastic posts, reels, and videos .

You know those fun cat videos that make headlines on social media—Wix user PETKIT has found a way to turn them into a social commerce powerhouse. A seller of smart pet supplies, PETKIT sells on Facebook, Instagram, and TikTok, where their delightful videos bring smiles and attract followers even before they’re introduced to one of PETKIT’s products.

Tips for building a successful social commerce strategy

Whether you’re running your own online store or selling products through a third-party retailer like Amazon , you can use social commerce to increase your revenue and extend your brand. A few tips to build a successful social commerce strategy:

Read Also: How to start a business

Choose the right platforms

You don’t need to be (and likely shouldn’t be) on every social media platform. Rather than taking a spray-and-pray approach, look at the demographics of each channel and prioritize the channels that attract your target shopper.

Choose the right products

Consider whether your products are the right fit for social commerce. If you sell apparel, accessories, electronics, home decor, cosmetics, or impulse buys that are often purchased on the spot, social commerce will likely pay big dividends. If you sell products that require a longer path-to-purchase, social commerce may not help you make direct sales, but it still plays a role in keeping your products top-of-mind with your target audience.

Be authentic

Yes, social commerce is all about driving revenue, but a hard sell won’t work. Your shoppable ads and other content should be conversational in tone and feel like they’re from a friend, not from a corporate marketing department. Social media is, after all, rooted in the idea of being social. Be personable. Be engaging. Let your brand sell itself.

Actively listen

Watch your feed for reactions and comments. When a buyer requests help or more information, respond quickly. Find ways to give customers incentives for posting reviews. Make sure that the experience you give your customers on social media offers the same level of attention and responsiveness as on any other channel.

With easy integrations, ready-made social posts, and more, the Wix eCommerce platform is designed to help you become a social commerce superstar. Start now .

Geraldine Feehily

Bogar Alonso

Head of Outbound Marketing, Wix eCommerce

Bogar leads thought leadership and outbound marketing for Wix eCommerce. He has an extremely soft spot for all things eCommerce, retail, tech, content, and marketing.

  • Sell Online

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Market Business News

What is social commerce? Definition and meaning

Social Commerce is a kind of e-commerce (electronic commerce) that uses online social networks to help in the buying and selling of goods and services. Social commerce uses ratings, online communities, social advertising, F-commerce (Facebook commerce), shares, and stores within the social networking website to buy and sell things.

It is not the same as just ‘commerce’, which is a component of business that focuses on the buying and selling of products and services, usually at macroeconomic scale (large scale).

The term was first used by Yahoo in 2005 to describe a set of collaborative shopping tools such as user ratings, shared pick lists, and other user-generated content-sharing advice and product information.

Social commerce refers to new online marketing strategies or retail models that incorporate peer-to-peer communication – established social networks – to boost sales.

Social commerce is a combination of social networking and e-commerce

The Financial Times Lexicon says the following regarding social commerce and social shopping:

“Social commerce and social shopping communities merge online shopping and social networking allowing people to actively participate in the marketing and selling of products and services.”

“The distinction between social shopping and social commerce is that while social shopping connects customers, social commerce connects sellers. The term social commerce is often used in practice to describe social shopping as well.”

There are four defining features associated with social commerce marketplaces:

  • The sellers are individual people rather than companies.
  • The sellers are involved in the creation of product assortments organized as personalized online stores.
  • The sellers can place hyperlinks between their custom-made, personalized stores.
  • The sellers are paid commissions on the sales made by their personalized stores.

What you get are consumer-driven online marketplaces of personalized shops created by individuals – all connected in a network. Customers can move from shop to shop via hyperlinks.

Social Networking is all about people connecting with people, and perhaps brands are inserting themselves into those conversations. With Social Commerce it is also about people connecting with people, but in this case they are doing so around a natural passion they have for a category or a brand.

Social commerce & social media

Marketing expert Heidi Cohen says that social commerce is where ‘social media meets shopping’ .

According to Ms. Cohen:

“Social commerce is the act of consumers with similar interests, passions and needs collectively engaging in conversations related to products and services that satisfy those interests, passions and needs.”

“Those conversations usually segue into several types of actions, such as recommending the products and services to more of their peers, and ultimately the purchase of those products and services.”

Several social commerce websites had been around for a decade when Yahoo first used the term. The peer-to-peer selling platform eBay emerged in 1995. Epilogue, founded in 2000, allows users to discuss, post, and sell their or sci-fi and fantasy art online.

In today’s online marketplace, social commerce represents a wide range of shopping, recommending and selling patterns and behaviors.

Social commerce – 7 categories

Writing in Mashable , Lauren Indvik breaks down social commerce into seven different categories:

– Social Network-Driven: sales that result from referrals from social network websites such as Twitter, Facebook, Pinterest, etc. The ones that occur within Facebook are F-commerce (Facebook commerce) transactions.

– Peer-to-peer sales platforms: where two private individuals buy or sell products or services directly with each other, with no third-party intermediary. The purchaser and seller transact directly with each other. On the Internet, these are community-based marketplaces or bazaars, such as eBay, Amazon Marketplace, or Etsy.

Mark Zuckerberg quote about Social Commerce

– User-Curated Shopping:  refers to social shopping sites where users create and share lists of goods and services for others to shop from. The best example of this type of marketplace are Svpply, Lyst and The Fancy.

– Group Buying: if enough purchasers agree to buy something they are offered at a discount. Examples of this kind of online marketplace include LivingSocial and Groupon.

