What is Social Commerce and How It Works?

Social commerce is the new buzzword in the business fraternity after the meteoric rise of social media marketing. A vast majority of people, 81.9% of the total population, use social media in Canada. With 31.9 million active users, these channels enjoy high traffic volumes, making them the perfect advertising and marketing platform. While most businesses use these channels to promote their brands and maintain their online reputation, some have started leveraging them for selling products and services.

So, instead of diverting traffic to the website’s landing page, the transaction takes place on social media. The evolving nature of online shopping has materialised successfully because of the increased popularity of social networking platforms like Facebook, TikTok, Instagram, etc. Canada has an outstanding potential for this type of selling because of the high penetration of the internet and smartphones. Let us help you understand social commerce and its work mechanism in detail. It is necessary to adopt this selling opportunity to increase reach and revenue effectively.

1. Understanding Social Commerce

Social commerce is the process of identifying and buying products on social media platforms without leaving the app. Users can browse similar products and read reviews without going to the landing page of the brand’s website. They complete the entire transaction within the social network. It reduces the customer’s time spent toggling between screens and increases the rate of sales for businesses. The social commerce market size is expected to reach USD 11 billion by 2028.

It is easier for businesses to attract and persuade potential customers on social media because it is highly targeted. Customers finding products they like in their feed increases the probability of purchasing. It involves direct selling and increasing engagement with buyers. Prospective customers can find these product recommendations in their feeds, posts or social ads.

2. How Does Social Commerce Work?

Most social media channels have an inbuilt social commerce capability that allows businesses to sell their products directly to customers. The four popular networks that offer this feature include Facebook, TikTok, Instagram, and Pinterest. One advantage of using these platforms for sales and marketing is that many customers search for products on these channels instead of going to the search engines. The in-app shopping feature helps businesses create a virtual storefront like a Facebook Shop.

Customers can browse the product catalogue and use Facebook Checkout to make the purchase. New entrepreneurs entering the industry after acquiring a business for sale Canada must ensure they understand the social commerce work mechanism and how to leverage it. They must be aware of updates like asking questions, tracking orders, and purchasing through Instagram DMs.

3. Difference Between Social and E-Commerce

E-commerce requires a business website with product catalogues, shopping carts and payment gateways to sell and market products. Customers either search for the products on search engines to reach these sites or find them through online ads. On the other hand, social commerce is different because it does not require a business website.

Small businesses can advertise and sell on social media channels through in-app purchases. Thus, it is cheaper than developing and maintaining an e-commerce website. Since social commerce does not redirect customers to another site, it offers more comfort and generates social proof through the creation of user-generated content.

4. Why Use Social Commerce?

With more than 80% of Canadians using social media, it is essential for businesses to use social commerce and widen their reach. It is highly beneficial for local brands that want to get recognised. Precise targeting ensures they are discovered by potential customers. Social commerce also reduces the effort that goes into switching between sites and increases the speed of transactions.

Most customers using social commerce are happy to post reviews about their purchases. These act as proof of credibility and help build a solid customer base. In addition, budding entrepreneurs who acquire businesses for sale in Canada can use the data gathered from these channels to understand their buyers and their buying habits effectively.

5. How to Build a Social Commerce Strategy?

Small businesses must have a social commerce strategy that involves choosing the right channels for selling products based on their target audience’s choices. The marketing team must create high-quality and valuable content to be posted on the channels to attract buyers and gain credibility. They can use social media ads and partner with social media influencers in their field to gain traction.

Another easy way to influence the target audience is to offer discounts and free samples, use live streaming for promotions and engaging with customers through direct messages. In addition, the checkout process must be hassle-free and quick to make them enjoy social commerce and come back for a comfortable experience. The support team must follow up with customers to provide the required service and gather feedback for improvement.

6. Downsides of Social Commerce

Social commerce is gaining momentum because of its ease of transaction. However, it has some downsides that can affect its popularity. The most common issue is that businesses do not get traffic on their websites because the purchase is completed within the app. Also, it can take a long time to convince buyers through consistent social media interactions and content creation.

Budding entrepreneurs looking for a business for sale in Canada must understand that they will have to run social media ads to get conversions. Most buyers respond to these marketing messages. They must also be careful about service and ensure customers do not leave negative comments that can significantly impact social commerce.

7. Monitoring Social Media Transactions

Business owners should track and measure social commerce numbers to understand their performance. Otherwise they will be spending money without any clarity of its purpose. They must determine the cost involved in acquiring new customers through social media ads and influencer partnerships. It is not worth the investment if the cost is too high and the sales are too low.

They should also compare the brand’s popularity on social networks to sales generated through these channels. This helps evaluate how much engagement is generating conversions and loyalty and allows business owners to improve their strategy.

Wrapping Up

Social commerce in Canada is expanding and will become a prominent selling method in future. Businesses can take advantage of this platform to gain a wider customer base and boost revenue. The information shared above can help them prepare for this offering effectively.