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Social commerce: building brand love and delivering growth

Debbie Ellison, of WPP’s VMLY&R Commerce, says that both how and where consumers are shopping is changing radically, and we are seeing a confluence of social and commerce on media platforms powered by influence and brand love

“Previously, we saw shopping as something that happened only in physical retail spaces and on ecommerce platforms. That’s all changed – retailers are becoming media channels, media channels are becoming retailers – and brands are in a head-spin,” says Ellison.

The reality is that brands and retailers are capturing shoppers end to end in media channels. “This is happening because of change on two fronts – from a technical and functional platform perspective, and global change in human behaviour. People increasingly want delivery of goods bought online within 24 hours,” she says. “From inspiration, to purchase and delivery, commerce is just getting faster.”

China is THE social commerce powerhouse

Just last year, Statista reported that almost 84% of Chinese consumers had shopped on social media platforms – the highest recorded numbers in the world.

“Retailers in China have mastered the full funnel to the point where Alibaba, the most accomplished innovator, enables everything to take place within its own ecosystem, from influence and live streaming to the ability to buy,” says Ellison. “From the shopper perspective it’s perfect – it’s a one stop ‘shop’. Interestingly, the retailer’s strategy has been to invest in existing physical mom and pop stores to integrate commerce data and improve real-life customer experiences. Alibaba is across all retail channels.”

Although social commerce in the US is 10-times smaller than that of China, Walmart is looking to become a power-player, with heavy investment and innovation in the capability. Last year it filed trademarks for ‘Walmart Creator’ and ‘Walmart Creator Collective’ to provide social media consulting for ‘the promotion of goods and services of others through influencers’.

Outside China and the US, social commerce remains disappointingly disjointed across platforms and retail channels, and therefore immature.

Surprisingly, definition is a part of the problem. “Social commerce means different things to different people,” argues Ellison. “In its purest form, social commerce suggests facilitating purchase directly on the social platform. Here, at VMLY&R Commerce, we take a much broader perspective, which is to leverage brand love created on social to deliver business growth. In our view, brands need to direct footfall to whichever conversion channel makes sense for a shopper, even physical retail.”

She continues: “One of the challenges to brand acceleration is that brands and retailers sell the same product, talk the same way and show up in the same way regardless of channel – and that won’t drive growth.” Not only does each channel need its own strategy but all retail and media strategies must work together.

“For example, if a retailer targets a Gen Z audience in one channel, perhaps don’t sell to this audience in another,” she says. Social commerce offers up opportunity to be more targeted, more engaging and frictionless. But first, audiences and their needs must be understood. It makes little sense to convince Gen Zers to buy drinks online, the social commerce strategy should be to drive their footfall to convenience stores.”

Selling is not a dirty word

Ellison is emphatic that sales are the ultimate marketing metric. “Social teams have been conditioned to build brand love, and now brands must get comfortable with selling. There's no greater sign of brand love than purchase,” she says. “In fact, it’s an imperative – you’ll damage brand equity if you make it difficult for people to buy.”

Part of the social commerce mix comes from the world of influencers. Ellison points out that, in most markets, influencers are chosen by brands for their ability to influence; but retailers in China are looking for influencers who can sell to huge numbers of followers and command billions in revenue, on the platform itself. Lipstick king – Austin Li Jiaqi – (the top live-streaming influencer of the Singles’ Day shopping festival hosted by Alibaba Group Holding) has been reported to have delivered nearly $3bn in sales for the group last year.

Successful social should deliver the ability to purchase. “Social commerce delivers a means of taking brand love and giving people the opportunity to buy in the moment. That's the biggest mind shift retailers need to make,” says Ellison. “Brands and retailers may not see social is the way to drive sales, nor that brand love and purchase go together, but their customers do.” Making it difficult for shoppers to buy – or for the experience to lack engagement, fun, entertainment and purpose – all impact how retailers and brands are regarded.

Ellison concludes: “To get social commerce right, you need a commercial growth mindset. You need to understand the complete commerce ecosystem and the role social can play there. Get it right and not only will you build brand equity by offering more relevant and personalised shopping experiences, but you’ll also secure fair share of $6.2trillion forecasted global revenue.”

Debbie Ellison

VMLY&R Commerce

published on

17 May 2023

Category

Commerce

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