– Peer Recommendations: these occur in websites that contain product or service reviews by previous purchasers. Users are often rewarded for sharing products and items bought with friends through social networks.

– Participatory Commerce:  this sales model allows shoppers to participate in the design, selection or funding of the goods they buy. It revolves around the idea that if buyers are involved as much as possible in the creation of products, they will feel more at home when shopping at a special store or business.

The most common form of participatory commerce (P-commerce) relates to the customization of consumer products, other forms exist where users can decide which products a seller will offer and how their projects are financed.

Retail experts say that P-commerce is the future of consumer shopping and a brilliant way to increase the bottom line. Examples of this kind of marketplace include CutOnYourBias, Kickstarter and Threadless.

– Social Shopping:  this is a slang phrase used to describe networked shopping. In e-commerce, it refers to consumers that use social networking services and sites to share the latest items they bought, deals, coupons, want lists, product reviews, and other shopping finds.

Affiliate lists may be used by some users when writing about shopping and products on social spaces such as Twitter or Facebook. Examples include Motilo, GoTryItOn and Fashism.

Video – What is social commerce?

As this Powered Webmaster video explains, social commerce is really the combination of social networking and e-commerce. It is what you get when social networking meets the consumer purchase process.

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social commerce business model definition

What is social commerce? Definition, examples, stats

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For nearly as long as humans have existed, so has a form of retail. Granted, it’s evolved, but history shows people have always been taking part in social commerce: sharing, bartering, selling, and consuming resources.

The first currency dates back as far as 3000 BC in Mesopotamia, and from around 800 BC in ancient Greece, markets had been developed in the Agora in the city centre, with merchants selling to consumers. And, one of the first product catalogs is reported to have been created in 1498 by Aldus Manutius in Venice, who printed a catalog of the books he was painting.

History also shows it’s not just the local, physical “bricks-and-mortar” (or in the case of ancient Greece, stone), stores that have always piqued our interest.

The first modern mail order arrived in the world of retail, in 1861, when Welsh entrepreneur Pryce Pryce-Jones utilized the extension of the railway network to distribute his goods to consumers across the country, after they had browsed his catalog, and placed an order via the post.

Then, in the 1970’s we were introduced to the concept of telesales (or telemarketing) – an expansion on our opportunity to source products further afield, and continue that age old tradition of sharing, bartering, selling, and consuming resources.

Fast-forward to today, and the world is even more connected. Through the development and adoption of technology we can now access a wealth of products and services at the click of a button, from anywhere around the world, at any time of the day.

And with that, social commerce arrived on the scene.

#CXTweetChat unveils retail doing it right, social platforms letting loose

transparency in retail

What is social commerce? Social commerce defined

Social commerce is the use of a social network community to drive e-commerce sales, and it’s a massive market: By 2027, it’s projected that social commerce will drive $604 billion in sales.

Apps like Facebook, Instagram , and Pinterest have both dedicated “buy now” indicators on ads, as well as live streams run by influencers that are resulting in e-commerce goods being sold out on the regular.

Social commerce has been a game-changer for smaller brands, allowing them to easily compete in crowded marketplaces. However, now big retailers are hopping on board. For example, Walmart plans to start selling their products via influencers directly on TikTok in 2021 .

As you might have guessed, social commerce grew tremendously in 2020: “Amid the COVID-19 crisis, the global market for Social Commerce estimated at US$89.4 Billion in the year 2020, is projected to reach a revised size of US$604.5 Billion by 2027, growing at a CAGR of 31.4% over the analysis period 2020-2027.”

A brief history of social commerce

1997 presented us with the first recognizable social media platform, Six Degrees, allowing users to create an online profile and connect with friends and other platform users. Many marketeers initially viewed this as a fad that would fade away just as quickly as it appeared.

However, as access to the internet and technology picked up pace, so did our adoption of an ever-increasing variety of online channels to source and share information.

In 2011, with growing momentum, and a change in consumer behavior and expectations, Facebook launched sponsored stories as a form of advertising.

For merchants, this opened the door to a wealth of consumer purchase data, and a broader, worldwide audience. However, from a merchant’s perspective, it also meant more competition and noise to cut through in order to stand out.

From a consumer perspective, it provided more sharing, bartering, and consuming power. After all, how often do you settle for the first price now while online shopping? You don’t need to fret over bartering in person – a couple of searches or checks on a comparison site, and you can easily tick the “buy now” box.

The power of customer reviews was also borne of the social commerce revolution.

A recent report shows that approximately 86% of consumers view product reviews as an essential aspect when researching and selecting products to buy. And, social media is a very strong platform for sharing such information – bringing marketeers the arena of social proofing.

In essence, social proofing is the notion that people follow the actions of others. When purchasing a product or service, this is shown to be a very valuable tool consumers use, with access to an array of information and very little need to search. From friends and family sharing a brand’s social post, reading the comments left by other platform users, or a post endorsing the brand by an influential celebrity – they all play a part in the sales funnel – either driving or diverting engagement along that path.

Whether you’re a small start-up, or a global brand, social media is very likely to now be a key part to your sales strategy – through both social media marketing and social commerce. It’s not just about posts to advertise and drive awareness; the social commerce world is shifting, perhaps as a result of 2020, quicker than we imagined.

Consumers are showing an appetite to use these platforms as a method to not just research, but to also transact; making a purchase with a couple clicks, while scrolling and catching up on the latest from friends or influencers they follow.

