社會(huì)商業(yè)正在重塑在線購(gòu)物

SocialCommerce

IsRemakingOnline

Shopping

March2023

BySherryWu,RayYu,OlofDarp?,YunlingZhou,LinAn,andThomasZou

2SOCIALCOMMERCEISREMAKINGONLINESHOPPING

SocialCommerceIsRemakingOnlineShopping

There’snodenyingtheappealofe-commercetotoday’sconsumers.Therapiduptakeofthisradicallynewformofshoppingoverthepastcoupleofdecadeshasbeennothingshortofextraordinary.

Butforallofe-commerce’sadvantages—convenience;variety;theabilitytocomparesellers,products,andprices;endlesscybershelvestoexplore—itstillhasfallensomewhatshortwhenitcomestobrands’abilitytobuildpersonalrelationshipswithshoppers.

Untilrecently,thatis.Theemergenceofsocialcommerce—anincreasinglypopularoffshootofe-commercepropelledbyapowerfulmixtureofcommunityandcommunication—ismakingonlineshoppingamuchmoreinteractiveandintimateexperience.

Socialcommerceisarelativelynewidea,onethathascaughtonquicklyinChinawhilemakingsubstantialinroadsinWesternmarkets.Itcanbedescribedasashoppingexperiencebuiltaroundsocialinteractionsamongpeoplewithsharedlikes,habits,hobbies,andbehaviors.Assuch,it’saperfectcommercialcomplementtothediscussions,chatter,andsharingthattakesplaceonsocialmedia.Ifdoneright,socialcommerceultimatelybenefitsconsumers,techplatforms,andbrands

(seeExhibit1):

?Forconsumers,socialcommerceopensupmoreseamless,convenient,andnovelshoppingformatsandexperiences.

?Fortechnologyplatforms,socialcommerceprovidesincreasedrevenueopportunitiesbyallowingbrandstoleveragemultiplepartnershipsandimplementnewshoppingfeaturesthatarenaturalextensionsoftheirsocialmediaofferings—thusenablingamoreauthenticandvaluablecommercialrelationshipwithconsumers.Techplatformscanalsobenefitfromopportunitiestocollectdataaboutconsumerbehaviorsandpreferences(fromuserswhogivetheirapproval)aswellasfromheightenedconsumerengagementandstickinessontheirsitesasaresultofbrandmembershipsandloyaltyprograms.

?Forbrands,socialcommerceoffersnewchannelsandformatstoconnectwithconsumersandgainabetterunderstandingoftheirneedsandhowtofulfillthem.Withsocialcommerce,consumerscanbereachedwheretheyalreadywanttobe—which,inturn,makesthemmorereceptivetoproductrecommendationsandpurchasingideas.

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Exhibit1-TurningConsumers’OnlineInteractionswithBrandsintoDigital

Transactions

Atypicalsocial-commerceexperience…

Chattingwithmerchants

Time

elapsed

(mins)

Seamless

Personalisedproduct

placement

Time

elapsed

(mins)

"discoverytopayment

tofurtherdiscovery"

In?uencertagsproduct

Checkingsocialmedia

Seamlesscheckout

Browsingproducts

Starringitems

09:00

11:30

10:05

16:00

18:00

19:00

12:00

20:00

SOCIALCOMMERCEIS

Purchasingonsocialmedia

Seamlessjourneyfromdiscoveryonsocialmediatopurchase

Buyingthroughareferralprogram

Livestreamshoppingevents

Source:BCGanalysis.

SOCIALCOMMERCEISNOT

Socialmediamarketing

Searchingforgoodstobuyonline

Sendingoutemailnewsletters

Browsingproductsinanonlineshop

4SOCIALCOMMERCEISREMAKINGONLINESHOPPING

0.9

16%

84%

0.11

+25%CAGR

0.06

+5%

CAGR

Socialcommercecomesinmanyforms.Itcouldbeaninfluenceronsocialmediawaxingenthusiasticaboutaparticularbrandofclothingheiswearingorravingaboutanewalbum,withalinktoashoppableadforseamlessone-clickpurchase.Oritcouldbecommunity-based—ahobbygrouporaneighborhoodchatboarddiscussingaparticularproductthatcanbepurchasedinstantly,withmembersofferingtheirreviewsandexpertiseabouthowtobestuseit.ItmighttakeplaceonInstagram,Facebook,TikTok,oranysocialmediasite.Anditcouldbeasshortasa30-secondvideooraslongasanongoingseriesofhow-tosessionsaboutaparticularproductcategory.

