Do We Still Believe Social Commerce Is The Key To Unlocking Customer Loyalty?

Do We Still Believe Social Commerce Is The Key To Unlocking Customer Loyalty?

NPD: More Than Half Of Facebook And Instagram Users Purchased Products While Scrolling Their Social Media
NPD: More Than Half Of Facebook And Instagram Users Purchased Products While Scrolling Their Social Media
Romana Hai

Romana Hai

Romana Hai

Romana Hai

In the past three years, social commerce has increasingly been seen as the key to unlocking customer loyalty. It has become the bandwagon that every brand and retailer needs to hop on. This has become especially true over the course of the last year.

Since the rise of the pandemic, consumers have not only found themselves spending more time at home, but they have been utilizing their idle time shopping online and on social media for all their retail needs. Brands and retailers everywhere have thus looked to bring their offerings to where their customers spend most of their time, leveraging tools that enable product discovery and checkout conversion. New research indicates that these efforts are paying off.

According to research conducted by The NPD Group, which surveyed 2,022 respondents, 41 percent of consumers learn about or discover fashion brands and retailers through Facebook, while 35 percent look to Instagram for their discovery and 21 percent turn to Pinterest. When it comes to making actual purchases, more than half (51 percent) say that Facebook and Instagram content has resulted in actual purchases.

“The pandemic accelerated the ongoing retail shift from brick-and-mortar stores to online purchasing years into the future,” said Maria Rugolo, apparel industry analyst for NPD.

“As these platforms make purchasing even easier, with one-click shopping and the ability to buy instantly, social media will continue to gain more impulse-purchase attention.”

The rise of social commerce is not only proving to be a tactic for driving conversion, but it is also giving rise to two other trends: impulsive purchasing behaviors and buyer’s remorse. That is especially true for consumers that make unplanned purchases and Gen Z — a rising consumer segment that is fast reshaping how brands and retailers market their products.

Impulsive Purchasing And Buyer’s Remorse

According to NPD, 12 percent of consumers between the ages of 13 and 24 (Gen Z) have made impulsive purchases on social media, while 17 percent are not opposed to making such purchases in the future. Six percent, however, said they would not be purchasing fashion products through social media platforms again, perhaps due to buyer’s remorse.

When it comes to buyer’s remorse, unfortunately, social commerce apps such as Facebook and Instagram today side with brands and retailers that market their products on their platform, protecting them from requests for returns and refunds through their policies.

Instagram Purchase Protection Policy
Source: Instagram Customer’s Purchase Protection Policy

The move to protect sellers on their platforms from consumers regretting their purchasing decisions not only provides a safety net but ultimately encourages brands and retailers to utilize social media apps to make additional sales, especially as features such as live streaming takes off. But at what cost?

An Opportunity For Brands And Retailers…And Tech

As more consumers engage in social shopping experiences, brands, retailers and even retail tech providers are looking to invest heavily in social commerce strategies, creating innovative ways to refine the experience and encourage sales conversions – whether they are impulsive or not.

Sephora doubled down on its social commerce strategy by launching its Instagram shop this month, betting that it would pick up in the U.S. The move enables its more than 20 million followers on Instagram to find and buy beauty products directly through the app, without having to switch over to the retailer’s site.

“Every indication is that it’s going to be big,” said Carolyn Bojanowski, Sephora’s general manager of eCommerce. “[There’s] got to be a mindset shift, though, and that’s where we are right now.”

The move to go big on social commerce in the U.S. stems from the success brands like Sephora are seeing in China, where the market is expected to soon exceed $300 billion in annual sales.

And just last week, beauty tech provider, Perfect Corp. announced its partnership with Facebook to expand augmented reality (AR) virtual beauty try-on and shopping experiences across Instagram and Facebook, to make the shopping experiences much more engaging for consumers across both platforms.

“There’s no denying the impact that social media platforms like Instagram continue to play in the consumer discovery and shopping journey. This integration underlines the importance of a streamlined beauty shopping experience with interactive AR beauty tech proven to drive conversion and enhance the overall consumer experience,” said Alice Chang, Perfect Corp. Founder and CEO.

Such integrations that put consumers at the center of the shopping experience boost confidence in purchases by enabling shoppers to try before they buy.

Another strategy that can help brands boost their conversion and shoppers’ confidence is social media retargeting. This strategy is particularly effective when a time-sensitive offer is being marketed through a social media ad.

Consumer Purchasing Validation Lies Within User Generated/Social Media Content

According to a Bazaarvoice survey of more than 6,000 consumers and 11,500 brands, 42 percent of consumers revealed that they would not purchase from a traditional eCommerce site unless user-generated content is available on the product page.

Furthermore, 49 percent of shoppers revealed that they looked for customer photos on the product page, followed by other websites where the product was sold (47 percent) as well as search engines (35 percent). 

While the Bazaarvoice data points to how brands can improve on their eCommerce shopping experience, the need for validation from user-generated content/reviews and customer photos are noteworthy. It is also a strategy that is applicable on social platforms, where brands can showcase user-generated content. This can help them keep the customer on their product page while addressing all their needs and wants to further validate their impulsive or not so impulsive purchasing decisions.

Is Social Commerce Fueling Impulse Purchasing Decisions And Buyers Remorse? Or Customer Loyalty?

As powerful as product discovery and retargeting ads can be, there will always be an element of impulsivity and buyer’s remorse in the purchases consumers make on social media apps.

Additionally, as Gen Z consumers — a generation that shows a high level of engagement with social shopping experiences — gain significance and come to represent a higher share of consumer spend, brands (and social media apps) will need to reassess their approach to offering more flexibility when it comes to returns and refunds. That is going to be key to winning their long-term loyalty.

After all, customer loyalty ultimately relies on not only the product offering itself but also the service and experience that is built around it.

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