Summary
READ ITIf you're looking at moving your business practices online, you've come to the right place. As a business owner you've probably come across the terms ecommerce and social commerce, however, what exactly do these terms mean? In simple words, these terms, while similar, offer completely unique and different consumer journeys for your audience. Understanding these concepts is critical when it comes to making decisions in regard to the online landscape of your brand.
What is E-commerce?
Understanding E commerce is tricky yet highly effective when it comes to growing your business. E-commerce can simply be understood as traditional internet shopping. It revolves around customers visiting your store to purchase products through your brand's website or mobile application. Through your website, customers have the freedom to browse products, and add those of preference to their digital cart, which is often followed up by completing the purchase through various online payment modes.
While it sounds complex, brands can set up e-commerce websites simply by creating a website on their own or utilising a Point of Sale system integrated into the platform, without buyers having to leave the comfort of their home.
Common e-commerce features
- Product Listings: This feature with the help of detailed product information ranging from prices to images showcases your brand's merchandise/services.
- Shopping Cart: This allows shoppers to add or remove items of their preference they plan on purchasing prior to placing their order.
- Secure Checkout: Provides shoppers with the opportunity to use a payment method of their choice and to purchase products from your brand without worrying about their personal data being compromised.
- Order Tracking: Allows buyers to track the status of delivery of their ordered products in real time.
- Account Management: Gives individuals the ability to create an account to manage their orders and purchases, allowing brands to harness a database of their recurring customers and their preferences.
- Star Ratings: Gives products a rating based on the average purchases of your products.
- Written Reviews: Gives customers the opportunity to provide their views on purchased products, thus sharing their experience with other consumers.
- Sorting Functions: This feature allows the utilisation of filters, which makes it easier for customers to filter their searches based on the quality or price of products as well as recommendations based on the products that have the highest sale frequencies (bestsellers).
- Cookie Consent Banners: Essential for compliance with data protection regulations, these banners inform users about how their data will be used and allow them to provide or deny consent for cookie usage.
Thus, these features entail an e-commerce experience, bringing the shopping experience to your target audience online and in a centralised location that is accessible to the majority regardless of their location.
What is Social Commerce?
Now that we have an understanding of what exactly e-commerce refers to, it's time to understand the concept of social commerce. Simply put, community retail is interpreted as the implementation of product sales through social media platforms in order to increase your sales channels from solely your mobile app or website and further increase your brand's digital reach.
This means that customers can purchase products from your business simply by visiting your social media pages, be it Facebook Marketplace or your Instagram shop. Additionally, users can make their payments directly through these social platforms.
Finally, social commerce can have a strong impact on your brands reach as numerous interpersonal marketing strategies can be implemented to showcase your products through the lens of other social influencers who already have a large audience, in turn creating a sense of trust and authenticity around your brand.
Before jumping into the theory differentiating between the two, it is essential to grasp an understanding of the similarities between the two.
Firsts similarity with e-commerce: Products Listing
The first is that both social and e-commerce platforms give brands the ability to showcase their products or services virtually or online.
Second similarity with e-commerce: Customer Reviews and Ratings
Secondly, both platforms leave room for your customers to leave product reviews online in order to guide and educate others who visit your platform at an interpersonal level.
Understanding the key differences between community retail and e-commerce.
Difference 1: Payment Integrations
Retail on platforms:
- Smooth In-app experience: When it comes to community retail platforms, be it Instagram shop or Facebook marketplace, are known for providing a seamless experience in regard to in app payments. This, allows for your customers to complete transactions with the social app itself without having to be redirected to another platform or third party app.
- Enhanced User Experience: Through the implementation of in-app payment integration on the social platform, the checkout process is simplified significantly, in return reducing the friction in the buying process for users. This focus on a user-centric approach adds a touch of convenience for the customers.
- Security Emphasis: These approaches prioritize the security of user data. Robust encryption and data protection measures ensure shoppers data safety as well as an added sense of security.
- Payment Method Familiarity: When it comes to payment gateways, customers often tend to trust established digital media platforms, giving them a sense of familiarity when storing payment methods for recurring purchases.
- Trust Building: As mentioned above, this strategy leverages off social interactions significantly in addition to endorsements from influencers, which in turn builds a sense of trust within your digital community, making the shopping process feel more authentic.
Retail on e-commerce stores:
- Third-Party Payment Gateways: On the other hand, when it comes to e-commerce, there is a strong utilisation of third party external payment gateways such as PayPal, Stripe, Square, etc. These gateways provide a variety of payment methods, giving users the freedom to choose their preference. Thus, creating flexibility for customers.
- Customization and Control: When utilising these ecommerce platforms, brands are able to customize their checkout process, enabling tailored and personalised experiences such as multiple shipping choices.
- Stringent Security Measures: These sites are known to implement stringent measures that are required to meet ‘Payment Card Industry Data Security’ standards in order to ensure the payment details of the customer remain secure.
- International Transactions: Finally, these platforms are well-designed with intentions of processing international transactions, without compromising on currency conversions.
Difference 2: Discovery and Social Interaction
Community Retail:
1. Social Discovery: When it comes to social commerce, it is reliant solely on social interactions as well as product discovery through shoppers/customers social networks and presence. This approach revolves around the concept of bringing new products to customers by introducing this item via methods of recommendations, relevant shared content as well as discussions within the social media platform of choice itself.
2. Influencer Impact: Another feature that is leveraged largely is the influential aspect of social media users who have a large and active social presence. These brand ambassadors have the ability to showcase products they have received or purchased from your brand to their audiences, building a sense of authenticity around your brand.