So, what’s the difference between social media marketing and social commerce?

At a high-level, here’s the difference between social media marketing and social commerce:

Social media marketing is used by brands to drive traffic to their websites. Brands will post ads showcasing their products and/or services, and include a CTA (call to action), for consumers to click-through to the website.

The cost of such ads is usually based on the number of likely impressions the ad will gain and/or a cost-per-click (CPC,  although that’s more commonly used in search engine paid ads, like Google). But, this cost is factored into that all important CPA (cost per acquisition), and ultimately takes the consumer out of their social media journey.

Social commerce allows consumers to purchase products and services from a brand directly, from within the social commerce platform. This could be via either clicking on a paid ad (like the above), or by clicking on the “View Shop” CTA on the brand’s social media profile (page).

Using social commerce, the entire online shopping experience can happen without the consumer having to leave the social media site they’re on. In essence, this can mean less interruption for the consumer, allowing them to transact in the moment, with fewer clicks, and utilizing features like autofill payments.

Throughout 2020, the digital world evolved even faster than anticipated as a result of the COVID-19 global pandemic . An almost overnight change in consumer behavior and expectations accelerated the online retail arena, and it’s often said that as a result, the e-commerce world has accelerated five years of growth in just five months.

In some instances across the globe, retailers have had to close their physical locations and/or scale back. As a result, they’ve prioritized cash preservation and overhead costs, demanding automation and digitalization even more to meet the rapidly changing landscape.

In parallel, the same can be seen across consumer behaviors, with people staying home and instead shopping online; growing numbers of consumers have adapted to the online shopping methods and channels available to them, which they may have overlooked before.

While the more traditional brick-and-mortar stores will always have a role in our retail world , they’re likely to evolve greatly with regard as to how they serve consumers, and the role they play in the consumer lifecycle. Whereas the recent shifts we’re seeing across the e-commerce arena are likely to become even more embedded in our everyday world and will continue to grow from there.

Although the global pandemic may have accelerated these commerce changes, they were already emerging. As consumers, in a world that’s continually becoming more and more connected and fast-paced, we often crave convenience, which digitalization of commerce world helps provide.

I have a small glimpse of this experience first-hand, from both the perspective of a consumer and a merchant.

The consumer e-commerce experience

When it comes to e-commerce, like many, I’d have considered myself an established consumer, and prior to 2020, thought of myself as an early adopter. However, we’ve come to learn just how much social media platforms can be used throughout all stages of the buying lifecycle.

Before 2020, consumers may have simply followed brands they liked for inspiration (or to know when a sale was launched). But now we’ve come to realize social channels can be a great tool for researching products, or we save posts and ideas for future purchases.

Social platforms are also an excellent place to contact brands or their communities, post-purchase for help and advice .

What’s more, in a world where we’re presently separated from friends and family, social has become more of a tool for us to share ideas and similar interests.

We should expect these conveniences will stay in our online world as we become more accustomed to them, and anticipate further mass adoption of social commerce into our regular shopping habits.

However, while the shopping experience is relatively simple, there are a few minor items that can be a bit annoying.

For example, as a consumer, if I’m scrolling, catching up on updates from friends and the latest news or funny cat videos (who can resist), and your ad catches my attention, getting me to click that “Shop Now” button, please navigate me to that item. Some brands will expect you to find your own way.

Even better: Only tempt consumers with items that are actually in stock, and available to be shipped to where they live or else they’re likely to bounce, and probably think twice about tapping on your “Shop Now” post in the future.

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Merchant perspective on social commerce

Whether you’re a small start-up or an established brand, social media and social commerce are hugely powerful tools. With a small e-commerce storefront of my own, I’ve experienced first-hand how powerful building an online community can be in helping reach your audience and make the world (or at least a small corner) aware of your offerings.

Building an online community, no matter how big or small, can be invaluable for helping with social-proof. We all know happy customers can be a great social advocate among their network, and how this can grow organically.

And, with more and more of us flocking to social media sites, it’s where your customers are most likely hanging out, providing a great chance they’ll see your latest offerings. That includes those already following you, who will see your organic posts, and those who aren’t, but could be reached with relevant paid ads and promoted posts.

With a world that’s becoming increasingly accustomed to being able to source products and information, anywhere, and at anytime of the day, you can easily make use of tools available to pre-load and schedule content and to continually work towards increasing engagement and awareness, without having to always be physically working.

However, while the foundational tools to achieve both a near personalized social commerce experience and optimization of CPA are mostly there today, from a merchant’s perspective, the methods to bring it all together in a seamless consumer journey can still feel overwhelming, complex, and disconnected between platforms.

The consumers are there – they’re engaged and actively using social at a vastly growing rate, each and every day (and night). However, as a merchant, I believe there’s still a long and exciting journey to embark upon in the world of social commerce and social marketing to truly unlock the power of using these platforms to better showcase offerings to existing and potential customers throughout the buying lifecycle.

So, what comes next in social commerce?

It goes without saying, that as consumer behaviors surrounding e-commerce and social commerce rapidly evolve, so will a new wealth of data and opportunity, allowing brands to understand even more about their existing and potential audiences.

Here are several items about social commerce to watch and understand:

  • Brands will need to embrace an end-to-end commerce strategy, supporting consumers in the buying lifecycle, and bringing relevancy from browsing to post-sales support.
  • Using brand data across all digital touch points allows for better interactions with consumers.
  • Personalization allows brands to present products and services that are of greatest interest to consumers specifically, at the right time and place, without causing annoyance or disruption to their social or onsite experience.
  • Providing consumers with even more relevant experiences can help better optimize marketing spend, with clear and measurable strategies to utilize both paid and organic activity, further supporting brands to prioritize cash preservation and overhead costs.

