The ultimate guide to social commerce

Ana Andjelic
Jul 18 · 4 min read

A version of this article originally appeared on July 15th, 2019 edition of 2pm

Where, how, and what we buy is constantly changing. A scenario where we turn to Amazon Alexa to order “a dress that Emma Hill wore on her Instagram post from Wednesday” may now be less far-fetched than buying that same dress, directly on Instagram, from Emma Hill herself.

Powered by Instagram Checkout feature, social commerce means buying from people we follow, rather than going to actual stores and brand websites. Quite an oxymoron, social commerce represents the ultimate merger of money and influence, economy and culture, self-monetization and self-promotion. It turns consumption into creativity, and blurs the boundary between buying things and making things. It promises to create economic value while simultaneously making us feel socially valuable.

Instagram Checkout is part of a larger shift of the US social networks towards e-commerce. Chinese superapps, like Little Red Book and WeChat’s Good Product Circle have already turned Chinese collective review power into an integral part of their shopping experience. And, with the US platforms’ ad models being under attack from regulators, adding social commerce capabilities is just a smart hedging strategy.

Retail tacticians are quick to celebrate all the wonderful things that the ultimate merger of inspiration and conversion will do to create an oft-missing link between performance and brand marketing and between awareness and sales.

Exciting as it may be, this tactical approach fails to see that social shopping means that platforms will bestow the same fate on retailers as they did on publishers. The platforms successfully monetized our attention. They are about to commercialize our social attachments. This will increase their power as gatekeepers, paralleled only by the regulatory confusion as to who pays the sales tax when we buy a product from an Instagram influencer.

Strategically, consequences of social commerce for branding, marketing, retailing, and socializing are as profound as they are unexplored.

Products > Brands

Social commerce emphasizes individual taste and styling savvy over brands: we are buying someone’s look, not a particular brand within it. Marketing and promotional machinery will move towards wide product seeding across social shopping communities, monitoring the emerging best-sellers, and amplifying the best performing product styling. This monitor-and-optimize, product-centric model is the opposite of brand-centric communication; it is also the opposite of the current influencer marketing model. In the social commerce context, products make influencers, not the other way around. Because this social dynamic varies per product and per its styling, permutations are as many as they are random and unpredictable. Social commerce gives a quick rise to new trends as much as it helps trends spread.

Taste Bubbles

Instagram has recently been lauded as our “own personalized digital mall,” ideally, the only one we’d ever need. What a scary thought. Rise and dangers of content bubbles have already been copiously documented: across platforms, we repeatedly and increasingly see content that we already like, creating biases that can quickly scale. Now imagine a taste bubble, where we’re served only things and styles and tastes that we liked in the past. A Google image search of the term “futuristic” shows what that may look like.

Longer Product Lifecycles

If e-commerce took away the need to go to a physical store to browse, try on and buy clothes, social commerce removes the need to permanently own them. The total resale market is expected to double in value to $51 billion in the next five years, according to a report from ThredUp. Traditional retail operates on product newness and seasonality. In contrast, social commerce extends product lifecycle nearly indefinitely, as the same product can be resold and prosperously revived in many different styling iterations.

Great Retail Acceleration

On the social shopping app Depop, many popular looks are created not by influencers, but by “ordinary” people doing creative things with their clothes. Having many taste curators inevitably results in quicker trend cycles. People get bored and move onto the next look. Compressed zeitgeist, combined with extended product life, impacts impacts retailers’ operations, production, distribution, and merchandising strategy — all of which will have to become quick to respond to real-time, social data recording the ebbs and flows of our collective taste.

Everyone is DTC

Today’s trends are made by neither brands nor media. Social commerce puts this democratization of trend-making on steroids, as anything can be sold everywhere, by anyone, and to anyone. Social commerce is the most direct and immediate form of relationship between people and products, and it begets the question: if people now cultivate their own personalities in order to sell products and build a community, brands need to figure out what it is that they are doing. Originally created by companies to give selling a face and a human emotion, retailers are getting killed by their own customers. People are increasingly more likely to build their own brand — and develop their own products, services, and experiences — than to endorse or be sponsored by someone else’s.

Social commerce will turn us all into shoppable product demos, and our life into a catalogue of stylized products. It will also introduce new revenue streams, business models, marketing strategies, and regulatory hurdles, reversing a short-sighted belief that “the Internet lets you buy, but it doesn’t let you shop.” Social currency is the fuel of modern retail economy. Community is its killer app.

Ana Andjelic

Written by

Strategy Executive. Doctor of Sociology. Forbes CMO Next.

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