Latest / Retail Media Breakfast Club / The Lazy Girl's Guide to Social Commerce
Transcript
- The Lazy Girl's Guide to Social Commerce === [00:00:00] Kiri Masters: Domino's has been in the social commerce game longer than most people realize. They just called it something else. Back in 2015, the pizza chain launched anywhere, which was a campaign that let customers order from wherever they [00:00:15] already are. It started on Twitter years before TikTok Shop existed today. [00:00:21] Domino's offers ordering via Apple CarPlay. Alexa text message and Apple Watch. [00:00:27] Kate Trumble, Domino's, CMO [00:00:30] summed up this philosophy saying at the bottom line, you need to empower laziness. It sounds bad, but empower laziness because people want convenience. Social commerce is a perfect example of that. Social [00:00:45] commerce buying products directly within social media apps is laziness as a business strategy. [00:00:50] Meet customers where they're scrolling, remove friction, make buying as effortless, as double tapping a video. I've been hearing more and more [00:01:00] discussions about social commerce lately, and I decided to finally wade in. So this is My Lazy Girls Guide to Social Commerce, the 80 20 breakdown. [00:01:11] Just enough to understand what matters. Let's jump in. [00:01:14] [00:01:15] Kiri Masters: What is social commerce? Social commerce is buying and selling goods directly within social media platforms. It's when shoppers make in-app purchases where they already spend time and what it isn't, it's not. Things like [00:01:30] influencer marketing posts that send you off platform or social ads redirecting you to a retailer website. [00:01:38] , Essentially if you leave the social media app to complete the purchase, it's not social commerce. So [00:01:45] what is left? Things like Instagram checkout, um, and TikTok shop is sort of the, the biggest one that we're talking about right now. [00:01:53] The numbers, tell an early stage story. According to a shopper panel conducted by ACOA Group in December 20, 24, [00:02:00] 20 4% of social media users made in-app purchases in the past three months, but the growth curve is pretty steep. US social commerce revenue is projected to hit $141 billion by 2028, up from just over [00:02:15] half of that $75 billion in 2023. [00:02:18] That is an 18 [00:02:19] point [00:02:20] 11% compound annual growth rate. [00:02:23] So a few sort of highlights. Um, and I'll link up to this really great panel research from Acosta in the show notes, but some highlights [00:02:30] from this research from my side. And I'm gonna also share a few examples of retailers and brands. Using these strategies to sort of help bring it to life for you. [00:02:39] So first highlight is TikTok Shop really leads the pack here [00:02:45] among TikTok users. 48% have made direct purchases on the platform. That is, that's pretty crazy. Almost half of users have made purchases there, and that is a lot higher than Instagram at 38% and Facebook at [00:03:00] 34%. As you might assume as well, the demographic skew is pretty striking. [00:03:04] Gen Z TikTok users, uh, 73% have purchased in app compared to just 17% of boomers. But what is TikTok doing really [00:03:15] well here? Well, they've got a seamless. Purchase path, um, robust shopping tools and a really strong creator affiliate program that turns influencers into a distributed sales force. So a quick example here, I [00:03:30] found, , from Tart Cosmetics. [00:03:32] This brand joined TikTok shop in 2023 as part of its push to reengage Gen Z shoppers. CEO. Maureen Kelly reported that over 90% of TikTok shop customers were new to [00:03:45] brand, and even better, TikTok shop drove more than 50% growth in Tarts direct to consumer channel. [00:03:51] Second highlight here is, and this is sort of emerging, very interested to see where this goes is retailers are getting in on this too, so it's not just for [00:04:00] D [00:04:00] two [00:04:00] C brands anymore. TikTok is explicitly targeting established retailers to fill out more assortment and credibility. [00:04:09] Case in point, car four. The major French supermarket chain now operates as a merchant on [00:04:15] TikTok shop. This is super interesting. This is a very different challenge compared to fashion or beauty brands. We're talking about mass merchandise, groceries, CPG products, lower margins, higher volume, and complex [00:04:30] logistics. [00:04:30] But the strategic bet makes sense for both parties. TikTok wants breadth. Car four gets access to younger shoppers in a discovery layer that it would have found difficult to build alone instead of constructing a separate storefront car four [00:04:45] integrates into tiktoks marketplace while leveraging its existing supply chain. [00:04:48] Now this is a very new partnership, so we haven't seen any public results