In early September, when Instagram announced in an internal memo to its staffers that it planned to drastically scale back its social shopping features, and instead shift its focus towards its short-form video business, it signalled a shift in the long-term priorities of one of the biggest tech companies in the world.
Meta, the parent company of social and messaging platforms like Facebook, Instagram and WhatsApp, had previously introduced social commerce back in 2009, first allowing companies to run promotions and contests. And in 2020, Instagram launched “Instagram Shop” offering users more ways to buy products on the platform. A few months later, users in the United States could browse across their feeds, add items and checkout in one simple and seamless transaction, much like the omnichannel experience that WeChat users have been familiar with for a long time.
But now, amidst fierce competition from TikTok as well as a huge push towards other priorities like its Reality Labs division, which while currently loss-making - it reported to have lost $9.4 billion so far in 2022) still remains a huge priority for Meta, social commerce has taken a back seat to new video formats and features. However, we believe the decision to step away from social commerce is a mistake. And here’s why.
Firstly, sales via social media platforms globally are estimated to grow to $992 billion in 2022. And this trend doesn’t appear to be slowing down. By 2026, sales via social media platforms is expected to reach $3 trillion.
Secondly, the number of users that use social media platforms such as Instagram, TikTok and WeChat is continuing to grow. There are a reported 4.59 billion of total social media users across all platforms in 2022. Instagram also said that 44 percent of its users use Instagram weekly to shop with features like shopping tags and the Shop tag.
With such numbers, it’s hard not to believe that a captive audience exists on the platform and are ready for social selling.
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As we can see with TikTok, which initially launched as a short-form video sharing platform, social commerce forms an integral part of its digital strategy. The platform has shared that 61 percent of its users have engaged in e-commerce behaviours while 56 percent of users are already using the platform to discover new products or brands. With a total of 1 billion monthly active users, it could make a difference in your e-commerce business strategy.
In 2021, TikTok introduced various commerce solutions to help businesses sell across the platform. For example, the platform introduced product links allowing users to explore featured products without leaving the app. The platform is currently testing a pilot program in certain markets named “TikTok Shopping”. Some companies now have the opportunity to upload their product catalogue into a dedicated section on their TikTok’s profile, allowing them to easily reach users.
Our colleagues from DLG China, who have been working with various platforms like WeChat and Douyin (the more advanced version of TikTok in China) on their social selling strategies well before TikTok became mainstream in the West, can attest to the importance of developing these features for audiences eager to engage with brands through social selling.
“While Chinese consumers have long been used to acquiring services and purchasing products with WeChat Pay – the in-platform one-stop payment solution on WeChat – it is worth noting that WeChat commerce is fueled mostly by a brand’s ability to activate its private domain, rather than social activities. Naturally, brands started to recognise WeChat as the backbone of their DTC ambitions in China. Till today, there is still no Western equivalent to WeChat,” says Pablo Mauron, Partner & Managing Director China at DLG (Digital Luxury Group).
“Douyin, on the other hand, has successfully managed to make the concept of social commerce take off. Through content that resonated with Chinese shoppers, the platform built intimacy and trust with consumers over time, driving them to spend on the social plaform,” he adds.
In China, where social selling is even more established, WeChat users have purchased within the app for many years. Since the birth of “WeChat Shop” in 2014, users are now able to shop directly within the app via a mini-programme and their WeChat wallet. Unlike Facebook or Instagram, posts do not appear in the main social feed of the platform but in the chat interface, providing more information about the product and availability.
“Above and beyond pure transactions, what makes WeChat more crucial to brands is the private domain built within this ecosystem,” Mauron believes. “WeChat isn’t just for one-time purchases; it can engage onboarded customers and prospects throughout the consumer journey. Faced with the re-opening of the Chinese market, brands with an established CRM infrastructure can influence their core consumers with an intention to purchases outside of China.”
We looked into 20 brands in the luxury industry ( spanning watchmaking/jewellery, beauty, and fashion) and gathered the best practices so that as a leader in the luxury space you are equipped to leverage:
In conclusion, brands shouldn’t approach social commerce as a simple distribution channel for their collections and products. Instead, they should rather leverage it as a means to tell compelling stories to their communities, where they are already spending a significant portion of their time and attention.
Offering an immersive experience is extremely important, especially at a time when consumers expect to be taken on a digital journey that appeals to all their senses. If your community can discover your products in an engaging way and even project themselves wearing them (e.g. wrist shots, model wearing specific clothes, lipstick on different skin shades, etc…) they will feel more connected to your brand universe and their shopping experience will be seamless. The goal should be to mirror the in-store experience.
But don’t forget that it’s still important to get the basics right. Facilitating the online purchasing process by enabling users to see stock quantities, back-in-stock timings and the possibility of sending a message regarding a specific product are all essential features. Some of our recommendations still apply even if e-commerce is not part of your plans.
Providing an immersive brand experience through social commerce is still valuable and appreciated by the community. Not to mention it drives interest, desirability, and store footfall. Meta may be pulling back, but you shouldn’t be.
Welcome to DLG Insights, a new series of articles written and produced by our parent company's in-house experts. At DLG, we firmly believe in the future of social commerce and the opportunity it represents for brands. If you are a luxury or lifestyle brand that is interested in speaking with us about it, you can contact us here.
For this article, our team members Laura, Salohi and Teresa combined their knowledge of different aspects of marketing, working together to produce this piece. You can read more about each of them in their bios below.
Laura Capaldi is a Social Media Executive at DLG, based in Geneva. She has previously worked for the French luxury swimwear brand Vilebrequin where she was in charge of creating and monitoring Facebook and Instagram online acquisition campaigns. In addition to being an expert in organic but also paid social media, she is passionate about digital marketing and how it closely impacts our society.
Salohi De Laere is a Senior Data & Analytics Manager at Digital Luxury Group, based in Geneva. She has helped more than 20 luxury brands to nurture their decision-making processes by collecting reliable data. This includes tagging audit, website & media tracking and ongoing website optimisations.
Teresa Zipsin is a Senior Account Manager at DLG, based in Geneva. She is responsible for advising and supporting leading brands in the luxury industry on how to translate their business and marketing objectives in the digital universe.