12 November 2019
What’s Happening Here?
People traditionally use social media platforms to browse images, watch videos and catch up with their social networks. Now, multiple platforms are incorporating their own marketplaces, within their digital infrastructure, to enable direct and easy purchases for the convenience of their users.
What Does This Mean?
Social media platforms like Instagram, Facebook, Pinterest and Snapchat have launched in-built checkout functions which allows users to click on the photos of items they are browsing and complete a purchase directly within the app.
This means that if you like a piece of clothing worn by a model in a photo, you can simply click it and purchase the item in a matter of minutes.
Why Should You and I Care?
Consumer purchasing decisions are heavily influenced by social media, with 31% of consumers using social media channels to browse for new products, and 71% of consumers preferring to buy an item referred by a friend on a social platform. 78% of shoppers say posts of companies influence their buying decision.
This trend is relevant not just to e-commerce companies but traditional brick and mortar stores as well, which are taking advantage of the marketing potential available to them through social media. Social networks allow companies to tap on a readily engaged audience with high purchase intent, leading to lower customer acquisition costs.
Companies must be innovative enough to leverage social media channels and make seamless transactions possible for customers who increasingly expect instant gratification instead of being redirected elsewhere to complete a purchase. Customer engagement is set to become even more customised and personalised with the utilisation of AI to tailor recommendations and responses. For instance, our portfolio company Sorabel, is already using a ‘chat bot’ that acts as a personal assistant to provide customised responses to enquiries on messaging platforms like Facebook and Whatsapp, and is able to recommend relevant products before seamlessly directing them to complete a purchase within the platform. These developments are giving rise to a whole new era of online shopping where social interaction and inspiration can easily drive actionable purchases.