As both a merchant and consumer, a core foundational element of promoting and selling via social media is using only products and services that are in-stock and available to consumers in their region. This is a fundamental element in succeeding in those early engagement stages, as we ensure consumers are seamlessly guided towards a successful purchase.

As more brands become increasingly familiar with building their social commerce and social marketing strategy, they’ll learn how to best use data and insights from across digital experiences to focus small volumes of higher quality, and more relevant content to help entice consumers at the right time, with the right product.

And, in doing so, they’ll cut through the extra noise from the competition on this same path.

Consumers buy from sellers that make buying simple. Is your brand ready? Get started HERE .

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9 innovative startups bringing social shopping into the mainstream in the US

This story is available exclusively to business insider subscribers. become an insider and start reading now..

  • Social shopping is on the rise in the US, as big tech and upstarts alike chase e-commerce dollars.
  • While social commerce has exploded in Asia, it's still in its infancy in North America.
  • Here are nine startups that are helping US brands, creators, and consumers get into social shopping.

The race to integrate shopping into social media in the US kicked into high gear this year.

Big social platforms including YouTube, TikTok, and Pinterest are adding new commerce features at a fast clip. A slew of startups have also been rushing to introduce products and services that help brands, influencers, and — perhaps most importantly — consumers get used to the idea of buying on social media.

Some companies, like Whatnot and Flip, are building separate apps for brands and creators to sell products through livestreams. Other upstarts, such as Orca and Ghost Agency, are taking a more agnostic approach, working with brands on live-selling production for platforms like TikTok or Twitch.

The goal for many of these companies is to offer products and services that encourage US buyers to act more like consumers in Asia, where shoppable videos and livestream influencers drive billions in product sales each year.

Orca cofounder and CEO Max Benator told Insider he was blown away by the maturity of the live-shopping ecosystem in China, which he witnessed first-hand during a recent business trip.

"What I saw was incredible," he said, pointing to a series of training programs in the country where companies teach livestream hosts how to effectively pitch goods to users. "Here people are still learning," he said of the US market.

Importing shopping habits from other parts of the world to the US isn't an easy task.

Some upstarts are finding ways to tap into existing US consumer behaviors. The startup Ntwrk built a business on exclusive product drops from well-known celebrities and designers, a selling style popular among streetwear brands, for example.

Insider compiled a list of nine startups that are helping creators, brands, retailers, and consumers break into social shopping in the US. We vetted nominations from industry experts, readers, and the major social-media platforms.

Here are the companies, listed in alphabetical order:

Buywith partners with brands to organize livestreams with creators on a company's website

social commerce business model definition

Buywith offers technology that brands including Ulta Beauty, Dyson, and Tupperware use to integrate livestream shopping into their websites.

It offers a "shop with me" experience that allows creators to share their screen, as they would on a video call, and show how they browse a brand's website for products. The creator also appears while livestreaming in a smaller window on the page, so they can interact with users.

Buywith presents itself as a simple and effective way for brands to get closer to their customers because it doesn't require app downloads or high-end production and equipment. The company also has a creator marketplace where brands can select influencers to host their livestream shows.

The company said it has raised a total of $9.5 million in funding since it was founded in 2018.

"Social shopping has transcended the realm of mere products; it's about selling experiences, values, and fostering a vibrant community," a company spokesperson told Insider. "This reflects the evolving dynamics of the retail world."

Emcee wants to turn creators into retailers with their own 'storefronts'

social commerce business model definition

After working in the fashion-retail industry for several years, John Aghayan came up with the idea for Emcee. He realized the power influencers have to guide the shopping experience for social-media users.

Emcee allows creators to curate online "storefronts" of their favorite products, beyond the traditional affiliate-marketing model other platforms provide. It lets them become "retailers" as opposed to just "affiliates," Aghayan said.

The platform integrates with Shopify's API, allowing creators to access data about how their storefronts are performing. Next year, the company plans to launch an app that will aggregate all "showrooms" into a scrollable feed.

Emcee currently caters primarily to high-end fashion brands and creators. It has partnered with brands including Luar and Dion Lee to collaborate with influencers who design bespoke products sold exclusively on the platform. The company has also organized IRL events and sponsored several shows at the most recent fashion weeks in New York and Paris, bringing creators to front-row seats.

"The issue is that [the industry is] trying to retrofit commerce into something that the user is accustomed to using for something else, whether it's at Instagram, to connect with friends, or TikTok, for entertainment," Aghayan said. Instead, he believes social commerce is more suited to an external platform like Emcee.

The platform says it currently hosts the storefronts of more than 1,000 creators, as well as over 250 brands.

Flavrs is a shoppable-video app for all things food and cooking

social commerce business model definition

Flavrs is a shoppable app that specializes in food content. Cofounders Alejandro Oropeza and François Chu, who both have experience in Big Tech, launched the platform in 2022 when they noticed the potential for an improved video-app experience that allows users to shop and recreate recipes.

"Short-form video is the new language, but the thing that's interesting is, it's not just watching, right? We are the place where you can go from watching to doing something about it," Oropeza told Insider.

