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5 Social Commerce Trends To Watch Out For In 2016

Posted on March 28, 2016 by in Resources | 11 comments

5 Social Commerce Trends To Watch Out For In 2016

“Buy Now.”

That is the call-to-action on a Facebook ad for HP’s latest notebook.

If you’re a busy consumer who is searching for a notebook, why spend time going in to a retail store, or even browsing the web, when you can research and purchase via social networks directly?

Ever since Facebook, Pinterest, etc. allowed brands to sell products in new ways, social commerce has been thriving. Today, you’ll see that thousands of businesses, from the neighborhood retailer to the biggest enterprise, are engaged in social selling. Also, they’re paying attention to new social commerce trends.

Did you know?

  • In 2015, out of the total global eCommerce proceeds, more than $30 billion were generated from different social networks directly. (source)
  • According to a survey, more than 59% of marketers think social commerce will be the top trend of 2016. (source)
  • 2 out of 3 sales teams (64%) that utilize social selling techniques reach quota, compared to less than half (49%) of those who don’t. (source)

The numbers show that social commerce has immense potential when it comes to selling products or services online. Consumers love it. And brands are generating significant revenue from social selling strategies.

Here’s the average order value generated from different social referrers:

Average order value social commerce

Image source: Shopify

Perhaps you’re already running a Facebook store (kudos to you if you’re generating decent revenue). While this channel may currently account for only a small percentage of your total online retail sales, all developments suggest that social commerce will drive greater revenue in the future.

That’s why you’d want to keep yourself updated with the latest social commerce trends.

Knowing what’s up and coming and what’s already working will help ensure you’re taking advantage of new opportunities. Here are 5 social commerce trends you should focus on in 2016:

1. Increased Reliance on Videos

In 2016, brands are expected to utilize social media videos on a greater scale. This is one of the social commerce trends that is being supplemented by new developments. Last year for example, Google announced shoppable ads for YouTube that enable users to buy products they see in pre-roll advertisements when they’re about to watch a video.

Other than that, YouTube also introduced interactive cards that can be used to display product information and a simple call-to-action that tells viewers to buy the product. Don’t be surprised if other social networks also introduce similar features before the year ends.

Here’s a screenshot from the shoppable video that ASOS experimented with on their brand channel:

social commerce trends shoppable videos

Image source: KLOK

Another interesting development is of live video social commerce platforms. An example is Your Brandlive, a platform that combines live videos with comments and questions from consumers to create a custom retail store brand experience. Its user interface provides a point-of-sale, chat and live video to engage people and close sales.

2. Instagram Thrives as a Social Commerce Platform

According to a report, Instagram advertising competition heated up in the second half of 2015, and signaled growth for 2016. This isn’t a surprise as social media shoppers are increasingly using mobile apps to research and buy products. With Instagram offering a native experience on mobile, it’s expected to thrive as a social commerce platform.

Currently, Instagram offers 4 call-to-action buttons, including ‘sign up’, ‘shop now’, install now, and ‘learn more’. The buttons take consumers to a brand’s app, website, or landing page offering an email subscription opportunity.

Instagram shopping may become native

Image source: Skift

However, the current offering adds an extra step to the buying process, so it would be interesting to see if Instagram makes the experience native by enabling the actual shopping experience to take place within the app itself, like Pinterest does. The average order value brands generate from Instagram is just $1.75 behind Polyvore.

Instagram is also trying to make video ads more shoppable. Just last month, it expanded the time-limit for video ads from 30-seconds to 60-seconds. Brands like Warner Brothers and T-Mobile have already tested these ads, and it’s expected that the new ads will be available to smaller advertisers pretty soon. It would be interesting to see the impact of a 60-second product story with one of the CTAs on revenue.

3. Brands Embrace Messaging Apps

Did you know that the collective user base of the top 4 chat apps is bigger than the collective user base of top 4 social networks? The use of messaging apps to sell products and services is one of the social commerce trends that’s expected to boom exponentially in 2016. The Chinese messaging app, WeChat, already enables verified sellers to create shops within the app.

eMarketer analyst Cathy Boyle stated that in 2016 Facebook may begin monetizing Messenger and WhatsApp. And she doesn’t expect Facebook to take the same approach with these apps as it did with the Facebook app. She thinks that the social giant will follow the route of other successful monetized messaging apps, including Kik, Tango and WeChat, and charge for emojis, stickers and sponsored accounts.

Messaging apps are the future of social commerce

Image source: TechCrunch

In other words, Facebook wants to let users do any transaction they can do via mobile or online via its Messenger app, including booking a restaurant table, buying a movie ticket or shopping groceries. Ordering an Uber through Messenger may also become a possibility.

Also, advertising may arrive on Messenger, where Facebook uses its algorithms to serve personalized ads based on the purchase activity of the user. On WhatsApp, there may not be an advertisement, but as pointed out in the report by Todd Wasserman, Facebook might take data from it and use it for precise targeting on other channels.

