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Retail’s Evolution: The Death of Retail Commerce and Rise of Social Commerce

Rise of Social Commerce

In the wake of shifting consumer behaviors, the retail industry has undergone a seismic shift in recent years. Traditional brick-and-mortar stores, long-standing symbols of commerce, face an existential threat. Consumers have gravitated toward the ease and accessibility of online shopping, diverting foot traffic away from traditional physical stores. Changing consumer preferences, e-commerce goliaths like Amazon, and the global COVID-19 pandemic have all fueled what some are calling the “retail apocalypse.” However, a new and exciting phenomenon emerges from the ashes of the old retail model and the evolution of traditional e-commerce: social commerce.

This innovative commerce approach integrates the e-commerce convenience of buying and selling online with the global reach and peer influence of social media, fundamentally altering how consumers discover and engage with brands, and make purchase decisions. Platforms like Instagram, Facebook, TikTok, and Pinterest have rolled out features that seamlessly integrate shopping features such as in-app shopping, live selling, and shoppable posts. Instead of needing to visit a retailer’s website (traditional e-commerce), consumers can complete their purchase directly in a social media app and continue scrolling through their feeds. This, in essence, blurs the lines between social interaction and commercial transactions.

Social Commerce vs. Retail Stores 

What distinguishes social commerce from retail commerce, and what makes these features so impactful? Brick-and-mortar retail cannot harness user data and preferences in real-time, tailor product recommendations, or offer interactive content to provide a more engaging shopping journey. In comparison, social commerce capitalizes on the power of influencer recommendations, consumer-generated content, and interactive experiences to drive sales. This method of creating personalized and immersive shopping experiences differs from traditional retail by far.

Even when compared to the traditional e-commerce experience, social commerce fosters a more established sense of trust. Consumers can follow influencer or non-influencer endorsements and reviews and hold their opinions valuable. The easiest part? Consumers can add items to their carts without leaving the social media app, so placing an order is seamless.

Social commerce follows sub-trends, which are based on social searches. Instead of Googling reviews of a particular product or searching for a new pair of jeans, consumers are opting to search within social media apps like TikTok in hopes of finding a review from someone they can relate to or an influencer they trust. Brands should strongly consider partnering with influencers so their products are frequently featured in the results. This approach to social media marketing is a great way to boost discovery-based e-commerce.

Social Commerce’s Marketing Advantages

With enhanced targeting and retargeting capabilities offered through social media and marketing platforms, finding the right consumer at the right time is easier than ever. Brands can personalize product recommendations that fit a consumer’s needs and cater marketing communications to the shopping patterns they’ve demonstrated in the past. Retargeting reminds consumers about the products they’ve shown interest in online and encourages them to take action.

Another great thing about social media is user-generated content (UGC) — content created by consumers who are eager to share their experiences with products or services. UGC creates a community for consumers to share opinions, stories, and advice about products or services, creating a stronger bond between brands and consumers. Brands can leverage UGC in several ways to enhance authenticity and credibility.

UGC can be repurposed as testimonials or product showcases across all marketing channels, including websites and advertisements. Using UGC as an advertisement not only saves time and money on content development, but it provides a human-centric experience making it more relatable for consumers. UGC showcases genuine consumer opinions and experiences that encourage connection and trust, proving it to be a reliable and engaging form of brand-sponsored content. And if your product sells out because of someone’s viral video, it doesn’t hurt to send a thank-you gift to continue building that customer relationship.

Acknowledging UGC by responding to consumers’ posts or featuring their content on the brand’s platforms encourages further interaction and incentivizes users to continue sharing their experiences. Strategically using UGC can benefit brands by establishing relationships with influencers and consumers, creating personalized experiences, and boosting sales directly within the social media app.

Consumers also want to support and purchase from companies that align with their values.

However, expressing a brand’s story and mission through a traditional retail experience can be challenging. Using social media, brands can get personal about their values in various ways, like a CEO explaining why they started their company, sharing behind-the-scenes content, or simply engaging and answering consumers’ questions in the comments. Targeting and retargeting consumers whose values match closely is streamlined through social media advertising.

Strategizing for 2024

Brands can’t afford to overlook the popularity and growth of social commerce. Accenture predicts social commerce will grow three times as fast as traditional e-commerce, more than doubling from $492 billion worldwide in 2021 to $1.2 trillion in 2025. It’s critical for brands to invest in an authentic, strategic social media presence that raises brand visibility, engages users, and makes it easy to complete a purchase. This is not to say brands should abandon retail commerce altogether, but social commerce is proving to be a disruptive force and should be top of mind for brands’ commerce strategies.

Vibhor KapoorAbout the Author:

Vibhor Kapoor is the President of AdRoll, a marketing and advertising platform for Direct to Consumer brands. Vibhor’s charter at AdRoll includes driving AdRoll’s revenue growth, overseeing product, strategy, sales, operations, and marketing.

With almost three decades of industry experience, Vibhor brings business leadership expertise in SaaS and Cloud platforms. Most recently, he was a Senior Director in Adobe’s Digital Media Business, where he led marketing and GTM efforts to incubate new categories in experience design and developer platforms. Before joining Adobe, Kapoor was a Vice President of Marketing at Box, leading product marketing, evangelism and demand generation for their API platform. He also spent a decade at Microsoft in leadership roles across marketing and product management and was an early member of the team that built Microsoft’s Azure business. Earlier in his career, Vibhor spent several years at General Electric and Hewlett Packard in product management, sales and commercial operations.

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