We recently surveyed 400 senior marketing leaders across four industries (retail, consumer packaged goods (CPG), financial services, and technology) to better understand the motivations behind including – or not including – social commerce as part of an overall brand marketing mix and the benefits that it can provide.
Our research showed that while many businesses are still in the early stages of leveraging social commerce, the majority of respondents see it as an important marketing initiative, are already implementing it within their digital strategies, and will be investing more in it in the coming years. Let’s dive into some of the trends we noticed that brands should be aware of as they consider how social commerce can impact their broader marketing efforts.
#1 – Digital marketing and social commerce investments will consistently increase in the coming years
Unsurprisingly, CPG and retail brands spend more on digital marketing activities than those in financial services, but marketers across all of the industries we surveyed recognize the importance of social commerce. 76% of all respondents indicated they believe social commerce is an important initiative, and 99% have already invested or have plans to invest in it. We also found that from 2021 to 2023, there will be a 19% increase in social commerce budgets.
Across all industries, organizations are investing more into social commerce and realizing the many benefits that will help take their business to the next level. It is important to start investing now, as there will be an emergence of new platforms, capabilities, and tech and service solutions.
#2 – Brands have many reasons to invest in social commerce, and these vary by industry
Each industry we looked at expressed their own unique reasons for investing in social commerce. Overall, increasing reach was the most important with 44% of all respondents citing it as a factor in their decision. Other reasons for investing include driving more engagements (32%), more profits (30%), creating an easier consumer buying experience (26%), and improving discovery and intent (26%).
CPG marketers say they primarily leverage social commerce for mid-to-bottom-funnel activity and believe it complements influencer efforts, whereas retail brands use it at the top and middle of the funnel to increase awareness, interest, and consideration.
Both technology and financial services brands used social commerce to ease consumers’ buying journeys in upper- and mid-funnel marketing activities that are geared toward increasing awareness and consideration.
#3 – All industries we surveyed are receiving the majority of the value they have been expecting from their social commerce investments
Across all industries, the leading benefit that brands have received from social commerce is reaching new customers in an affordable manner (47%). They’re also building relationships and collecting customer data and feedback (46%) and reaching customers in the places that matter to them (43%).
When we broke it down by industry, we discovered a few surprises. CPG found the top benefit of social commerce was building relationships and collecting customer data and feedback, which actually did not line up with their top reason for investing (obtaining more profits).
The number one benefit retail brands see is their ability to reach new customers in an affordable manner. Because lower costs were not the primary reason these businesses invested in social commerce, it demonstrates that these marketers are receiving more value than they initially anticipated.
Using social commerce, financial services have been able to remove friction points and increase the speed from discovery to purchase. And again, while the primary benefit these brands experience is the ability to reach new customers in an affordable manner, driving lower costs was NOT a reason they decided to invest. And lastly, technology brands are benefiting more than any other industry on reach, engagement, and measurement.
#4 – However, just because brands are investing in social commerce, that doesn’t mean they are experiencing success in every area
While brands are utilizing social commerce, they still face a number of challenges. Of those respondents who are already investing, the primary difficulty they experience relates to rules, regulations, and privacy issues (35%). This is likely due to data deprecation initiatives that both brands and platforms are advancing within the data and media landscape.
Additional challenges brands are working through involve establishing the right content strategy (34%), creating shoppable content (33%), and data and analytics, such as identifying the right audience strategy (33%) and measurement (32%). Because social commerce is in its infancy, it’s no surprise that there are challenges to overcome, as best practices are still being tested and built out.
There is no doubt that social commerce will play an increasingly larger role in digital marketing. For a deeper dive into all of the findings from this survey, download our 2022 Social Commerce Survey Report.