Creating Brand Value for Social Commerce
As e-commerce plays an increasing role in how people make purchases, communication in the digital space becomes ever more paramount. Research shows that once someone experiences buying a packaged good online, they’ll continue doing so.
Here in Japan, 31.6% of consumers said they increased e-commerce use between March and May 2020, and 55.6% feel that they will continue doing so going forward.
As direct-to-consumer brands become the standard for shoppers, businesses face the urgent need to fine-tune the communications that incentivize those conversions. I’ll discuss social media realities and how brands can approach value creation there.
Commerce and communication have merged.
Entire customer journeys to purchase are happening within the smartphone. Social networks have been thought of as purely communication channels but are increasingly being used to sell directly.
Facebook Shops and Instagram Shops link with e-commerce platforms like Shopify, BigCommerce and others. In Japan, they also work with the popular Stores.jp and Base. Social networks like TikTok, Snapchat and LINE have also dabbled in the e-commerce space.
Purchases made completely within social networks will eventually become a new norm, and forcing someone to visit a website, app, or store to make a purchase will act as barriers, especially as more competitors stop requiring people to do so.
Getting social media right is now a do-or-die situation, but many struggle with the fundamentals.
Big challenges for businesses: Categorization, Depth vs. Width, and Supply & Demand
The challenge of categorization
Most businesses have an advertiser relationship with media, and treat social media the same way.
Social media fundamentally changed the advertiser-publisher-consumer dynamic.
Any individual can post social media which means more content from more publishers than ever is being put out and consumed. This means more fragmented attention, making it harder for single ads to have the impact they used to in the pre-social media era.
Because people intend to consume content when they use social networks and are accustomed to the accounts they follow putting out interesting content, businesses should actually be categorizing themselves as publishers on social media.
The challenge of depth vs. width
Many want fans and a huge audience, but in reality, only a few successfully accomplish both equally.
Generally speaking, prioritizing reaching a large audience comes at the expense of creating relationship depth with a specific target, and vice versa. Most brands will find themselves on either side of the light blue line in the chart below to varying degrees.
Because major social media channels are mature with a lot of competition, the current trend is to lean towards the side of depth, focusing on micro-communities. This leads to the next challenge.
The challenge of supply & demand
Social networks are like stocks or real estate in the sense that investing in it early can help produce bigger results.
As a platform grows so does competition. This means standing out and providing unique value to users becomes more difficult. More resources - whether it’s in strategy, creative or production - are often required because you’re competing against similar brands that have similar products that put out similar content. There’s also more advertiser money being put in.
We can see supply and demand issues come into play when social media marketing tactics produce lackluster results.
Pretty pictures have become expected, influencers featuring products in their posts are now an everyday thing. Giveaway campaigns request user actions such as follows for a 0.001% chance of winning something from a brand they don’t have a relationship with and for a product not in purchase consideration.
We know people follow, become fans and consider purchasing because they’re being provided value of some sort. So how can value be provided on social media now that communication and commerce have merged?
Provide experiences on social that are more human.
Social commerce is about straying away from a transactions-based approach and providing people with more “human” experiences online. It’s more marketing and storytelling than advertising and clicks.
In a market where barriers to entry have decreased and commoditization is rampant, the human truth is the biggest differentiator.
The goal should be to bring a neighborhood mom-and-pop shop experience to a social media space that’s been overrun with big box retailer and superstore dynamics.
Be authentic and connect
That’s another way of saying be real and be a part of the community. One of the main reasons we support small businesses is because of its human aspect - the people, the story, the connection to the neighborhood.
In fact, 77% of consumers in a survey said that they sometimes purchase products or services solely because they believe in the brand’s values/reputation and want to support them.
Instead of only relying on a product’s features to differentiate, brands should dive into the who, what, where, when, why and how’s of their business. Then with a publisher’s approach, connect through content around those areas that may interest or benefit their specific target on that particular platform.
Allowing the target to virtually experience different aspects of the business lets them learn about how it relates to them. This grows community, builds trust and increases purchase intent.
Scale in-store interactions
When someone asks a question or makes a comment in a store, it’s expected that the owner or employee will respond. This needs to happen on social media as well.
There are two big reasons why:
Consumers think of social media as a customer service channel, and it’s also now a point of purchase.
In Japan, younger people surveyed said they prefer connecting via email (30.8%) and social media (26.4%) over phone (22.6%) and in-person (21%), so this is a primary communication touchpoint for brands. As a window into the near future, 32.2% of teens in the survey favored social media.
It provides free consumer insight into what works and what doesn’t, what people want to know about and what they’re tired of hearing and seeing.
These interactions makes the business more accessible, and with e-commerce capability built in, the consumer can seamlessly make a purchase.
Give added value
As a business enables these human experiences to happen through their social account, the ability to recognize bigger fans and customers increases.
This opens up the opportunity to strengthen the relationship with them even further. This is when businesses can provide added value. This can come in the form of coupon codes, exclusive experiences, early access, gifting and more.
Giveaway campaigns also tend to work better here since it’s targeted to followers who have some context and relationship with the brand.
Choosing fans to surprise and delight can also lead to positive reactions and increased word-of-mouth.
This message from J. Crew's CEO, for example, is thanking the customer for choosing to shop with them when there are so many options available. It's worth noting that this wasn't included with a purchase and isn’t a coupon to entice future spending- it is purely a gift.
In pre-social media days, businesses started with a product and then built an audience. Now, more and more businesses are starting with the audience first, then releasing a product after.
We can see this trend coming to play when we look at artists, celebrities and influencers increasingly launching their own brands.
As commerce increasingly shifts to various online communication channels, it is of utmost importance for businesses to focus on audience, and social media.