Shopify Pushes Further Into Social Channels, As The Hunt For Online Customers Intensifies

The first era of online shopping was independent merchants setting up their own sites. And the second era simply belonged to Amazon.

But now we’re in a third era, which could be known as the social commerce age.  Put differently: the age of Shopify.

The ecommerce tech company announced an integration with TikTok on Tuesday, the latest in a roster of social platform partners that includes Facebook, Google’s portfolio of apps and sites, Snapchat, Pinterest and more.

“We’re doubling down on driving the new era of social commerce,” said Amir Kabbara, Shopify’s director of product for Channels (the Shopify term for third-party platform partners).

Shopify doesn’t charge for the Channel integrations, nor does it take a cut of media. Shopify is the payment processor though, so it retains a small percent of purchases. And the deal works for the social platforms because retailers and merchants bring new ad dollars to the table.

Social channels are the fastest growing source of sales and marketing for Shopify merchants, Kabbara said. Merchant installs (a seller setting up a Facebook or TikTok storefront, say, or onboarding with the Google Merchant Center) increased by 76% in the US this year. Sales on those social channels are up 270%.

Plugging into social media can collapse the shopper funnel for merchants. For one thing, they don’t need to send traffic from Facebook, Twitter or YouTube to their own sites to make a sale. More than half of consumers between the ages of 18 and 34 discover products on social media, Kabbara said. And 28% have purchased from social media. Both those numbers are moving up.

Merchants previously approached social media as a vehicle to engage with customers and create a community of fans, he said. “Now merchants are embracing not just the connection, but are also there for the commerce.”

The Channel integrations also improve advertising and marketing. Instead of scouring the web for potential new customers, there’s a very natural dynamic on social media where one new customer leads to further sales, because the brand’s page might be displayed or recommended to their close friends.

Shopify also has an analytics hub that operates across its Channel partners, so they can see where traffic and sales are coming from, Kabbara said.
A merchant can link an existing customer’s email address to the same individual making a sale on walled gardens like Facebook or YouTube. The seller needs to have already acquired that identity data with consent to use it for advertising to match it to a sale coming from social channels. Previously, it was impossible for sellers to build their own customer data based on user engagements from behind a walled garden, except through the platform’s own black box system. For example, customer that purchased on Facebook could be retargeted using Facebook’s ad platform. Now, if Shopify can connect the credit card or identity like email address to the sale, the merchant can use its own email remarketing or advertising to retarget that customer.

“Something that’s true of the largest retailers and small independent merchants right now, is the effort going on to meet customers where they are online,” Kabbara said. “And for the commerce to happen there.”

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