4. Reviews & Ratings Impact Social Commerce Revenue

Social proof has a significant impact on conversions. According to Yotpo’s data on the reviews shared to social, the average conversion rate is 40% more for Facebook, 8.4 times more for Twitter, and 5.3 times more for LinkedIn. As the data depicts, reviews on social networks serve as social proof and result in higher conversions.

Ironpaper cited an interesting stat: Social media influences the buying decision of 93% of shoppers because peer recommendations are trusted by 90% of them. However, only 14% of them trust advertisements. This is the only trend among all social commerce trends that provides people the reassurance that the item they’re considering to buy is actually the right choice for them.

Therefore, ratings and reviews stand for social validation. Brands that integrate reviews and ratings in their social media ads, interactive cards, videos, etc. are likely to get greater conversions from their social commerce initiatives.

Reviews & Ratings Social Commerce Trends

Image source: TechCrunch

Unfortunately, not many platforms offer this feature at the moment. Facebook allows people to review and rate a business page, but that’s it. It would be intriguing to see the impact on conversions when ratings and reviews are integrated into Facebook ads, Twitter ads, etc.

Large brands may be able to do it with their own API on a social media storefront, but small businesses need to wait for such a feature (third-party tools aren’t mature enough). In-app ratings and reviews are a great example of where this is happening already.

5. User-generated Content Rules Social Commerce

2016 will be the year when brands become smart enough to convert all that user-generated content into product catalogs. UGC was also in the list of last year’s social commerce trends, but this year businesses are expected to generate sales from fan-submitted videos and photos.

This is a smart thing to do considering that brand engagement rises by 28% when consumers see both professional information and user-generated content. UGC would enable your target audience to co-create product designs, which would be beneficial because sometimes your ideal customers are looking for something inspired by a real community or people they can relate to.

So, when presented with the tyranny of options, “created/inspired by real people” could be the beacon of light that narrows the decision and clarifies what a customer should buy. And by appearing on social media, UGC also serves as social proof.

Cloudaria is a great example of this concept. Instagram, Twitter, and others may soon release new features that are similar to the concept of collecting, moderating, publishing and monetizing UGC. Cloudaria says that your customers are your best salespeople.

Cloudaria visual commerce

Image source: Cloudaria

Hashtags will also play an important role when you attempt to use UGC to drive sales. For instance, you can ask your audience to submit their own creations using a particular hashtag, which would help you keep track of their submissions. You can also announce that user-created product variations are up for sale, and they can be discovered using the same hashtag.

Final Thoughts

People love shopping in a social environment, but they don’t want to be interrupted by extra steps or tracking tools. Social networking companies are starting to realize this and make the shopping experience as direct and intuitive as possible. As a result, social commerce will only boom in the upcoming years.

By keeping an eye on the above-mentioned social commerce trends, you’d be able to place yourself in a position where you’re one of the first brands to leverage new features that assist in generating direct sales via social networks. Who knows, you might even get a mention in a case study.

What are your thoughts? Do you use any social network to sell products/services? Feel free to leave comments.

Article thumbnail image by ideyweb / shutterstock.com

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11 Comments

  1. Wow. Just wow ! Isn’t the on-line world an exciting place ? Great article.

  2. Great eye Dan! I’m gradually (and organically) building my Instagram following, so I hope I’ll be able to leverage the commerce aspect of it in the future.

  3. Yeah, but as an advertiser, its getting only more complex. Where to spend your money? Adwords/AdSense/Youtube/Facebook/Instagram/Whatsapp and what more?
    I hope this stuff chrystalizes into one or two advertisement platforms.

    Question. Is that chart in the beginning a ROI chart or what is it. How do these figures relate?

    Great article anyway,

    • More complex and more effective if you know what you are doing.
      And it won’t chrystalize into 2 platforms.

      Not ROI, it’s AOV

    • Hi Richard,

      As wojtek pointed out, it really depends. These platforms work really well for some brands (that’s why there are so many success stories out there).

      And it’s a chart that shows AOV = average order value. Higher average order value indicates you’re getting more out of each customer.

      • Thanks for the reply.
        Im very interested to see where this is going to.
        I spend $300,- lately on an ad in a local paper thats distributed amongst 70.000 houses.
        Received 0 responses. Paper ads definitively have had their best days.

  4. This really a great article and this trend has been on my mind for a little time now. Great article, just learned something g new and I plan on running with it. Thanks Dan.

  5. Indeed, great insights.
    I was not aware of the power of Instagram until I read about a photographer’s story who earned $15,000 in a single day from Instagram, that was an eye opener for sure.

    Thanks to you for crafting this article.

    Regards,
    Karan

  6. That is interesting.
    The Cloudaria concept would be cool to be applied in all social media.

  7. Amazing article. Can you explain more about Video Trending in 2016?

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