Lizanne,a28-year-oldlivinginBerlin,isatypicalsocial-commerceearlyadopter.Whenshewakesup,thefirstthingshechecksisherphone.Scrollingthroughherfeed,sheseesfriendsandinfluencersshefollowsposinginclothingandjewelry,someofwhichdovetailwithherpersonaltastes.Beforesocialcommerce,Lizannewouldhavetoscrollthroughthecommentssectiontoseeifsomeonenamedtheproductordesigner—andevenifsomeonedid,shewouldthenhavetodoawebsearchtofindouthowtobuyit.Often,shejustmovedontoanotheronlineactivity.Butnow,tagsonthephotosleadherdirectlytothebrand’sInstagrampage,whichhasalltheproductsshesawlinedupinitsInstagramshop.Justacoupleof“taps”leadhertocheckout,andshe’smadeherpurchase.

AsLizanne’sstoryshows,socialcommercemovesthesellingmodelfromthebuyerfindingtheproducttotheproductfindingthebuyer—leveragingpersonalizationasthesocial-mediaalgorithmlearnsfrombrowsingbehavior.Companies,however,havetofindtheirownsweetspotanddeterminethebestsocial-commercemodelsfortheirbusinesses,brands,products,andoperationalcapabilities.Laterinthisreportwewilllookatfourpossiblesocial-commercearchetypesforcompaniestoconsider.

SocialCommerceIsTakingOff

Asearlyas2016,socialcommercebegantobeapopularshoppingoptioninChina.By2021,thevolumeofsocial-commercetransactionshadgrownby52%tomorethan$350billion,orabout13%ofChinesee-commercesales,from$43billionfiveyearsearlier.AccordingtoaNielsenChinasurvey,80%ofimpulsepurchasesinChinawerebasedonsocialrecommendations.

SocialcommercehasbeenamorerecentphenomenonintheWest;evenso,between2021and2025,transactionvolumesintheUSandEuropeareexpectedtogrowby33%and25%,respectively

.1

(SeeExhibit2.)

Andglobally,socialcommerceisforecasttoreach16%ofe-commercesalesby2025.

Exhibit2-SocialCommerceIsaRapidlyGrowingSegmentofE-Commerce

Totalsales

+26%CAGR

$7.1T

Totalsales($trillions)

+33%CAGR

+26%

CAGR

$5.2T

9%

91%

20212025(projected)

US

2025(projected)

Europe

China

Nonsociale-commerceSociale-commerce

Sources:eMarketer;Forrester;Statista;BCGanalysis.

1.CAGR.

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TherearefourprimaryreasonswhysocialcommerceisheadedforacceleratedgrowthinWesternmarkets,andtheycloselyparallelthedynamicsbehinditspopularityinChina.

(SeeExhibit3.)

First,purchasingpowerisexpandingforsocial-networkusersfromages18to24,whoaremostinclinedtoengageinsocialshoppingexperiences.Second,technologyprovidersareinvestingheavilytointegratecommercialandsocialfeatures,blurringthelinebetweenthetwo.Moreover,techfirmsareabandoningthe“walledgarden”approach—inwhichtheymainlyprovideproprietary,closedplatformsforcommercialactivities—andarejoiningforceswithspecializedserviceproviderstoreachwideraudiences.Forinstance,YouTubehasintroducedliveshoppingprogramsandan“explore”tabwithshoppablecontentinpartnershipwiththee-commerceplatformShopify.

Third,leadingbrandsaredevelopingsocial-commercestrategiestoconvertusersofsocialmediaintopayingcustomers.Forinstance,Cluse,aUK-basedjewelryanwatchcompany,increaseditsoverallconversionrateofpeoplebrowsingtoactualsalesby19%whenitattachedrelevantshoppable-productphotostoitsInstagramlookbook.

Fourth,moneyispouringin.Investmentsinsocialcommercearegainingtractionasprivateequityfirmsbetonastrongfutureforthetechnology.In2021,therewere109dealsinvolvingsocialcommercecompanies,representingsome$8billionincapital—comparedto49in2016,involvinglessthan$1billion.