3. User-Generated Content: Another feature is UGC. This refers to the ability of shoppers to contribute to product discovery through the creation of visually appealing and engaging material related to their past purchases. This is inclusive of not just testimonials, but also unboxing videos and merchandise reviews.
4. Real-Time Engagement: One of the leading features is real time user engagement. This implies that customers have the ability to ask questions, inquire about recommendations as well as receive feedback on the spot, be it from friends or other online communities.
5. Viral Potential: Finally, social network campaigns offer your brand a high potential for going viral, due to the inherent nature of these platforms promoting a sharing nature. Put simply, a product or offer by your brand can instantly gain popularity through digital means such as likes, shares or comments.
E-Commerce:
1. Search Engine Discovery: When it comes to traditional online shopping, these sites and brands rely mostly on search engines as well as traditional advertising strategies in order to market their product discovery. In order for customers to find your brand's products, they are required to search for specific keywords or categories.
2. Structured Shopping Experience: In comparison to community retail, these traditional platforms are found to have a more structured experience. This is because shoppers often navigate through search bars and categories in order to find the product or service that they require.
3. Limited Social Interaction: While customer reviews is a similarity noted between the two, e-commerce platforms often notice a limited level of community interactions as the focus is often less on social interactions and more on endorsing a transactional focus.
4. Content Moderation: Finally, these sites tend to moderate UGC to a larger extent in order to prevent reviews and comments hindering their quality standards or guidelines.
Difference 3: Marketing approaches
Community Retail:
1. Influencer Marketing: When it comes to promotional strategies, these community retails platforms place a strong emphasis on influencer advertising. Brands tend to collaborate with social media influencers in order to promote their products to a wider demography, as well as engage their audiences with product endorsements.
2. User-Generated Content: These strategies significantly promote user generated content in order to maximise their marketing efforts cost effectively. This is done by means of social network posts as well as reviews, which further adds value to promotional efforts through authentic endorsement channels.
3. Community Engagement: Finally, this strategy is known for its ability to foster community engagement widely. Through actively interacting with their target audience be it by means of direct interactions, indirect interactions such as replying to comments or conducting live question and answer sessions are able to build a community around their brand.
E-Commerce:
1. SEO and Content advertising: This strategy is heavily reliant on search engine optimization and aspects of content marketing. Brands optimize their websites in order to make their products and merchandise related content rank higher than their competitors on search engines like google, bing etc, while aiming to promote value driven material and educate their customers. White label link building and off-page SEO are crucial components, focusing on acquiring high-quality backlinks from reputable sites to improve domain authority and search engine rankings.
2. Pay-Per-Click Advertising: Pay-Per-Click campaigns are one of the most commonly used paid marketing approach used by brands with a presence only via their websites. In this process, brands are required to place bids for keywords, which are further displayed as advertisements on result pages of these search engines.
3. Email Marketing: Finally, this approach utilizes email marketing campaigns as well as remarketing methods with an aim of creating personalized material for its customers. These campaigns are inclusive of both product recommendation based on shoppers purchase history and the utilisation of abandon cart marketing, which has a potential of converting users that merely visit your site without actually purchasing products from you. Additionally, ensuring email authentication through protocols like SPF (Sender Policy Framework), DKIM (DomainKeys Identified Mail), and DMARC (Domain-based Message Authentication, Reporting, and Conformance) enhances the credibility of these campaigns, reducing the likelihood of them being flagged as spam.
4. To own customers' data → An additional element is that, as a brand, you're able to store non-personal user data of those individuals who regularly engage with your business. This data is inclusive of purchase history, product sizes etc, which can significantly boost your revenue by close to 20% if the data is leveraged efficiently. Simply put, user data can be utilized in order to boost the effectiveness of your brand's personalized marketing attempts.
Understanding which one is right for your business?
Now that we have an in-depth understanding of both e-commerce and community retail, identifying which approach best fits your brand can be tricky. However, it is important to infer that your brand's decision doesn't have to involve just one of the two approaches, but instead a seamless blend of both in order to ensure maximal efficiency when it comes to widening your target audience reach along with maximising your conversion rate.
A comprehensive e-commerce website will offer a comparatively recognisable experience for traditional shoppers, while utilising social commerce approaches to build a robust presence will not only increase the reach of your marketing efforts but also lead to an increase in brand loyalty amongst your existing customer community.
For example, creating a robust website to list your merchandise is effective however, utilising community retail approaches on your social media platforms can amplify your reach and remove any hesitation potential customers may face when making their purchasing decisions.
Frequently Asked Questions and Social Trends
What are the social commerce trends in 2023?
- This last year, social commerce trends that are dominating are that of embedded video shopping features. Platforms such as Instagram and TikTok are seen to have enhanced their capabilities for brands selling merchandise, allowing them to create engaging video material which allows customers to purchase and interact with merchandise directly from the video material itself. This is an essential requirement for business in today's world, as by adding unique elements such as product images, add-to-cart interactions or even coupon discount codes, shoppable videos, ad a unique touch of engagement for your users.
Is TikTok a social commerce?
- Of course, TikTok is indeed a social commerce platform. With a recent introduction of its attributes such as "TikTok Shop", users now have the ability to discover as well as purchase items directly from the social platform. Thus, making TikTok a reputable competitor with the social commerce market.
What is an example of a social commerce company?
- From likes to sales, Eureka street furniture, is a notable furniture store based in Australia. An ideal example of social commerce, they have made their name through the creation of visually appealing experiences through the integration of shoppable Instagram user generated material on their website carrousels.
.png)
.png)
