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Social commerce in Europe: What retailers should know

by Editorial Office

Online shopping via smartphone is becoming an ever more common habit for European consumers: Further, shopping is not only done on marketplaces and traditional online stores, but also on social networks – an ascending trend. Here’s what you should bear in mind in order to meet the changing consumer habits of Europeans.

Mobile commerce in Europe

E-commerce in Europe is undergoing a transformation: local consumers are no longer just using their mobile devices to research products, they are also increasingly making purchases with them. According to market researcher Forrester, in 2020, half of all online purchases in key European markets such as the United Kingdom, Germany, and France were made via smartphone or tablet.This corresponds to a sales volume of 123 billion euros – and the trend is still rising. By 2024, m-commerce business is expected to double up to more than 265 billion euros.

Shift to m-commerce – shopping via social channels

In the course of the shift towards mobile commerce, retailers no longer reach their customers uniquely via classic online stores and marketplaces, which, at best, are available via a convenient-to-use app. Europeans are increasingly buying where they love to spend time online – on social networks.

Large social media platforms such as Facebook or Instagram already cover the entire customer journey, from discovering a product and customer reviews to direct purchase and customer service. In just a few steps, consumers can complete their order just where they have discovered a product. Particularly on the individually preferred social media channels, consumers are considered to be open to impulse purchases, which are made directly via postings or short videos in integrated web stores. With a presence on social networks, online retailers therefore increase their chances of generating more sales – as a special type of proximity and customer loyalty is key to this channel.

Social commerce: access to countless consumers

The potential is particularly great with regard to younger target groups, who have been making greater use of social networks since the pandemic. Alas, older population groups, the so-called silver surfers, have also discovered social commerce. Retailers can potentially address every active user – at the same time, the number of users of these media is continuously increasing.

Current surveys show how promising social shopping and advertising offers are: According to Instagram, the majority of shopping enthusiasts already use the network to discover products. The video portal TikTok, which originates from China and is particularly popular at the moment, reports something similar: Half of its users are said to find new products through ads within the app.

It’s not for nothing that experts believe social commerce will become a top trend in European e-commerce. According to the “Smart E-Commerce Report” conducted by UPS, the number of consumers shopping via social e-commerce channels could increase by 15 percent this year.

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Social networks continue to invest in shopping features

Social networks are constantly investing in shopping features. However, compared to the pioneering markets of China and the USA, social commerce still appears to be less established in Europe. But there is much progress: On the major social networks Facebook, Instagram and WhatsApp, new shopping and check-out functions are continuously being integrated in order to encourage consumers to make direct purchases. Not only since, but increasingly through the Corona pandemic, social shopping has also gained relevance for other social media services: For example, TikTok wants to offer its 100 million monthly active users in Europe innovative shopping experiences through a cooperation with e-commerce software provider Shopify. The main focus here is on live shopping – a business that is already enormously lucrative on the Asian market and generates billions in revenue. Products are presented live, customers ask questions via chat and, if they are interested, place an order with just a few clicks.

Pinterest and Snapchat are also working on technologies to make social commerce easier for retailers and shoppers. In this context, augmented realityis being used successfully: thanks to simulation technology, customers can virtually test shoes before buying them, for example – with positive effects on the returns rate.

Social commerce: choosing sales channels according to target group

The networks on which international retailers in Europe should be active depend heavily on their own products and target group. To get started, experts recommend using the social media bandwagons Facebook, Instagram and WhatsApp, where a particularly broad target group can be found. Retailers can highlight products which they present there anyway in shoppable formats without much effort.

Those who want to appeal to a particularly young target group should target platforms such as TikTok with its interactive video clips. The trendy app is said to have overtaken Facebook, Instagram, Messenger and Snapchat in terms of downloads last year and gives brands an enormous reach among 16 to 29-year-olds.

In order to address the target group in a customized manner and to serve user habits, retailers should get involved with the networks and the formats common there.

Using user data for individual shopping offers

Posting interesting and entertaining content on a regular basis is generally crucial to success in the social media environment. It is not possible to make general statements about the frequency with which content should be posted on which channel – and in case of doubt, high-quality content is more important than a particularly large amount of content. Nevertheless, continuity is essential in order to avoid losing followers and to win new customers.

In order to better understand European customers and motivate them to buy after having seen individualized content, it is also important to take advantage of the large amounts of data that are generated during interaction in social media. Current studies show that the adaptation of campaigns to target groups by means of data analytics leads to a significant increase in sales. 

Targeted use of influencers as sales drivers

Collaboration with local influencers is proving to be a real sales turbo: Thanks to their multiplier function, these bloggers spread the word about products and services to thousands or even millions of people. According to the management consultancy Roland Berger, one in three consumers already buys a product based on an influencer recommendation. Through personal and useful content, online opinion leaders build up a closeness to consumers – according to the motto “I like it and I’m sure you’ll like too”. E-commerce providers reach significantly more customers this way than through their own corporate channels.

To ensure that this increased visibility pays off, it is important to make sure that the influencer’s followers match the product, the company’s image, and the defined target group before entering into a cooperation.

B2B commerce: relevance of social networks on the rise

In contrast to the consumer goods sector, social commerce in the B2B environment is still in its infancy. Sales departments and sales managers are faced with the task of building their own networks in order to make products and services visible in social media. For example, the business platforms LinkedIn and XING are developing into interesting sales channels: Studies have shown that B2B companies that continuously maintain their customer relationships via social media have higher sales than those that have little presence on the social net. It has been shown that professionals increasingly transfer private usage habits to the working world. With the effect that the customer journey is determined by social media even for complex products and services.

Social commerce: agility pays off

With the growing acceptance of m-commerce, the preference for social shopping is growing among European consumers. Platforms have discovered the potential of in-app shopping and driven technological developments. Social commerce gives retailers the opportunity to motivate a large number of customers to buy directly via their personalized newsfeed.

At the same time, their social presence makes it easier for retailers to adapt their own products to trends and to optimize supply chain processes, for example through demand forecasts via social media trends.

The key success factor is to identify suitable platforms. However, as new distribution and sales channels constantly emerge and existing providers grow and add new functions – even the short message service Twitter wants to test e-commerce options – a high degree of agility is required. Changes should always be kept in mind in order to be able to adapt one’s own offering at short notice – and to generate more sales thanks to users who are eager to buy.

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