Flavrs presents a scrollable feed of short videos, aiming to provide a "video-to-ingredients" and "video-to-takeout" experience. Thanks to an integration with grocery-delivery service Instacart, users can automatically add ingredients from a video recipe they see on the app to their shopping list; alternatively, with a newly launched feature, they can be redirected to Uber Eats to order the dishes they see on the app for delivery. This feature is being tested in San Francisco with 25 restaurants, with the goal of expanding to more US cities.

The company also just launched an AI feature powered by OpenAI to allow users to personalize their content search and creators to easily upload and annotate plain-text recipes.

The company said it has raised $7 million in funding and counts creators like Binging with Babish and celebrity chef Eric Ripert among its users. The platform provides a revenue-share model for creators and introduced in 2023 a program to give some of them equity in the company.

Flip is TikTok for users who just want to shop

social commerce business model definition

Flip is a social-shopping app that looks a lot like TikTok would if it focused exclusively on its e-commerce feature, TikTok Shop .

Flip's users post short videos where they review products that other users can purchase in the app. Creators earn money for video engagement and the sales their videos help drive. The company also operates a software product for sellers called MagicOS, which offers sales tracking, inventory management, and marketing tools for merchants.

The company has recently seen a surge in downloads as it's rolled out a generous referral program , offering spend credits to users who get their friends to sign up for the platform. Flip currently ranks among the top 15 shopping apps on the Apple App Store.

The app launched in 2019 with a different model centered on receiving clothing in the mail based on a user's interactions with social content. The company said in an April press release that it had raised around $95 million across various funding rounds.

Ghost Agency is helping brands and influencers avoid coming on too strong during livestreams

social commerce business model definition

Ghost Agency is a Los Angeles-based social-commerce company that works with brands and creators to make short videos, livestreams, and other social content shoppable.

Founded in 2022 by Jenny Woo and Nicole Rechtszaid, the upstart primarily focuses on platforms like TikTok Shop, Twitch, and Amazon Live. It recently opened a studio in LA to help brands coordinate live shopping streams and other content. It's also developing an educational program on live selling for creators to help them understand how to use platforms like TikTok Shop.

The company said its client list includes brands like Brightkins, Kafx Body, Trio Beauty, and Educational Insights.

Ghost Agency's cofounders told Insider the content and production style for livestream shopping need to be customized based on country and brand.

"A lot of times brands will think production first, but production value doesn't always equate to sales or equate to more engagement," Woo said. Brands looking to sell to US consumers should avoid having a video feel too commercial, she said.

"In terms of a US audience, it's going to be something where you don't want to directly sell to them," Rechtszaid said. "They don't want to feel like they've been influenced."

Livescale makes it easy for sellers to create branded shopping events

social commerce business model definition

Livescale is a commerce platform tailored to sellers who want to create a branded live-shopping event.

The company's white-label platform allows sellers to customize the look of a shopping stream to match a company's particular branding.

Founded in 2016, Livescale operates an app for Shopify sellers, as well as a marketplace for brands, creators, content producers, and other live-shopping talent to connect. It also runs an agency branch that offers services like live-selling coaching and production services.

Livescale said it's worked with brands including L'Oréal, Giorgio Armani Beauty, and Lancôme. Livescale's chief growth officer, Chanida Rayrolles, told Insider the platform hosts streams for between 50,000 and 200,000 monthly active shoppers, depending on the season.

Ntwrk is blending product drops and social commerce

social commerce business model definition

Ntwrk is a social-shopping platform built around livestreams and exclusive drops with a particular focus on collectibles like designer toys, trading cards, and shoes.

Brands, artists, and resellers can use the platform to list products for sale, host auctions, or produce live-shopping shows. The company launched in 2018 and has hosted products and limited drops for companies including Riot Games, Levi Strauss & Co., ESPN, and Complex Networks, which the New York Times reported Ntwrk is in talks to acquire.

Ntwrk's CEO Aaron Levant told Modern Retail last November that the company primarily works with high-profile celebrities or brands and resellers that operate a storefront or warehouse with millions of dollars of inventory.

"Exclusive celebrity drops are the shiny object that sit at the top of that funnel that draws people in," Levant said. "But they really stay for the thousands of other livestreams that we have on a monthly basis."

Orca creates the infrastructure for brands to launch and scale their social shopping strategies

social commerce business model definition

Orca describes itself as a "complete livestream and social-commerce solution." Founded in 2020 by Max Benator and Lauren Stevens, the company helps brands strategize, launch, and scale their social-commerce operations on social media and shopping platforms including TikTok, YouTube, and Amazon.

Orca works with brands to design and produce live-shopping shows seven days a week out of its two studios in Culver City, California. It also produces shoppable short videos, manages affiliate programs with creators, and deals with back-end operations like merchandising strategy, inventory management, and technical integrations for social commerce.

The company counts a team of 20 employees, as well as two dozen in-house livestreaming hosts. It has worked with brands including Estée Lauder, ELF Cosmetics, Unilever, Nestlé, Samsung, and KimChi Chic Beauty. And it's produced events for Amazon and Zappos.

Whatnot believes livestream shopping fosters community and is more efficient than other types of e-commerce

social commerce business model definition

Founded in 2019 as a marketplace for collectibles like Funko figurines, Whatnot says it has evolved into one of the largest livestream-shopping platforms in the US. Backed by venture capital funds Andreessen Horowitz, YC Continuity, and CapitalG, Whatnot reached a $3.7 billion valuation after raising a $260 million Series D round in 2022.

