5 Ways for Retailers to Grow Revenue from Social Commerce

Corbin de Rubertis

"The Sell Sider" is a column written by the sell side of the digital media community.

Today's column is written by Corbin de Rubertis, head of innovation at Meredith.

The pandemic accelerated many consumer trends that were already in motion, including the collapse of the traditional funnel and the proliferation of ecommerce experiences in mobile apps, interactive display units and social networks.

In particular, social commerce – ecommerce that’s initiated and sometimes also transacted on a social platform – exploded during the pandemic. Emarketer reported that 36% of US adults had made a social commerce purchase in their lifetimes as of last summer, compared to only 24% before the pandemic. And mainstream retailers are embracing social commerce in new, innovative ways. Walmart, for example, has tested live-stream shopping and other integrations with TikTok, while Shopify recently launched a new partnership with Pinterest to let merchants make their products shoppable within the platform.

Two years ago, social commerce was largely associated with well-targeted, shoppable ads for clothing and accessories, enticing people to a retailer's website from their Instagram feeds. But the category has grown beyond its fashion origins to encompass home improvement, gardening, DIY and QSR.

More than a third of the US population has now bought something they discovered on a social network, and we can expect social commerce to continue its rapid rise now that more people have had a taste of the convenience of buying online. As with so many other areas of technology, there’s an advantage to being an early adopter. Retailers that test integrations with the major social platforms now will have a lead on their competitors, finding shoppers where they naturally spend time online.

As more and more verticals embrace social commerce, a new playbook is emerging. Here are five areas to focus on:

1. Prioritize hyperlocal relevance. Shoppable ads for seeds and planting tools are bound to be useful to gardeners in some parts of the US starting in April — but much less so in regions where overnight temperatures are still consistently below freezing. This is just one example of how retailers can waste impressions by not taking local conditions into account.

To leverage local conditions, some retailers are using an increasing number of signals to optimize their creative messaging, such as pollen counts, weather forecasts and COVID infection rates. For example, Kroger recently made great use of dynamic predictive advertising to feature products and their associated real-time pricing for local stores, while SCJ Raid Essentials drew on local insect and pest search trends to dynamically select which products and messaging to show to each set of consumers.

2. Connect to your back-end inventory system. There’s nothing more frustrating for a consumer than clicking the “buy” button only to discover that an item is out of stock. Back-end data sharing can enable a more seamless click-to-cart experience — and help ensure that people aren’t alienated because of a bad first impression.

3. Expand the sale. The pandemic caused many consumers to consolidate their purchases, buying a larger volume of what they need from fewer retailers. Smart retailers are jumping on this trend by using data and AI to suggest additional products for each shopper’s cart. For example, retailers like Walmart have introduced planning tools like “Make it a Meal,” which let customers seamlessly purchase all the ingredients required for specific meals. Others have recommendation engines that can suggest pants or accessories to pair with a top.

4. Connect to content experience. Social commerce doesn’t exist in a vacuum, and retailers need to ensure that they have an integrated strategy. Walmart knocked this out of the park with its Plus-Up campaign, which tied commerce moments like Halloween to pop-up virtual concerts, IRL experiences and more. Smart retailers are tapping into the social zeitgeist to connect these trending topics with bundles for sales.

5. Build direct customer relationships. As brands prepare for a world without third-party cookies, they should be thinking about social commerce as a way to collect first-party data in order to build deeper relationships with customers. This is especially important for CPG brands that are usually sold in-store, since traffic to their own websites is minimal and they often don’t have loyalty data of their own. Developing interactive social commerce experiences can help them to enrich customer profiles and adapt to the future of targeting and measurement.

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