What is Social Commerce, and why do I need to know?

If you’re a social media user, you will almost definitely have noticed the addition of the ‘Shopping’ feature to platforms such as Facebook, Instagram, TikTok & Pinterest. Otherwise known as social commerce, the ability to sell products directly within social media channels is a relatively new development, but early studies show that it’s here to stay. Here’s the lowdown on what we know about social commerce.

Although the term social commerce was coined by Yahoo in 2005 to describe a set of online collaborative shopping tools, it wasn’t until 2019 that Instagram and Facebook introduced the shopping feature. Designed with the aim of creating a ‘frictionless’ customer experience, where the user remains within the app for the entirety of the customer journey, social commerce is now also enabled on Pinterest and Tik Tok. As of now, users still have navigate away from social media to complete their purchase, but product browsing and information can all be found within the app it is listed on. Late adopters YouTube are also in the development stages of creating their own social commerce platform, although nothing has come to fruition as yet.

So, what’s in it for the social media platforms?

Eventually, Instagram shoppers will be able to check out without leaving the app at all, with an undecided percentage of revenue from the purchase going straight to Instagram. This concept has been tested in the US with leading brands including H&M and Kim Kardashians brand, Skims.

Tik Tok and Pinterest aren’t currently believed to be looking at ways to monetise in-app shopping[EF1] , but that doesn’t mean they are losing money. Social commerce creates opportunity for businesses to advertise their products within a platform. This can be through paid advertising campaigns, automated product-based advertising, or influencer marketing.  The 2022 Hootsuite social trends report suggests that over half of marketers surveyed were looking to increase their paid advertising spend this year. This figure gives social media sites with enabled shopping features an immediate advantage in terms of appealing to customers using paid advertising.

It also benefits social media platforms as it potentially increases the time spent on the platform, as users are exploring new ways to experience online shopping. Increasingly, customers view social commerce as an extension to the shopping experience, allowing a user to be browsing social media, interact with a brand or retailer, perhaps view a video of the product being used, demonstrated or reviewed, and then directly view products via the social media platforms “shop”. It provides advantages for both brands and social media platforms.

More importantly, what’s in it for me?

If you’re thinking about utilising social commerce, you might be wondering if consumers are genuinely responding to in-app shopping. The simple answer is: so far, they are. There were an estimated 80 million social commerce buyers in the US in 2020, and it is anticipated that this figure has already risen to 96 million as of 2022. Another statistic supporting social commerce states that 8 in 10 businesses anticipate selling on social media within the next 3 years.

The impact of the pandemic means that businesses not selling online have been somewhat left behind. Even with stay-at-home orders lifted, consumer behaviour has undoubtedly shifted for good. Since 2020 impulse buying behaviour has sky-rocketed. In-app shopping enables this kind of ‘one tap purchase’ behaviour.

So far, social commerce seems to work best for the sale of aspirational products which are not essential items, as these are often purchased with little thought process behind them. Generally, these products will be less than £100. Industries including fashion & beauty, food & drink, video games, apparel and home & garden seem to perform particularly well. be particularly effective in increasing purchase motivation and consumer trust in the product.

The best thing about social commerce – it’s completely free! You can set up your shop and tag products in organic posts completely free of charge. If you wish, you can promote/ advertise a product set (group) via paid advertising, but this is an optional feature.

Setting up social commerce

How to set up a Facebook/Instagram shop:

To start your social commerce journey, you will need to set up a business account on your chosen social media platform – for Facebook and Instagram, you will need to set up a Facebook business manager account. This enables you to manage all your business assets in one place: advertising, commerce, pages, pixels, connected accounts etc. You will then need to set up your product catalogue or feed via “commerce manager” – you can do this using a partner platform such as WooCommerce or Shopify, or you can upload your product feed manually.

How to set up TikTok shop:

TikTok shopping is a social commerce feature that facilitates people using TikTok for business to promote and sell products on the platform. There are however quite a few restricted product categories and certain product categories that require invitation to become a seller. Find out more about setting up TikTok shopping here.

When creating your product catalogue, you must think about the user experience and which images and product categories are likely to engage the prospective shopper. It is recommended to use a mixture of lifestyle images and user generated content, which can be particularly effective in increasing purchase motivation and consumer trust in the product.

Once your product catalogue is set up, you can think about driving sales. It is important to make sure your shop content has easily accessible, relevant product information. It is also recommended that you integrate shopping tags within your organic social content as often as possible to increase product visibility. Additionally, you should be responsive to comments on this content, as good customer service will aid your social commerce strategy.

Influencer marketing and social commerce

You may also want to utilise influencer marketing to push your products on social media. You may have noticed an “eligible for commission” badge on Instagram, this allows selected influencers to post product recommendations and earn commission if their audience clicks on a product link and completes a purchase. Currently, this is only available in the US, however it is likely that it will be rolled out to the UK in the near future.

Currently there isn’t a solution for in-app affiliate marketing on Facebook, although this could be a development for the future as influencers typically see higher engagement than brands. On Facebook, influencers are currently required to disclose any paid partnerships via a hashtag on the post (#ad or #sponsored), or by using branded content tags (that display a tag on the post “paid partnership with “xyz”), but are not currently able to directly tag a product. You should always be mindful of choosing the right influencers for your brand, and using the correct labelling for items that are gifted or are part of an ad. 

When it doesn’t work

Social commerce isn’t for everyone. Strict advertising policies mean that certain products including alcohol and restricted healthcare products/services are not able to be advertised in any form on social media, including in product catalogues. In-app shopping also doesn’t allow the listing of digital products. If any items you upload to your product catalogue are rejected, you will be notified by the platform and given the opportunity to appeal the decision.

With consumer behaviour shifting, social commerce is likely to pop up on our screens more and more. Combining this with the rise of the in-app purchase, it will be interesting to monitor the usage of in-app shopping in months to come. There will undoubtedly still be online shoppers coming from other channels such as search engines and email marketing.

If you’re interested in setting up social commerce for your business, or enhancing your existing organic social media strategy with product tags, speak to one of our digital marketing experts today.


 [EF1]I think TikTok now has their TikTok Shop function