Whatnot said it's betting on livestream shopping as a way to foster community and allow sellers of all sizes to build sustainable businesses beyond social media and static marketplaces. Whatnot said a livestream is a more efficient way to sell because it allows businesses to sell more products faster than on a standard e-commerce website.

"There's definitely this sense of urgency and excitement for consumers who are watching these livestreams," a company spokesperson told Insider.

The company said nearly 2,000 of its sellers generate over $10,000 a month in sales. In 2022, more than 100 sellers sold over $1 million in merchandise each, with top sellers earning close to eight figures a year. According to internal research, the platform's daily active users spend more time on Whatnot per day than Instagram and X combined.

social commerce business model definition

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Anna Thompson

E-commerce is changing all the time. To help you keep up with the changes, we have picked out 15 of the latest e-commerce trends, with insights, data, and some suggested next steps, to help you make the most of those that are relevant to your business. But first, let’s put these trends into context by taking a look at the e-commerce landscape.

The current e-commerce landscape.

The global pandemic accelerated the shift from physical retail to e-commerce. According to Forbes 1 , in 2023, 20.8% of global retail purchases are expected to take place online.

Competition within the e-commerce sector has never been fiercer, so, to stay ahead, business owners need to be aware of the latest trends in e-commerce and integrate those that are relevant into their growth strategy.  

1. AR and VR enhance online shopping

One of the biggest emerging trends in e-commerce is the use of Augmented Reality and Virtual Reality to enhance the online shopping experience.

AR integrates the real, physical world with computer-generated visuals, sound or both. VR puts the user in a computer-generated, but seemingly real, environment using a VR headset.

AR and VR can give customers a far more realistic idea of what a product is actually like – for example, how an item of clothing fits or how a shade of paint looks on a wall in a room. If the technologies are adopted as widely as some experts predict, shoppers will have even less reason to visit bricks-and-mortar stores. 

Tessa Wuertz, Director of Marketing & Partnerships at  efelle.com , predicts small and medium-sized businesses will increasingly use AR:

“We are expecting a lot more businesses to utilize AR for their products and businesses — so much so that it will become more standard in e-commerce and social media platforms. We’re seeing it put to use with larger companies, but I think we’re soon going to start seeing it become mainstream for businesses of all sizes.” 2

  • Integrating AR features within your brand’s website or app will give your customers a better idea of the products they’re buying – and in turn, reduce your returns rate.

2. Voice search and visual search will both grow

Voice search is a fast-growing online shopping trend. Nearly half (47%) of shoppers have used voice command technology to make an online purchase and 58% were satisfied with the experience 3 . 

Smart e-commerce business owners will need to optimize their e-commerce stores for voice search on Google, using keywords and phrases.

Visual search – allowing consumers to carry out searches using images – is a less developed e-commerce trend, with only 8% of brands offering it currently. However, with 62% of Millennials and Gen Z wanting to use visual search, it’s only a matter of time before it becomes mainstream.

  • Use a semantic strategy instead of a keyword based strategy – semantic SEO will ensure your voice search technology recognizes the more natural way your customers search with speech than if they were typing.


3. AI will collect even more data

Online customers have come to expect truly personalized experiences online – and that is where the new generation of AI-powered technologies is transformative. It can understand customer behavioral data on a deeper level to help businesses increase customer engagement and conversion rates.

The opportunities AI affords to e-commerce businesses are endless, but some of the ways it can improve operations include:

  • Based on previous browsing history data, AI can help businesses deliver highly personalized product recommendations to customers
  • AI can improve written and visual content – like product descriptions – to be more accurate and impactful
  • AI-powered chatbots can track previous customer conversations to find them a solution quicker

4.   On-site shopping will be more personalized – or not

Data collected by AI allows businesses to deliver customers personalized experiences when shopping online – such as tailored product recommendations. This incentivizes shoppers to complete the purchase.

However, consumers are increasingly resistant to sharing their data. This will be especially true when that personalization expands out of shopping platforms and begins to appear elsewhere, on other gadgets in the home, thanks to the  Internet of Things.

  • Use your customers’ past purchasing history to send them deals and discounts on related products.
  • Be sure to flag your data privacy policy whenever you ask customers for information.

5. Returns remain a dilemma

Research shows that free returns are a huge draw for consumers, yet around 30% of all online orders are returned, making it an expensive feature for businesses to offer.   

One of the emerging e-commerce trends is businesses charging a fee for returns – with retail giants like Zara and Uniqlo introducing the policy last year. So, what should your business do?

  • You could offer free returns to your customers for a trial period to assess whether the increased sales eclipse the cost to your business.
  • Prevention is better than cure – look to reduce your returns rate in the first place with  these tips .

6. Chatbots will be everywhere

Chatbots will increasingly be used for customer support in e-commerce, with the global market expected to be worth US$3.99 billion by 2030 4 .

As the e-commerce market becomes ever more competitive, efficient customer service from a chatbot can be the difference between a frustrated customer leaving your webstore to shop elsewhere, and staying to make a purchase.

The most sophisticated chatbots can even use a customer’s previous data to anticipate which products will appeal to them or suggest a product that complements a recent purchase – boosting sales further.

  • Discover exactly how chatbots could transform your business’s sales with our deep dive into this innovative technology. Be inspired,  here .

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7. M-commerce will continue growing

Mobile commerce, or m-commerce, can be defined as the buying and selling of goods and services using wireless handheld devices, such as smartphones and tablets. Customers can shop anytime, anywhere – meaning lucrative opportunities for your business.