Thoseprospectsforgrowthcomewithafewcaveats.Policiesandregulationsaroundsocialmediaareevolvingasthedebatesoveritspowerandperilscontinue.Accesstosocial-mediaplatformsisalsosubjecttogeopoliticalforces—TikTokisunderregulatoryscrutinyintheUS,forexample,andisbannedincertainjurisdictionsthere,whileMetaanditsproductscannotbedownloadedinChina.Asmarketingleadersconsidervarioussocial-commerceopportunities,itisimperativethattheykeeptrackofongoingdevelopmentsthatmayaffecttheaccessibilityofcertainplatforms.

Exhibit3-TrendsDrivingSocialCommerce’sGrowthinWesternMarkets

Brandstestingthewaters

Retailersandbrandsaretakingmajorstepstowardnewwaysofsellingtheirgoods

Demographicand

behavioralshifts

Increaseinpurchasingpower

ofyoungerdemographics

Investmentfuelingtherace

Highvaluationofsocialcommercecompaniescreatesmomentumforfurtherdevelopmentsinthespace

Theevolvingtechlandscape

Newsocialmediafunctionalitiesenable

socialcommerceandcreatenewsales

opportunitiesforbrandsacrossplatforms

Source:BCGanalysis.

6SOCIALCOMMERCEISREMAKINGONLINESHOPPING

HowtoGetStartedinSocialCommerce

Companiesshouldviewasocial-commerceeffortasanewapproachtotheirexistinge-commerceprograms—awayofincreasingtheeffectivenessofthoseprogramsbydirectlyaddressing,inanentertainingfashion,howtheirproductsmeetcustomers’needs.Indeed,asalaunchingpoint,brandsandretailersmustfirstfocusonupgradingtheircoree-commercecapabilities.Thisincludesboostingtheirsocial-mediamarketingproficiencyanddrivinge-commerceandmarketingintegrationbyinitiatingsmall,focusedpilotsonchosensocialplatforms.

Testingthewaterswithtargetconsumersiscrucial.Thesefirstcampaignscouldincludeshoppablelinkson,say,InstagramorPinterestaswellasrewardprogramsthatofferdiscounts(orawardpoints)ifacustomer’sfriendorfamilymembermakesapurchasebasedontheirrecommendations.

Inthisphase,companiesshouldplanttheseedsfortheirmoreadvancedsocial-commerceeffortsbyaddressingthreepotentialobstacles:

?RegulatoryConstraints.Tooffsetexistingandemergingdata-privacyregulations,brandshavetobecreativeinofferingrewardstoconsumers(suchasdiscountsonfuturepurchasesoraccesstofullfunctionalityofthesocial-commercesite)inreturnforpermissiontocollectdataabouttheironlineactivities.

?TechnicalBoundaries.Antitrackingmeasurescanimpedethepersonalizationofproductrecommendationsandpreventaseamlesssocial-commerceexperience.

Todriveuserengagement,brandsthereforeneedtobecreative—exploringstrategicpartnershipswithtechgiantsandexpandingtheirdatacapabilitiestocreatecomprehensivecustomerprofilesthatenhancerecommendationsandsimplifyshopping.

?ConsumerSentiment.Sketchybehaviorbyaninfluencer—takinganoxioussocialstance,forexample,orengaginginuntowardpublicactivities—cantriggernegativeattitudestowardsasocial-commercesite.Toavoidthat,companiesmustmakeagreementswithinfluencersandotherchannelpartnerscarefully,focusingonthosepartners’suitabilitytothecompany’sbrandimage.Andcompaniesshouldreviewthesearrangementsfrequentlytomakesurethattheyremainappropriate.

NextStep:AdvancingtheSocial-CommerceProgram

Ifthefirstphasewasaboutestablishingthebasicparametersofthesocial-commerceinitiativeanddippingtoesintothewater,thisadvancedphaseinvolvesdevelopingtheinternalteams,processes,skills,andstructurethatwillberesponsibleformaintainingandexpandingthesocial-commerceeffort.Threecategoriesofcapabilitiesshouldbeaddressed:foundational,operational,andstrategic.

(SeeExhibit4.)

