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Rise of social commerce inevitable in 2020, data shows

With almost half of the world’s population now using social media, the growing awareness of social commerce — the use of social media platforms to send traffic to e-commerce sites and drive e-commerce purchases — seems inevitable. 

Forty-nine per cent of the world’s total population, about 3.8 billion people, now uses social media, a 9 per cent (321 million) increase from 2019, according to data released by social media management site Hootsuite and socially-led creative agency We Are Social.

“We believe that social is a crucial channel for retail brands looking to connect with existing and new customers,” said Suzie Shaw, managing director at We Are Social Sydney.

Shaw said this ever-growing channel, which has now reached 71 per cent penetration in Australia, offers unparalleled opportunities to accurately target consumers based not only on their demographics but also on their interests and behaviour, allowing brands to tailor their key messages to many different audiences.

A growing number of people are also now using social media to research and discover new brands, thanks to promoted content, customer recommendations and influencer endorsement, Shaw added.

“So it’s crucial that brands have a solid strategy in place that takes into account how consumers talk about them and their products, and use social media to provide support and generally add value to their lives, to win their trust and, in time, loyalty,” she said.

Nathan Huppatz, who runs and operates Costumes.com.au, said these days retailers need to look at the bigger picture.

“Attributing value to a channel (like Google) is becoming a little harder with social platforms like Facebook, Instagram, Twitter and others,” Huppatz said.

“These days we need to look at the bigger picture. Customers might see your brand on Instagram one day, Facebook the next, and this might prompt them to do a Google search, click an ad and buy something,” he said. “So in that scenario, which channel should be attributed with the sale? They all play a part.”

According to the Digital 2020 report, the global average for daily time spent on social media is two hours and 24 minutes, accounting for more than one-third of people’s total internet time.

In Australia, this is not just socialising but a way to earn a living; nearly a third, 30 per cent, of internet users aged 16-64 use social media platforms for work.

The world’s most-used social platforms are Facebook, YouTube, and WhatsApp. TikTok, in 7th place, now has 800 million monthly active users, with 500 million of these users in China. 

The data also reveals there has been an increase in advertising audience numbers across many major social platforms. Facebook’s data shows 1 per cent growth over the past quarter, while Instagram’s ad audience has risen by nearly 6 per cent in the same time period. The standout performer is Pinterest, whose advertising audience numbers jumped 12 per cent after it added a number of new countries to its advertising targeting options. 

“We have a reasonable budget for paid marketing, mostly with Google (Adwords) and Microsoft (Bing), as well as social media platforms,” Huppatz said. “Over time, we have shifted a little more spend towards social, as we try to find the right amount of touch points with our customers.”

Dean Salakas, who owns a small chain of bricks-and-mortar stores which also sells online, said, however, that picking the right marketing channels for a business would depend on the retailer and the industry.

“For some retailers, social is the best channel and for others it’s Google,” Salakas said. “I would say all [channels] work, it’s just a matter of having the right mix and strategy for your business.”

Huppatz said to have a successful social media marketing, one needs to do research and dig into data to find out who the ideal customer is for the business.

“Build a buyer persona. Are they male? Female? Have family? Retired? Once you understand your target audience a little better you can work out where they spend time,” he said. “It might be Facebook, it might be LinkedIn, it could be Twitter. Then build some small campaigns to test the water.”

The Digital 2020 report revealed 4.54 billion people are now online, a year-on-year increase of 298 million, or 7 per cent, approaching internet penetration of 60 per cent. Half of internet users use ad blockers.

Roughly 3.2 billion people around the world remain offline.

The average internet user will spend six hours and 43 minutes per day online in 2020 — more than 100 days in total. Globally, people will spend a collective 1.25 billion years online this year. Google and YouTube are once again the most visited websites, but Yahoo! still remains popular, with its website continuing to receive more traffic than Amazon.com and the world’s top ‘adult’ websites. 

The data also showed there are now 5.19 billion unique mobile users globally and for the first time, more than half (50.1 per cent) of all internet time is spent on mobile devices.

Australia is one of the top five global spenders in consumer goods online at $1,157 average revenue per e-commerce user. Mobile is now the top device for making online purchases. The world’s e-commerce users spent more than $3 trillion on online B2C purchases in 2019, with shoppers spending an average of almost $500 each on consumer goods alone – a year-on-year increase of 9 per cent. 

“This year we will see more retailers across a variety of categories of product and service trying to find their own social commerce angle, as the technology evolves and offers new ways for users to discover, trial and recommend products – then purchase, of course,” Shaw said.

“More and more retailers will learn how to push consumers through the social funnel, from discovery to purchase, in a few taps, creating a new substantial revenue stream and winning shares over their competitors.”

In the past few years, social platforms have developed new features, like Facebook Collections and Instagram Shopping, to make the path to purchase and sharing as seamless as possible. Pinterest has recently added a new ‘Try On’ functionality that, by leveraging its AR Lens, allows people to try makeup from different brands then shop for their favourite one with a simple swipe up.

Shaw said when it comes to digital marketing, there is no one-size fits all: what’s a winning strategy for a brand can produce negative results for another one, even in the same category. 

Huppatz said there are many great tools available online for retailers and businesses just need to pick the right fit for them.

But, he said, the most important thing businesses need to consider is still to focus on the core things they need to make customers come back.

“Great product at great prices of course, but also amazing customer service and buying experience,” he said. “This includes your customer support, and everything after the purchase too. Good delivery options, great packaging. Make it memorable.”

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