Revealing the Value of Social Commerce for Brands and Marketers

Social commerce refers to those online activities that facilitate transactions According to Glen Conybeare Global President Reprise Commerce a quotpostpandemic new normalquot has fueled greater participation in social commerce so much so that it can now account for as much as 20 of sales more for some onlineonly brands quotBrands are realizing that a significant doubledigit percentage of their sales are likely to be through ecommerce channelsquot he said quotThat makes their life more complicated because while most brands are adept at selling through physical retail having honed their approach over many years to maximize sales their ecommerce knowledge and capability is still nascentquot This poses a challenge to some retailers who are still grappling with how to best structure their online offerings to maximize sales and even more crucially profitabilityFor Kara Manatt Executive Vice President Intelligence Solutions at MAGNA the study addresses what retailers must do to meet the needs of consumers quotWhat do consumers really want and need and what is their experience like on social media We wanted to tap into what is currently happening with consumers on social media and how this may look in the futurequot she explainedThis global study of 8000 respondents spanned four countries the US the UK Germany and Saudi Arabia and is the first of its kind for MAGNA It revealed the following insightsSocial media is vitally important to consumers in making purchasing decisions Manatt noted that she was surprised at quothow many people use social media to make purchases and use it as a tool to discover products There39s a really strong foundation of people using social media in that way across all the markets especially Saudi ArabiaquotAR and VR are emerging as two of the most important centerpieces in social commerce For Conybeare they enable consumers to better curate their purchases and reduce returns that increase costs to retailers quotConsumers don39t want to buy twelve items and send ten backquot he asserted quotIt39s a hassle They want to order something that works for them and not have to send anything back AR and VR technology help with thatquotThere is an enthusiasm for these new technologies quotPeople are really excited and leaning in to try new technologiesquot Manatt explained quotFor example they use AR to try on clothes Brands need to make sure that they39re meeting consumers where they are and taking advantage of those observations and behaviors that already existquotThere is a great deal of disconnect in the current consumer path to purchase quotIt39s about reducing the friction in the journeyquot Conybeare said quotWe think ecommerce is easy but actually from a consumer39s point of view it39s full of friction It39s a lot easier to walk into a physical store try on a pair of jeans buy the pair of jeans In addition return rates for physical commerce are low quot Conversely he noted quotWhen you buy a pair of jeans online you39ll probably buy two Maybe one fits Maybe none fit It39s the same with style Technology can help reduce this friction in the online consumer journey That39s why we39ve seen such a positive reaction to AR and VR in the studyquotThe consumer appetite for new technology spans all age groups quotIt39s not a generational thingquot Manatt noted quotWhile younger people lead the charge it39s not just Gen Z who realize that using social media as a tool for shopping is going to help alleviate some of that friction It39s all agesquotProfitability drives retailer decisions and new technology helps quotEcommerce is not as profitable as physical retail for the vast majority of retailersquot Conybeare stated Generous return policies eat into profitability quotIf implementing AR or VR technology on your site means your returns go from 30 to 20 that pays off very quicklyquot he explained quotIncreasingly retailers are realizing that they can39t continue to offer amazing customer service with free returns and free delivery or if they do they39ll need to find a way to improve profitability as their shareholders will not stand for itquotFor brands and advertisers the road to profitability lies in AR and VR quotThis study shows that consumers really want itquot he continued quotIf brands and marketers were thinking 39It39s not going to move the needle It39s not required We39re selling our products today without it39 that may be true But you have to ask yourself what are you potentially missing out on Changing your onsite conversion rate from 3 to 35 is the equivalent of spending millions on media It39s huge And it39s just one way of reducing friction for online customersquotAll this emphasis on social commerce begs the question What happens to brick and mortar quotThere39s got to be a place for physical retail We39d be in a very sad lonely world if there weren39tquot Conybeare concluded quotPhysical retail just needs to reinvent itself and part of that is bringing back more entertainment to shopping In short make it funquotClick the social buttons to share this story with colleagues and friendsThe opinions expressed here are the author39s views and do not necessarily represent the views of MediaVillagecomMyersBizNet

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Revealing the Value of Social Commerce for Brands and Marketers

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Charlene Weisler

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