Shopping on social media platforms like Instagram and TikTok is predicted to grow exponentially over the next few years. A report by Accenture ACN entitled “Why Shopping’s set for a social revolution” shows how the power of social commerce will be transformative for the retail industry.
The report predicts that by 2025 social commerce will reach ‘$1.2 trillion, up from $492 billion in 2021 and highlights how this will create a power shift from big retailers to small businesses. However, with shopping becoming easier than ever, will this lead to more debt for consumers?
A revolution for small businesses and customers alike
The report highlights how “social commerce offers something radically different from traditional e-commerce by weaving buying and selling into the fabric of everyday life and through a real sense of community and connection.” As a result of this interconnectivity, it’s a game-changer for small, independent retail businesses – easily connecting to new customers and markets.
Whilst social commerce enables consumers to connect with all types of retailers and discover small, independent businesses through their device at home, at work or on a train, it also means that ‘shopping’ slips into everyday activities. No longer does a consumer have to plan a ‘shopping trip’ or decide to go online to a retailer’s website.
There is much evidence to suggest that people are influenced to purchase by social media posts. A recent survey of 2000 Americans conducted by OnePoll and commissioned by Point, found that “social media is very influential on spending, with preferences are towards TikTok and Instagram”.
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Whilst the survey found that “59% of respondents reported that influencer posts have influenced them to make a purchase from social media” and “respondents report making more impulse purchases from social media than in-store shopping” – it also highlights the less talked about challenge of this ‘revolution’ – debt.
Too easy to shop?
The ease of purchasing via a social media platform is a huge win for the retail industry but with it comes a caution. Point’s survey found that “Social media is causing respondents to go over budget, spend more money than intended, or to go into debt”. A staggering “45% of respondents have gone into debt to purchase an item they saw on social media”.
As Accenture’s study lays out: “any brand, large or small, can sell via social commerce, and any individual can now become or create a ‘brand’ of their own and reach a market directly”.
Many small businesses have come to represent a more sustainable, ethical and conscious alternative to big business. If independent businesses manage to maintain this integrity and responsibility for their customers they could triumph in the social commerce world.
Accenture stresses how social commerce “has hugely positive implications for small businesses and entrepreneurs as they are able to reach potentially massive markets that were simply not available to them before”.
Moving forward if businesses ensure that they put ‘people’ at the heart of any social commerce planning and strive to meet their customers’ wants and needs on those platforms – shopping could be the delight both retailers and shoppers desire.