Foundationalcapabilitiescoverthecoreenginethatdrivesthesocial-commerceprogram.Theseincludeanagilesupplychainthatcanrespondinstantlytochangingsocialtrends,anorganizationalculturethatsupportsboldinitiativesandcross-functionalcollaboration,andamodernITorganizationthatcanturndigitizationanddatamanagementintoacompetitiveadvantage.

Operationalcapabilitiesshouldbefocusedonsuccessfullyimplementingsocial-commerceactivitiesonadailybasis.Todothat,themarketingteammusthavestrongsocial-mediaknow-howandcontent-creationskills—andtheabilitytorapidlyidentifyandactononlineopportunitiesbasedonchangingtrendsandalteredconsumerpreferencesandbehaviors.Tounderstandcustomersentimentandpromoteproductsthatconsumerswant,marketersmustlistencloselytocommentsandreactionsontheplatformandevencollaboratewithloyalcustomersinmakingsocialcommercemarketingdecisions.Thesalesteammustseebeyondshort-termsalestargetstocollaboratewithmarketinginusingsocialcommercetocapitalizeonsudden,unanticipatedmarketshifts.

Strategiccapabilitiessafeguardthelong-termvisionofthecompanyandmakesuretheorganizationalignsthesocial-commercestrategywiththeoverallchannelstrategy.Socialcommerceismorethananothersaleschannel—itisashiftinhowabusinessoperates,offeringamoreunifiedapproachthatbringstogethersupplychain,marketing,sales,andcustomerinteraction.

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Socialcommercestrategy

Socialcontentcreationanddistribution

Customerrelationshipmanagement

Revenuemanagement

Sociallistening

Agiledistributionandlogisticsnetwork

Independentsocialcommerceteam

FOUNDATIONAL

Businessandsystemintegration

Socialdataplatformgovernance

Exhibit4-TheCapabilitiesCompaniesNeedtoImplementaSuccessfulSocialCommerceProgram

STRATEGY:Makeitmorethanachannel

Overallchannelplanning

STRATEGIC

MARKETING:Leveragesocialmediaknow-howandactivatebest-?tmodel

In?uencermanagement

Platformmanagement

SALES:Optimizeoperationsandrevenuemanagement

OPERATIONAL

Salesoperations

PRODUCT:Cocreatewithconsumers

Newproductcocreation

Pilotingwithloyalcustomers

SUPPLYCHAIN:Buildagilitytorespondtosocialtrends

Warehouseandtransportcapacity

Last-miledelivery

ORGANIZATION:Createopennessforinnovation

Newrewardsandrecognition,incentives

Innovationmindsetandsocialsensitivity

IT:Drivedigitizationandenableprecisesocialnetworking

Digitalproductdevelopmentability

AI,big-dataanalytics

Source:BCGanalysis.

8SOCIALCOMMERCEISREMAKINGONLINESHOPPING

FourSocial-CommerceArchetypes

Oncethebasicunderpinningsofasocialcommerceprogramarebuilt,companiesneedtodeterminetheessentialfeaturesandcharacteristicsoftheirsocial-commercepresence.Theyneedtoanswerthequestion:Basedonourproductline,marketlane,andcustomerbase,whatisthebestsocial-commercemodeltodrivesalesandexpandourreach?Wefoundthattherearefourarchetypesforcompaniestochoosefrom

.2

(SeeExhibit5.)

Archetype1:InfluencerSocialCommerce

Influencersreachfollowersthroughnumerousonlineformatsandplatforms—andcanpromoteproductsandbrandsbypostingpictures,stories,andholdinglivestreamsessions,toutinghowtheyuseorweartheseitemsintheirdailylives.Influencerrecommendationsareapowerfullureformanyconsumers;accordingtoanumberofstudiesofthe“electronicwordofmouth”effect,consumersaremorelikelytotrustinfluencersthanacommercialadvertiser.Influencersocialcommerceisparticularlyimpactfulforcompaniesmarketingluxury,fashion,andbeautyproducts—itemspeopleoftenassociatewithrichandglamorouscelebrities,athletes,andhipmusicstars.

