Shopping on social media platforms like Instagram and TikTok is expected to grow exponentially over the next few years. Report from Accenture
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 shift in power from large retailers to small businesses. However, with shopping easier than ever, will it increase consumer debt?
A revolution for small businesses and customers alike
The report highlights how “social commerce offers something fundamentally different from traditional e-commerce by weaving buying and selling into the fabric of everyday life and through a true sense of community and connection.” As a result of this interconnectedness, it is a game changer for small and independent retail businesses – and makes it easier to connect with new customers and markets.
While social commerce enables consumers to connect with all kinds of retailers and discover small, independent businesses through their devices at home, at work or on the train, it also means that “shopping” is slipped into everyday activities. A consumer no longer has to plan a “shopping trip” or decide to go online to a retailer’s website.
There is plenty of evidence to suggest that people have been influenced by the purchase through social media posts. A recent survey of 2,000 Americans conducted by OnePoll and commissioned by Point found that “social media has a significant impact on spending, with TikTok and Instagram preferences.”
While the survey found that “59 percent of respondents reported that influencer posts influenced them to make a purchase from social media” and “respondents reported making more impulsive purchases from social media compared to in-store shopping” — it also highlights the elements The least talked about challenge of this “revolution” – debt.
Too easy to shop?
The ease of purchasing via the social media platform is a huge plus for the retail industry but comes with a caveat. Point’s survey found that “social media causes respondents to overbudget, spend more money than they intended, or get into debt.” Astonishing, “45% of respondents went into debt to purchase an item they saw on social media.”
As the Accenture study explains: “Any brand, big or small, can sell via social commerce, and anyone can now become or create their own ‘brand’ and get to market directly.”
Many small businesses have come to represent a more sustainable, ethical, and mindful alternative to larger companies. If independent companies can maintain this integrity and responsibility to their customers, they can triumph in the world of social commerce.
Accenture stresses that social commerce “has significant positive effects on small businesses and entrepreneurs as they can access potentially huge markets that were not available to them before.”
Moving Forward If companies make sure that they put “people” at the center of any social commerce planning and strive to meet the wants and needs of their customers on those platforms – shopping can be the delight of both retailers and shoppers.