Credit: Getty Images by Tim Robberts
E-commerce sales have been on the upswing as a share of total sales since before 2000, and in the last decade, social platforms have played an increasing role. Then 2020 happened, driving an unprecedented spike in online sales. This year so far, we’re seeing social media mature as a force that drives e-commerce, in addition to emerging technologies like the metaverse and 5G. Here’s a look at how e-commerce and social media will intersect across three major platforms through the rest of 2022.
1. Instagram Retains its Leadership Position in the Social Commerce Sphere
This image-forward social platform is already a major player in e-commerce, with 72 percent of users reporting that they’ve made a purchase decision after seeing a post. Savvy brands have capitalized on Instagram’s visual-first design, placing content on the platform to keep consumers current on what’s new in stores or available online.
With a successful suite of e-commerce features and the No. 1 rank among social platforms consumers use to follow brands, Instagram is still in a strong position in terms of e-commerce and brand communication, and that’s unlikely to change in the months ahead. Keep an eye on new features on Instagram like variable focus and augmented reality (AR) tools.
2. Snapchat Plays Catchup
It may seem counterintuitive because Snapchat has a cutting-edge AR system, but the popular instant messaging app is losing ground in terms of active users relative to its competitors, and that makes it less of a player in e-commerce today. Instagram has well over twice as many active users, and TikTok has pulled far ahead, too. Snapchat remains popular with teens but has struggled to make inroads with older users, even as other apps have attracted new users.
That said, the platform’s Snap Scan AR scanning feature has much commercial potential and a reported 170 million users. Snapchat is also performing well financially: The company generated $2.5 billion revenue in 2020, a 47 percent increase over the previous year’s results, and in 2021, its stock value rose 350 percent over its 2020 performance, as reported by the Business of Apps. However, if Snapchat is going to live up to its early promise in the e-commerce space, it will have to play catchup with competitors in the months ahead.
3. TikTok is Set to Grow E-Commerce Revenue
Even though TikTok is the new kid on the social media block, the platform is showing incredible momentum, doubling the number of users more established competitors like Snapchat, Pinterest and Twitter racked up since it came on the scene. The platform’s format is a natural for influencing purchases, and this year TikTok expanded its partnerships and added a shopping tab for business users as well as new ad options, according to TechCrunch.
TikTok has catapulted everyday users into influencers with a single video. Brands of all sizes use the platform to post content about products, and online retail giant Amazon.com got in on the act by dedicating a page to TikTok user recommendations. As TechCrunch noted, popular clothing brand Princess Polly garnered a six-fold return on ad spend and increased page visits by 50 percent using TikTok. Look for TikTok to expand its foray into e-commerce in 2022 and beyond.
Keeping an Eye on Social Media-Driven E-Commerce
No one can confidently say if new consumer buying habits formed during the pandemic will endure, but the evidence points in that direction. Even demographics that had previously been resistant to e-commerce started buying online. Smart brands are looking for ways to meet consumers where they are, and increasingly that’s on social media. Even hardware is reflecting this trend. At CES 2022, the Vivo V23 handset debuted with ultra-powerful front-facing cameras and software dedicated to high-res selfies, looking to target the selfie and influencer space, capitalizing on tech dedicated to virtual clothing try-ons, filters and other capabilities.
To stay ahead of customer trends, brand managers should keep an eye on social media-driven e-commerce in the year ahead, including Instagram, Snapchat, and TikTok. That’s the best way to prepare for what comes next as new features and capabilities change the marketplace again.