Total Retail
The phenomenon of social commerce is rapidly transforming how people buy products online. Whether through serendipitous discovery or a deliberate search, social media is now very much part of the commercial experience for consumers. And the second youngest generation, Gen Z, are the trendsetters.
A massive 88 percent of Gen Z consumers use social media to discover new products. Furthermore, more than one in five (22 percent) of them actually make purchases through social commerce channels, the highest rate across all generations.
Of course, social networks have come on in leaps and bounds since they first arrived on the scene in the early to mid-2000s, and it's not so long ago that many of us wondered how these platforms were ever going to monetize their rapidly growing audiences.
Now, platforms such as TikTok are changing our expectations of social media. Users can easily discover products through interactive video, buy them in-stream, then swipe onto the next video. With 44.7 percent of TikTok users falling into the Gen Z category, retailers are falling over themselves to target this group in their social commerce campaigns.
Social Commerce Isn't Just About Gen Z
However, if their focus is too narrow, retailers could be missing out on a massive opportunity. A recent report by Wavemaker found that just 5 percent of brand spend on influencer target campaigns is targeted at Gen X despite 92 percent of this generation using social media every day. This is just a part of the growing body of evidence suggesting there's a large chunk of the market with considerable purchasing power currently being overlooked by many retailers.
It isn't just Gen Z that has learned new behaviors from TikTok. Millennials are nearly as likely as Gen Z to be looking for new products and making purchases on social media. Those in Gen X might be a little behind, but not by much. The networks favored by each generation for these actions might differ slightly — Gen Z predominantly opts for Instagram and TikTok, while millennials generally prefer Facebook and Instagram — but the fact of the matter is that people in all of these age groups are social shoppers.
How Social Commerce Can Drive Sales in the Post-Cookie Era
Even though the demise of third-party cookies has been delayed, it's still most definitely going to happen at some stage and retailers need to build up their first-party data banks in order to target consumers effectively. Through consented data collection, they can construct databases with demographic information about their customers. Then, through social media campaigns, they can enable these consumers to discover and purchase products, while uncovering insights about their preferences at the same time.
By taking a page out of TikTok's book, retailers can tap into the power of interactive video to underpin these experiences on whichever social channels they choose. Interactive videos drive customer engagement; for example, a retailer could create a branching video ad that allows the viewer to click on an item to find out more about it, such as product details, price or availability. They could also give viewers a choice of items to look at, revealing valuable data about that individual customer's preferences.
The Power of Interactive Video in Social Commerce
By making video ads interactive, retailers also have the ability to make them shoppable as well. The in-stream checkout is an innovation that means a customer can purchase within the video they're watching quickly and seamlessly, without needing to leave the social platform they're using. It's a much smoother experience than the typical conversion journey, which might involve several clicks and multiple new browser windows, reducing the chance that the retailer makes a sale and leaving the user stranded on a different website.
By collapsing the sales funnel and bringing the moment of inspiration closer to the point of purchase, retailers can maximize their chances of boosting conversion and creating social commerce campaigns that deliver return on investment. Through the insights these campaigns reveal, retailers can also work towards boosting other key performance indicators, such as customer lifetime value.
Takeaway: TikTok's Social Commerce Experience Isn't Just for the TikTok Generation
Discovering and purchasing items within a social platform doesn't have to be the preserve of the TikTok generation. Interactive video and the in-stream checkout can help retailers create seamless purchasing experiences for all customers — no matter their age. What's more, it can also help retailers build up more detailed profiles of their customers, enabling them to offer a more personalized service in the future. And personalization is the kind of feature that appeals to consumers of any generation.
Nick Morgan is the CEO and founder of Vudoo, a Melbourne, Australia-based adtech startup.