Is Social The New Storefront?

Hands using mobile payments, Digital marketing. Banking network. Online shopping and icon customer networking connection on virtual screen, Business technology concept
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With platforms like Instagram and Snapchat attracting millions of daily users, it was only a matter of time before ecommerce solutions were added. In this guest post, Worldpay Merchant Solutions FIS general manager for APAC Phil Pomford discusses the rise of social commerce.

Brands, eCommerce merchants and social media platforms alike have long recognised the potential for social media to emerge as a dynamic sales channel, with its highly visual, convenient and strongly social nature. As people are forced inside during lockdown and social media holds an increasingly captive and engaged audience, the use of social commerce is accelerating too.

The Worldpay from FIS Global Payments Report reveals that Australia has one of the highest smartphone penetrations in the world. With mobile use projected at 84 per cent of the population and internet penetration at 90 per cent, Australia is a leader in eCommerce – tenth largest by revenue, with digital and mobile wallet use continuing to gain market share. This is largely due to the increasingly frictionless mobile-first experience they offer, and the increased popularity of social media as an alternative shopping platform. It has been reported that people are spending 20 per cent more time on social media apps as a result of the global lockdown.

Fast, simple, secure payment methods are essential for ensuring social media interactions convert to sales. Reducing the gap between discovery and conversion requires an uninterrupted ‘digital last mile’. In order to thrive, the payments on social media must minimise friction by enabling a wide variety of payment options such as digital wallets, coupled with a mobile-optimised checkout and even flexible financing options for consumers who want to pay for their purchases in instalments. We also know that reducing friction makes shopping easier for consumers, delivers higher conversion rates for brands, and can cement social media platforms as an increasingly effective sales channel.

China is leading the way in social commerce, fueled by Chinese consumers’ overwhelming preference to browse the internet via smartphones. Having largely leapfrogged the desktop era, Chinese internet users gravitate to social sharing features of ‘Super Apps’ on their smartphones. According to the Worldpay from FIS Global Payments Report, WeChat has over one billion registered users in China alone.

‘Super Apps’ like WeChat consolidate multiple app functions into the one platform, so users can do everything from booking flights and hotels to socialising with friends, without ever needing to leave the app. Social shopping is also already popular with Australian consumers. According to the Worldpay from FIS Global Payments Report, eighty-one percent of Australians made a purchase through social media in 2018, with Facebook the most popular platform. Consumers who engage with businesses through the Messenger app can now purchase goods from within the chat function, all at the touch (or tap) of a button.

In 2019, Instagram enabled their ‘Checkout on Instagram’ function which allows consumers to shop products through a story or a post, without ever leaving the app. Snapchat now offers similar functionality: ‘Shop and Cop’ lets users browse and buy from any brand entirely within the Snapchat mobile app.

More recently, social media phenomenon TikTok is enjoying in-app revenue growth in India by allowing users to buy TikTok coins which are then used to purchase digital gifts for other users. The video sharing platform grossed $75 million from the sale of virtual currency. This figure is only set to grow as it increases in popularity.

As the world increasingly relies on technology to survive, the strong social and emotional components of shopping have new meaning. Social media has enabled brands to reinvent the context in which consumer emotions are stimulated. In the current climate of social distancing, social media allows products to be presented in lifestyle experiences that often create that perfect place for us all to find the right things, at the right time.

 

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