Although social media has a strong influence on driving purchases, the value of each social visit has decreased by 11% since Q3 2016 according to Adobe.[i] The question for brands is how to better channel one’s willingness to purchase into an actual purchase before the consumer turns to another brand, or another product? One way to do this is to remove the friction between intent and check-out.
With new features like Instagram Checkout, brands can now transform their social media into a cash register. But while it’s just now becoming a global phenomenon, the power of social commerce strategies is something that brands, retailers and developers in Asia have understood for years. For instance, 28% of Chinese consumers use Mini Programs in WeChat to shop without leaving the app.[ii]
Jumper.ai is Leading Trends in Social Commerce
Singapore-based Jumper.ai is the first company to allow for the entire checkout experience to happen directly on social media. Since its launch in 2017, Jumper has helped thousands of brands turn their social media accounts into points of sale, driving buyability and increasing ROI. Yash Kotak, Chief Executive Officer of Jumper.ai, shares his views with iProspect on the most important components to a successful social commerce strategy.
How to Drive Sales on Social Media
Choosing The Right Platform:
Different social media platforms engage and convert differently. Take Facebook and Instagram, for example. There are 1.56 billion daily active users on Facebook[i] and 500 million daily active users on Instagram.[ii] However, while Facebook clearly dominates when it comes to reach, organic engagement with brands’ publications is higher on Instagram (1.60% median engagement rate per post vs 0.09% for Facebook[iii]).
That said, brands need to keep in mind that these are generic statistics, and their own user bases might behave differently. Social commerce tools enable brands to try out different social platforms to compare click through rates, conversion rates, and average basket size to determine which platform has the most potential for a specific brand or product.
Creating Engaging Content:
Social commerce is where content meets conversions. Content is no longer just an awareness and engagement tool; it is slowly turning into an instant point of sale across social networks. For instance, following the debut of its fashion line #TOMMYNOW, Tommy Hilfiger ran a series of photo ads and video ads to encourage people to initiate a conversation with the TMY.GRL bot on Messenger. Interacting with the bot, users could view the collection that had just appeared on the New York runway, go behind the scenes of the show and shop the collection.[iv] Visually appealing, video-based social media posts, supported by deep storytelling, are the new branding and conversion currency.
The convergence of branding, performance marketing strategies and budgets is putting pressure on the advertising industry to rethink and repackage its payment models. While most advertising platforms currently run on cost per click or cost per impression models, we’re expecting a rather rapid shift towards cost per action models. Advertisers are no longer looking to just pay per click. They want to pay per (actual) performance.
Brands Need to Consider Consumer Trends:
Social commerce has not only changed which channels brands sell through, but also how retailers segment and brand their products. Single-product, vertical-focused brands will most likely take centre stage. That’s not to say larger brands must revert to selling only one product line, but rather they should rethink their product positioning and create different sub-brands or brand pages. FashionNova is a great example of this. They have continuously added new product lines during the last few years, but each with its own social presence and its own brand strategy, turning the fashion brand into one of the most researched on Google alongside luxury fashion houses. Other brands like Supreme use the product drop strategy, which is all about exclusivity and fleeting buying moments.
Additionally, social and messaging commerce tools can deliver real-time insight on which content converts best, giving brands more storytelling power and an ability to evolve brand positioning alongside changing consumer trends.
Source: E-commerce platform walkthrough - How to get started with jumper.ai, Youtube
Data-Driven Personality:
With social networking, brands have moved towards personification, developing a specific voice and tone. One industry concern often expressed in reference to social commerce is the concept of brand disintermediation, in which the brand’s unique voice doesn’t translate to in-app checkouts. It’s a valid concern. However, with the help of data and artificial intelligence, brands can replicate that personality when they adopt social checkout. Technological innovations like Jumper enable brands to create emotion-evoking, fully conversational checkouts through messaging tools like Messenger. With the ability to plug into brands’ marketing and CRM stacks, and to tap into socio-demographic data, customer surveys, and product interest, the checkout can be customised to each individual based on his/her purchasing preferences, taking social media conversion rates to the next level. Jumper’s merchants, for instance, experience an average conversion rate of 25-35%. Some campaigns have even achieved conversions up to 82%.
What is The Future of Social-Based Commerce?
Social-based commerce has the potential to make online shopping enjoyable again by enabling retailers to mimic offline shopping behaviour in an online environment. Brick-and-mortar shopping is a classic social activity, and online shopping sites, with their ‘pull’ and ‘hard sell’ approach, are simply not as much fun. By tying new engagement and brand expression opportunities to instant, in-app checkout, social commerce strategies have the potential to actually make shopping social again. Combining consumer awareness, transactions, promotions and re-engagement all into one platform gives unprecedented power to brands to drive conversions and create new revenue channels. But it doesn’t stop there. With headless API integrations built on top of their current architecture, brands can even move beyond social. Ultimately, as online and mobile consumer behaviours evolve, and the definition of a social platform continues to expand, it’s likely that social commerce will morph into everywherecommerce.
This article is excerpted from the report Data-Driven Commerce. Download it now for key insights on winning at commerce in the new digital economy.
SOURCES:
[ii] eMarketer, What Types of Miniprograms Do WeChat Users in China Use?, Q1 2019, January 2019
[iii] Facebook, Facebook Reports First Quarter 2019 Results
[iv] Instagram data as displayed on business.instagram.com in April 2019
[v] RivalIQ, 2019 Social Media Industry Benchmark Report, February 2019
[vi] Facebook, From catwalk to commerce with Messenger
