Social Commerce: Definition & How it Works

What is Social Commerce?

Social commerce is a feature that enables merchants to showcase and sell their products directly through social media channels.

How it Works?

Merchants are able to create or connect their product catalogues to their social media business profile, and insert those products in different social media posts or sponsored ads, by tagging them.

The audience, who can see the product in action in the post, can then click the link and know more about the product features and prices, and can complete the transaction right on the social media platform or on the merchant’s website.

What is The Main Idea of Social Commerce?

The main idea of social commerce is facilitating the discovery of products through social media and removing the friction from the buying process; thereby helping merchants convert more customers.

How Customer Shop?

Customers go through different phases during their buying journey, and social media intercepts them through those phases and plays a big role in their final buying decision.

For example, a customer could recognize a need for a certain product after watching someone they follow using it or talking about how this product made their life easier.

Then this customer decides he/she wants to know more about this solution, and starts the next phase of information search. During information search many buyers use social media to gather information, such as watching Youtube videos to know more about the features or see someone else experiencing this product.

Then, after deciding that they really want to buy, they start comparing alternatives for the same product. For example, now they want to decide whether they should buy Brand A or Brand B for the same product. Here, also, social media plays a role, as buyers usually go for brands recommended by people they trust or follow.

The main idea is: since a big part of the customer journey is already taking place on social media, implementing a process that removes the friction and takes the customer directly to a shopping cart is supposed to improve conversion and, consequently, sales.

Social Commerce Vs. Ecommerce

Social commerce is part of ecommerce and not vice versa.

If a customer buys a product directly on a website, without social media involvement, this is ecommerce or online retail. If, on the other hand, the customer discovers the product and interacts with it via social media, and then completes the transaction on the website or in-app, this is social commerce. Since the social commerce process is still an online shopping transaction, it is considered ecommerce.

Social Commerce Examples

Social commerce examples include Facebook & Instagram Shops, TikTok Shop and Youtube BrandConnect. Pinterest has also partnered with Shopify to create shoppable Product Pins.

Choosing which social media platform to use for your social commerce store depends on your product category, and where you believe your target customer goes to find inspiration or information about products during their buying journey.