Somecompaniespayinfluencerstopromotetheirproducts;otherswineanddinethemandofferfreebies.Butwhicheverapproachisused,disciplinedinfluencermanagementiscrucial—includinghelpingtheinfluencerformulateuniqueandtargetedinteractivecontent,presentations,andpoststhathavethegreatestlikelihoodofbeingsharedamongthemostvaluablegroupsofpotentialcustomers.Andcompaniesmustbeespeciallycarefultomonitortheinfluencer’spublicpersonaandsocialmediacomments,makingsuretheyrepresentthecompany’scorevalues.

Whenworkingwithinfluencers,businessesshouldalsobeawareof“push”and“pull”strategies.Pushinvolvesinfluencerswithamassivefollowingspooningoutcontenttotheirnetworks—anapproachthatfavorscreatorsoverthecontenttheyproduce.Bycontrast,apullstrategywouldbecenteredoninfluencerswithasmallerfollowing,whononethelessofferthetypeofviral,creative,andcrowd-pleasingcontentthatasocial-mediaalgorithmwouldpickup,distribute,andpromoteduetoitsqualityandstickiness.Companies’investmentsincontentcreationshouldsupportboth“preciousbutfew”and“shortlivedbutabundant”contentwhilemakingsuretoavoidbranddilutionascontentvolumeandthenumberofcreatorsandinfluencersincrease.

Exhibit5-TheFourSocialCommerceArchetypes

ARCHETYPES

In?uencer

commerce

SOCIAL

INTERACTION

Celebrity,in?uencer,or

subcultureleadersand

fans/followers

SOCIALCOMMERCEPLATFORM

Livestream/linksplacedinpostsorvideos

COREVALUE

PROPOSITION

Desirability

Peer-to-peercommerce

Connectedpeers

(friends,relatives,and

otherconsumers)

Linksandgroup/personalchatapps

Trust

Occasion

verticals

Occasionsandlifestages

E-commercewithinverticalapps

Consumer’s

needismet

Interest

based

Peoplewithsimilarinterestsandattitudes

Direct-to-consumer

apps/programsor

platformstorefronts

Senseofbelongingandful?llment

Source:BCGanalysis.

2.InChina,thereisafiftharchetypeaswell,calledcommunitybuy.Withthisapproach,peopleinanapartmentcomplextypicallyformshoppinggroupsthatshareideasaboutproductspromotedonsocial-commerceapps,suchasPinduoduo.WhilehighlypopularinChina,communitybuyisnotarelevantorlucrativeoptionforWesternmarkets,wherepeoplegenerallyliveinlessdenselypopulatedurbanareasandfrequentexchangeswithneighborsarenotascustomary.

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Revolve,afashione-tailer,usesanetworkofmorethan3,500influencers,whoreceivefreeclothingandinvitationstoexclusivesocialeventsinexchangeforsharingtheirloveofRevolveproductsonline.WithlinksontheirpagesthattakeconsumersdirectlytoRevolve’sInstagrampageandpurchasingchannels,influencersdrivesome70%ofRevolvecompanysales.

TheonlinefurnitureretailerMtakesamorelow-keyapproachtosocialcommerce.Itusesso-calledmicroinfluencing,whichconsistsofcustomer-generatedcontentshowinghowMade’sproductsfitintotheirhomedécor.In2020,MadeaddedautomaticbiddingonproductsonitsPinterestsite—andincreasedrevenueby250%.

Archetype2:Peer-to-PeerSocialCommerce

Peoplearefourtimesmorelikelytopurchaseaproductwhensomeonetheyknowtellsthemaboutit,accordingtoNielsensurveys.Thus,networksoffriends,family,orcoworkersareexcellentcenterpiecesforsocial-commercecampaigns.Sincewordofmouthalreadyexistsinmanymarkets,companiesneedtocommerciallyscaleitandencourageitonline.

Inpractice,thatmeansextendingconsumers’onlineengagementwiththeproductandbrandbyofferingthemappealingloyaltyprogramsandrewardsforconvincingtheirpeerstoconsidertheitemsaswell.Inaddition,companiescouldinvolvetheircustomersinproductcocreation.Andtheymusthaveeffectivecustomerrelationshipmanagement(CRM)systemsthatconstantlyreachouttoproductpurchasers,collectfeedback,ensurehighsatisfaction,andtakenoteofwhatproductsandfeaturestheirbestcustomerswouldwanttosee.

