admin - 08/28/2024
Social media platforms are expanding and evolving their features to enable consumers to discover, share and purchase products. This trend presents an opportunity for businesses to increase sales, but is it the right move for your brand?
The rise of trend-influenced shoppers and influencers combined with emerging commerce features on social platforms has driven the growth of social commerce. Previously, it was only possible to sell products on your company social media pages through embedded links. Now, these platforms have transformed into full-blown online shops where buying is naturally integrated into the interface.
Businesses are seeing significant benefits from the advent of these tools, but to determine if your retail brand should sell on social media, you first need to understand how they work. In this blog post, we’ll dive into the selling functionality of each platform and the potential they offer to drive sales.
Instagram Shopping
Instagram is one of the top platforms to monitor when it comes to integrated product sales on social media. While there is no designated “marketplace” on the app, the Instagram Shop is seamlessly embedded in the feed. Shopping no longer takes place solely through external links; it can now be done within the app with just a click.
Product “Shops” can be set up to include categories, product descriptions, and product-tagged images. The convenience of the in-app purchases is helping to drive sales for many businesses. According to Meta, businesses that tag products in their feed posts see an average of 37% more sales.
TikTok Shop
While Instagram’s shopping features are making waves in social media, TikTok is taking even more significant steps to incentivize users to buy on their platform. The “TikTok Shop” is a revolutionary link between shopping and scrolling. Glamour reporter Stephanie McNeal recently ran an article explaining her experience with the app titled “TikTok Shop is So Easy to Use It’s Actually Dangerous” in which she stated “There was a loss of the ‘Do I really need this, though?’ moment that typically occurs when you have to open an external shopping link.”
Within the TikTok app, users can click on products in videos to see pricing, reviews, and similar products. Users can even complete transactions without leaving the platform. It’s an effective way for sellers to harness the engagement of various audiences on TikTok. According to TikTok, 70% of its users discover new brands and products on the platform, and 3 in 4 users are likely to buy something while using TikTok. The platform is also unique for its “Live Selling” feature, which allows users to buy products during a business’ live video streams, often with special discounts and prizes.
Facebook Shops
Businesses can now set up fully functioning online stores directly on their Facebook business pages through Facebook Shops. Not only are Shops easy to create, but they are very customizable, so you have a lot of flexibility to match up the look and feel with your brand identity. Items from your populated catalog will be shown as personalized products to users who can make purchases right within the Facebook app or be directed to a website where they can make the purchase.
Facebook has partnered with top ecommerce solutions, including BigCommerce, Shopify, Woocommerce, Channel Advisor, CedCommerce, Cafe24, Tienda Nube, and Feedonomics to help simplify the buying and fulfillment process.
Facebook also offers access to a different age group of shoppers than Instagram and TikTok. While just about 50% of TikTok users are under 20, with the largest age demographic (25%) being 10-19, Facebook caters to an older and more financially stable audience. The largest age demographic on Facebook (31%) is 25-34 years old.
Disadvantages of Selling on Social Media
Although these new sales tools offer a lot of potential for sales growth and customer connection, businesses must also consider the cons of selling on social media. As expected, Meta takes a cut of all Facebook and Instagram shop sales. Once a brand has transitioned into Facebook or Instagram’s Shopify partnership, rates are set at a flat fee ranging from 2.9% to 3.49%, depending on the transaction type. If a seller chooses to use a third-party shopping platform, they will be charged a “processing fee” of a non-disclosed amount. Similarly, TikTok Shop charges a commission fee, but theirs varies by product category. As of the last update by TikTok, the marketplace commission fee by product category can range anywhere from 3.2% to 6.8%. This is a much higher rate than Instagram and Facebook shops, but TikTok Shop is also currently the top-selling platform.
Determine if Social Commerce is Right for Your Business
Here are some questions your business should answer to help decide if now is the right time to begin selling your products on social media.
- Does your business sell a tangible product?
- Does your business currently use e-commerce for sales?
- Is your current sales fee higher compared to the social media marketplace sales fee?
- Does your business have a strong social media following?
If you can answer “yes” to all these questions, social media marketplaces may be the right tactic to focus on in the coming months! Eliminating the “middle man” and implementing in-app purchasing and marketplaces could change the way consumers purchase your products. To learn how you can harness selling on social media, email ezinberg@3epr.com.
Author
This guest blog was written by 3E PR intern Olivia Belasco.