The Evolution of E-Commerce: From Online Shop to Social Shopping

Social Commerce in Europe

Unsplash/Brooke Lark

If you want to sell successfully online in 2020, you need to do more than just keep your shop technically up to date. Social commerce is changing online commerce worldwide – and quite fundamentally. We explain how you, as a retailer, can successfully enter the world of social commerce and realize your potential on the European market.

Convenience – that’s what the customer wants when purchasing online, isn’t it? Online shoppers don’t need to travel long distances, look for a parking space or make their way through crowded stores. They can shop anytime and anywhere in the world as they please. Whether the goods originate from their own country or from abroad is increasingly irrelevant for Europeans. An important key to a successful e-commerce business, therefore, is to provide users with maximum accessibility. Nevertheless, an excellent online presence, via a platform or owned shop, will no longer be sufficient in future. Social shopping is the new direction that retailers should increasingly focus on.

Online shopping becomes social

“All shopping is social” – the globally active American market research institute NPD puts it in a nutshell, meaning that social interaction – especially with friends, acquaintances and influencers – accompanies every purchase. People exchange opinions before they buy something and tell each other about their experiences after the purchase. This exchange is also increasingly taking place in social networks. Around 3.5 billion people worldwide, 45 percent of the entire population, use social media. The fact that commerce has meanwhile discovered this channel is a logical consequence and thus, the birth of social commerce.

Entering Social Commerce

But how can internationally active traders enter European social commerce? The good news is: it’s very simple. After all, the social networks on which potential customers can be found are already in place, well developed and heavily used in Europe. The social media themselves are increasingly opening up to retailers and brands. Not only in terms of advertising or marketing, but direct sales, as well, have become more important in almost all European countries.

Thus, there is nothing standing in the way of entering into cross-border social commerce in 2020. On the contrary: social commerce has the power to reach people directly through their interests, preferences, friends and peer groups. This is particularly attractive for entrepreneurs who want to become active abroad and reach new customers.

5 tips for getting started in European social commerce:

  • Defining the strategy

However low the barriers to entering social commerce may be, the first step to generating sales in social networks must be a defined social commerce strategy.

  • Finding the right platform

What are the preferred social media of your customers? Detailed knowledge about the behavior and preferences of your target group gives you the opportunity to identify the right platform for your activities. For some target groups, this can be several platforms.

  • Customizing to the platform

Select your offers and contents both suitable and exclusive for the respective platform. The goal should not be to map the entire product portfolio in social commerce. A clear, pointed selection is more target-oriented in social media than an overwhelming abundance of purchase options.

  • Building your own brand

Online shopping is always closely related to trust, social shopping even more so. That is why building trust is important. Through ratings and rankings from customers or an active community you present yourself as a trustworthy partner.

  • Simplifying the purchasing process

Users who are active on social media do not visit them primarily for shopping, but for entertainment and social interaction. To avoid a cancellation, a purchasing process should therefore be particularly easy and quick to carry out. A few clicks to complete the purchase, optimization for mobile devices and clear calls to action improve the conversion rate.

The most important platforms for social commerce in Europe

Europe is a very heterogeneous market: As diverse as the people are, so are their social media preferences – accordingly, there is no such thing as a “one size fits all” solution for social commerce.

We present the three most important platforms for social commerce in Europe: In addition to the social media veteran Facebook, the photo platforms Instagram and Pinterest deserve special attention. The latter are actively working on driving social commerce with new features and bringing shopping functions already used successfully in the USA to the European market.

  • Facebook

Facebook is the pioneer among social networks. Published in 2004, the network is widespread in Europe and is also an ideal contact point for social commerce due to its high profile and extremely wide reach. Users network with their friends and acquaintances and follow the activities of companies, media or public figures. In addition, users also organize themselves in interest groups and forums. The components of social exchange, entertainment and information gathering are closely interwoven. Facebook itself has no thematic focus whatsoever, so the network can basically be used by any company for marketing and sales activities.

Advertising formats are well established and the services for targeting content are well developed. Setting up social shopping on Facebook is very simple: companies can, for example, link directly to their web shop by clicking on the “Buy Now” button on their Facebook page or they can (additionally) set up a shop category as a subpage. There, Facebook users can find specific articles and product information. Those who want to buy can be retargeted directly to the product page of the selected article.

140 million companies worldwide have recognized the potential of the platform for themselves and are active on Facebook with at least one company profile. According to the Group, in the fourth quarter of 2019, around 1.65 billion people worldwide used Facebook every day; Europe counted 294 million daily users. In addition, 394 million Europeans use Facebook at least once a month.

  • Pinterest

The visual search engine Pinterest is a particularly interesting platform for fashion, home goods and other industries that function strongly on the image level. Since 2010, users have been collecting and sharing their inspirations in virtual pinboards and also use Pinterest directly to search for products. Pinterest itself states that 83 percent of users have already made purchases based on Pinterest content. According to Statista, 335 million people worldwide used Pinterest at least once a month in the fourth quarter of 2019, and about three-quarters of users are located outside the USA.

Due to its thematic focus on images, Pinterest has been very close to the retail sector from the very beginning and is already well developed in its ability to sell directly via the platform. A catalogue function was added to the pins for individual products in autumn 2019. It makes it easier for retailers to upload and link their entire range of products. The catalogue function is still under construction and is not yet available worldwide. However, selected partners such as IKEA or the German mail order giant Otto can already use it in important European markets

  • Instagram

Instagram is the network of influencers – yet ever since its launch in 2010, it has also been used by major brands for self-expression. The platform, which is characterized by a mixture of pictures or videos combined with microblogging, belongs to the Facebook group. In June 2018, the company announced that the platform is now actively used by 1 billion people worldwide.

According to eMarketer, Instagram is the social network with the second highest level of involvement after Facebook. It particularly attracts younger target groups: according to Statista, 71 percent of users are under 35 years of age. Similar to Pinterest, the platform is also used explicitly for product information and offers not only advertising but also the creation of so-called shoppable posts. In these posts, displayed products can be stored with a price tag and a link to the shop. Furthermore, in 2019, Instagram introduced the checkout function as a beta version in the USA. With this option, products can be purchased directly in the app without leaving Instagram. Even though this function has not yet been introduced in Europe, the potential for sellers seems to be huge. According to Instagram, shopping articles are accessed 130 million times per month.

Sources: eMarketer, Statista, corporate claims.

 

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