According to Statista 5 , smartphone retail commerce sales are projected to top US$400 billion by 2024, nearly double the amount forecast for 2021.

  • Ensure your current website is optimized for mobile.
  • Even better, invest in a dedicated  mobile app  for your business – conversion rates through mobile apps are 130% higher compared to mobile-first websites.

8. Social selling is growing too

With more and more social platforms enabling consumers to buy directly from businesses without leaving the app, social sales are expected to triple to US$1.2 trillion by 2025, according to a study by Accenture 7 .

For smaller e-commerce businesses in particular, social media commerce represents a cost-effective sales route.

  • Many people use social media to research brands before buying, so ensure your feeds have lots of product information and high-definition photos. Be sure to reply to followers’ questions quickly.
  • Add in-app shopping features to your social media channels to make it easy for customers to buy from your brand.
  • If you’re exploring  influencer marketing , focus on follower engagement rather than just follower numbers.

9. More payment options

Online payment solutions are constantly evolving, with “Buy Now Pay Later” services currently in the spotlight. These allow online customers to pay for their purchases in installments, and is offered by companies such as Klarna, PayPal and Afterpay. According to Mastercard, which has recently introduced Mastercard Installments, it reduces online cart abandonment rates by 35% 8 .

  • Online shoppers are 70% more likely to finalize a purchase if their preferred payment method is displayed as an option at checkout, so offer lots of choice –  these  are the ones to consider.
  • If you sell to international customers, be sure to research local payment preferences. Our  Country Guides  have the insights you need.

10. More businesses will switch to headless commerce

In a recent survey by Salesforce 9 , 80% of business leaders said they plan to switch to headless commerce. So, what is it and why is it one of the most popular e-commerce trends?

Put simply, headless commerce is a next generation e-commerce solution that decouples a website or application’s front and back ends. It uses application programming interfaces (APIs) to deliver content to any front-end framework.

As a result, customers will be able to shop online via Internet of Things (IoT) devices such as smart speakers, smart fitness devices, or even smart fridges – not just the usual PCs, laptops and smartphones. By bringing together all these online shopping routes, headless commerce increases flexibility, and adds new sales opportunities. And because it can quickly incorporate new sales channels, it can also streamline omnichannel selling.

All these benefits will make headless commerce one of the most future-proof trends in e-commerce.

  • For small businesses, adding an API to their existing commerce platform is a good first step into headless commerce. Via this, they can customize their front-end to create the exact look and feel of their brand.

man holding items smiling at camera

11. The continued importance of video marketing

Video can give customers a much better picture of a product than even the most detailed description, so it’s no wonder it’s a growing trend in online shopping.

You can use video to show the size of a product, how it works, and how it looks. And the more a customer knows about a product before buying, the less likely they are to return it – saving you money in the long run.

  • Experiment with video across your social media channels – customer testimonials and “how to” guides are great for engaging your audience.

12. Subscriptions

Online subscriptions meet the need for both customer convenience and predictable, regular revenue for businesses.

Subscriptions can be used for everything from streaming services like Netflix, to regular deliveries of food and other essentials. The model is also growing in popularity amongst Millennials, so it looks like it’s here to stay. In fact, it’s expected to be worth $2419.69 billion 10  by 2028.

  • Customers love a deal – they’ll only join your subscription service if it works out as cheaper than buying ad hoc, so be prepared to offer discounts.
  • Create a sense of community by giving special treats to members – like a discount code on their birthday.

13. Sustainability is now essential

Eco-conscious consumers are increasingly choosing to shop with sustainable brands. As well as minimizing packaging and using recycled materials for your products wherever possible, you need to be mindful of who you choose as a logistics partner.

  • Talk to DHL! The logistics leader has set itself the ambitious goal of zero emisssions by 2050 – and has hit many of its targets early along the way. Discover which of its GoGreen services – from climate neutral shipping to carbon offsetting – is right for your business,  here .

14. Optimizing for conversion

In an economic climate where people are spending less, it’s vital to convert visitors to your webshop into purchasers. Using conversion rate optimization (CRO) tools can help you achieve this. They include behavior analytics tools, web analytics tools and CRO testing tools.

According to Verfacto 10 , the average return on investment of using CRO tools is more than 223%. Using the right combination will help you provide the very best user experience and convert traffic into sales.

  • Look into CRO tools such as Hotjar and Glassbox for qualitiative data analysis, and Google Analytics or Mixpanel for quantitative data.

two men shaking hands over a table

15. The continued growth of B2B e-commerce

Alongside B2C e-commerce, B2B e-commerce was also boosted by COVID, as traditional B2B transactions were forced online. Furthermore, the change is being driven by an increase in Millennials in key B2B decision-making roles. This generation, which has grown up with the internet, prefers to research products online to dealing with sales people over the phone or in person. All things considered, the growth of B2B appears to be an e-commerce trend that will accelerate rather than reverse.

  • Download Discover’s  exclusive guide to B2B e-commerce  to maximize every opportunity this emerging sector has to offer.

Deciding which e-commerce trends to follow

Of course, not all the trends discussed above will be relevant to your business, but there are a few good indicators you can follow. For a start, keep a close eye on what’s being talked about in your industry. If a respected industry blogger is writing about one of the trends, it’s probably worth looking into it further. Likewise, make sure you’re up-to-date with the latest research and industry trend reports.