Allofthesestepscanpropelproductrecommendationswithincirclesoffriendsandfamilies.Generally,sellersofmorepersonalitems,suchasbabyorbeautyproductsorhouseholdappliances,coulddowelladoptingthepeer-to-peersocial-commercearchetype,essentiallypiggybackingontherelationshipscustomersalreadyhave.

USbeautybrandGlossier,whichtargetswomenaged18to35,uses“realmodels”—itscustomers—topostitsproductsonInstagram,usingdigitalwordofmouthtoconvincefriendsandfamilymemberstopurchaseGlossierproducts,oftenatadiscount.Inreturn,thesecustomer-models,whosereferralsdriveasmuchas70%ofGlossier’sonlinetraffic,earnpointstowardfutureorders.

Forcompaniesthathavealimitednumberofrepeatcustomers,suchasUSfurnitureretailerBurrow,thepeer-to-peermodelcanstillbeincentivized.Insteadofdiscountsonfuturepurchases,Burrow,whichprimarilysellscouchesthatfeaturetool-freeassembly,givessupportersthird-partygiftcardsiftheyattractnewcustomerswithphotosanddescriptionsofthecompany’sproducts.

Archetype3:OccasionVerticals

Thistypeofsocialcommerceisrootedinsolvingaconsumerneed.Anoccasion—forinstance,aholiday,becomingafirst-timeparent,orgettingmarried—triggersindividualstosearchforadvice,community,products,andservicesthatcanhelpthemnavigateanoftenbusyandpotentiallyoverwhelmingmomentintheirlives.Social-commercesitescanofferperfectone-stopsolutionsforsuchoccasions.Fully40%ofallpurchasesareoccasionrelated,andspendingontheseitemsis33%higher,onaverage,thanspendingonmoreroutine,everydayshopping.

Tocapturethisopportunity,companiesmustbesmartandflexibleaboutwhichproductstheyofferontheiroccasionsites.Andtheyshouldbepreparedforlargeswingsindemandastrendschangefor,say,whatnewbornswearorwhichbirthdaygiftsaremostpopular.Also,it’simportanttonotethatdifferentoccasionsinterestdifferenttypesofconsumers;choosingasocial-mediaplatformforanoccasionsitethatattractsthetargetaudienceisthereforeessential.Forinstance,whenmarketingdressesforaSweet16party,itmakesmoresensetosetupshoponateen-magnetsocialplatformlikeTikTokthan,say,Facebook,whereparticipantsskewolder.

Onerecent,successfuloccasionverticalwaslaunchedbyUS-basedJane,theboutique-fashionandhome-décormarketplace,whichin2021conductedacustomer-profileanalysistodeterminewhichofitsproductswerelikelytobemostpopularduringtheholidayseason.Basedontheseresults,Janecuratedaseriesofproductcollectionstopromoteinaholiday-themedonlinesiteusingsearchengineoptimizationandliveshoppingevents—andattracted675,000visitorsbetweenNovemberandDecember,generating$365,000insales.

10SOCIALCOMMERCEISREMAKINGONLINESHOPPING

Beyondoccasions,lifestagesarealsoexcellentchoicesforsocialcommerce.KyteBaby,whichsellsbabyclothingmadefrombamboo,givescustomersthatusethe“#GrowWithMe”hashtagonTikTokandInstagrampointsforrewardsanddiscounts.Ontheseandothersocialmediaplatforms,parentscanfindKyteBaby’sshop,parentaladvice,exclusiveoffers,andsneakpeeksatnewcollectionsaswellasmonthlycalendarslinkingtoliveshoppingeventsandupcomingspecials.

Archetype4:Interest-BasedSocialCommerce

Thisarchetypeissimilartopeertopeer—itinvolvesfamilyandfriendsrecommendingideasforpurchases—butitismuchmorenicheorhobby-and-lifestyleoriented.Natureloversorfootballfans,dogfanciersorautomobileenthusiasts,onlinegameplayersandpeoplewhocan’tgetenoughofchess—alloftheseinterestshavetargetedcommunitiesandareperfectforsocialcommerce.Ahikingsitecouldbeaplacewherehikersexchangetipsontrails,goodplacestolegallycamp,andtypesofequipmentneeded;itcanalsobeaplacewheretheyshareexperien