Another good indicator is your own customers. Use analytics to track their behavior and gain insights. By using the data, you may well be able to decide whether a particular online shopping trend will work for your customers. And of course, you can always ask them directly for feedback – always a good source of insights.

Finally, look at your competitors. What are they doing and is it working for them? Then draw your own conclusions.


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    Social commerce gives you the chance to integrate your products into the type of content that social media users crave, such as videos that show your shoppers using your product, or polls that allow consumers to vote for different product styles or options. And nearly every eCommerce merchant is getting into the social commerce game.

  10. Understanding social commerce: A systematic literature review and

    ⿢ ⿢ Abstract Web 2.0 technologies and social media gave a rise to social commerce as a new phenomenon in the business world. Recently, social commerce gained a major attention from both academics and practitioners. Numerous studies have been conducted to understand s-commerce and examine its impact.

  11. What is social commerce?

    Social commerce is a rapidly growing branch of e-commerce that uses social networks and digital media to facilitate transactions between businesses and customers. It encompasses activities such as product discovery, reviews, ratings, sharing, recommendations, transactions and loyalty programs. In other words, social commerce taps into the ...

  12. What is social commerce? Definition and meaning

    According to Ms. Cohen: "Social commerce is the act of consumers with similar interests, passions and needs collectively engaging in conversations related to products and services that satisfy those interests, passions and needs.". "Those conversations usually segue into several types of actions, such as recommending the products and ...

  13. What Is Social Commerce? Definition, Examples, Stats

    Social commerce defined Social commerce is the use of a social network community to drive e-commerce sales, and it's a massive market: By 2027, it's projected that social commerce will drive $604 billion in sales.

  14. Framework for Understanding the Business Model of Social Commerce

    With the popularity and growth of social media, social commerce has been quickly emerged as a new phenomenon. It represents a shift in consumers' thinking from individual decisions to collaborative decision. However it has not yet been fully understood, especially about the business model of different types of social commerce. This paper offers a literature review on the definition and ...

  15. What Is Social Commerce? (And How To Implement It)

    The definition of social commerce is selling products and services directly through social media sites such as Facebook, Instagram, Twitter, and Pinterest. It differs from typical social media advertising and marketing, which aims to direct users off the social media site to make a purchase. Social commerce makes the purchase process much more ...

  16. Under what conditions will social commerce business models survive

    The business model of social commerce may seem to be IT-intensive, but it heavily relies upon other things too. Human resources and manpower are critical and costly in the competition that occurs in this industry. ... Marsden (2010, p. 4) has offered a broad definition of social commerce as follows: "Simply defined, social commerce is the ...

  17. What Is Social Commerce? Plus Benefits and Tips for Engaging ...

    Social commerce refers to electronic commerce, or e-commerce, processes which take place on social media. With social commerce, consumers can browse, shop and buy products from brands and individual sellers directly on social media platforms.

  18. What is Social Commerce: Definition and Examples

    Social commerce is the promotion of products and services through networking websites. The numbers of retweets, likes and post shares are measures of success for social commerce campaigns. Social commerce also seeks to engage online shoppers by offering expert product advice and support.

  19. PDF Framework for Understanding the Business Model of Social Commerce

    developing their social commerce strategy and turning hype into real profit. 2. The Driving Force Behind Social Commerce 2.1. The Definition of Social Commerce Since the term was introduced by Yahoo in 2005 [13], social commerce has been largely driven by practice rather than by research. Customers can collaborate online, exchange

  20. Social Commerce: A Concept Explication

    Social Commerce (SC) is defined in the literature as "the delivery of e-commerce activities and transactions via the social media environment" [ 1, p. 6]. SC is a growing phenomenon and novel area of research [ 2, 3, 4 ]. It is expected to redefine the consumer shopping experience and assume an increasingly important position among ...

  21. PDF A Study of Social Commerce Business Model

    Social commerce (s-commerce), an evolution of electronic commerce (e-commerce) 2 that highlights the role of online social networking in facilitating business, has gained

  22. Social Commerce: Foundations, Social Marketing, and Advertising

    In Chapter 6, we introduced the concept of location-based advertising and marketing as a business model for m-commerce. The model is based on knowing where a customer is via the GPS in her or his cell phone. ... Social commerce definition and evolution. Social commerce (SC) refers to conducting EC in the social media environment. It can be ...

  23. Social Shopping: Concepts, Benefits, and Models

    Shopping can be viewed as a social activity. Social shopping (also known as S ales 2.0) is online shopping with social media tools and platforms and sharing shopping experiences with friends. It is a growing activity in social commerce. Social commerce blends e-commerce and social media.

  24. 9 Startups Bringing Social Commerce Into the Mainstream in the US

    9 innovative startups bringing social shopping into the mainstream in the US. Orca cofounders Max Benator and Lauren Stevens. Social shopping is on the rise in the US, as big tech and upstarts ...

  25. Opinion: The problem with DoorDash's warning about tips

    To me, it says the company endorses the bidding model. If you want a bowl of ramen delivered to your home, after agreeing to the price, taxes and delivery fee, you've got to put in an offer ...

  26. Top E-Commerce Trends 2023

    The current e-commerce landscape. The global pandemic accelerated the shift from physical retail to e-commerce. According to Forbes 1, in 2023, 20.8% of global retail purchases are expected to take place online.. Competition within the e-commerce sector has never been fiercer, so, to stay ahead, business owners need to be aware of the latest trends in e-commerce and integrate those that are ...