come from this, but to me it's pretty significant. If this works, uh, we could see a lot of other grocers and [00:05:00] mass merchants following along [00:05:02] but here's the thing, and we're going to get into some of the challenges in a second. Unlike building your own channel, [00:05:08] one of the things that retailers will need to be careful of is building on someone else's platform with considerably [00:05:15] less control over the customer relationship. When your time, budget and team are already maxed out. Keeping up with retailer platforms and media [00:05:30] requirements can feel like a never ending labyrinth. That's why even the best brands bring in an execution partner. [00:05:38] Acosta Group makes retail media execution simpler. They stay ahead of every platform. Update [00:05:45] tech shift. And media spec, so your campaigns actually show up and perform without draining your team. [00:05:52] Let Acosta group handle the chaos behind the scenes so you can keep building the brand. Check out Acosta [00:06:00] Group and tell them Retail Media Breakfast Club sent you. That's A-C-O-S-T group. [00:06:06] [00:06:07] Kiri Masters: now let's dive into some of these challenges. And the operational reality is where I have been hearing [00:06:15] anecdotally from a lot of brands that I speak with is that the devil really is in the details. This is where you cannot be lazy. This is the Lazy Girls Guide. Um, I don't think there's such a thing as Lazy Girls implementation of, uh, TikTok shop or social commerce.[00:06:30] [00:06:30] Trust issues dominate among the non buyers, people who are not yet using social commerce. According to Acosta's research here, people are concerned about the usual early technology challenges. Security [00:06:45] concerns scams, product quality fears, but also on the seller side, there are platform operational challenges, [00:06:53] especially for new sellers. There's a company called Experiment Beauty, which is a clean beauty brand, [00:07:00] and they saw TikTok as a high potential sales channel and joined TikTok shop in 2023. What followed was apparently an operational headache, tiktoks AI moderation repeatedly. Misclassified products, for [00:07:15] example, they have a product called Buffer Jelly. [00:07:17] Which was flagged as food. They had a product called software, spelled S-O-F-T-W-E-R, which is a sunscreen, and that was flagged as pajamas. Listings were taken down for [00:07:30] days. Jeopardizing revenue, the brand, dedicated staff time to appealing automated take downs and relied heavily on. TikTok account managers to troubleshoot barriers. [00:07:39] Well, sounds a lot like some other mega, third party selling platforms that we might all be familiar [00:07:45] with, but, [00:07:45] um, [00:07:46] anecdotally, again, I've heard that TikTok can be, even more challenging than working with a third party marketplace. Just for a number of different factors. [00:07:55] And this is where we might also wanna to have a look back at history as well, at [00:08:00] past platform experiments that offer cautionary tales. Instagram launched native checkout in 2019 with a number of luxury, um, brands and beauty partners like Prada, Dior, and oi. And brands quickly [00:08:15] saw trade-offs around customer data and relationships. [00:08:18] They didn't have access to emails, they didn't get to see what purchases were being made, and Meta really was the owner of those customer relationships. So a lot of those brands walked [00:08:30] away and, um, started linking back out to their own D two C sites rather than continuing with Instagram's native checkout. [00:08:37] So that is sort of the cautionary tale from recent history is that a lot of brands don't wanna sacrifice data ownership, even for frictionless checkout, [00:08:45] even for the trade off of meeting those, gen Z customers as well, [00:08:49] of course, there's still a lot of brands out there that are super successful through this channel. A lot of them rely on creators. This is a creator, native kind of platform. One example is. [00:09:00] Wavy talk, a mid-tier hair tool brand that partnered with [00:09:03] the [00:09:03] creator and saw explosive success. I won't recap the full anecdote here. [00:09:08] I've put more, info on my blog post for today, but the formula here is really around. This authentic [00:09:15] Creator who has an established audience, and then this frictionless checkout, which can produce really incredible results. That said, there are some categories that make a lot more sense for social commerce and others from Acosta's data set.[00:09:30] [00:09:30] Apparel and accessories were some of the most frequently mentioned purchases, skincare and beauty and home goods, and things that seem to struggle or show up less as, uh, from a consumer preference standpoint is groceries, commodities, and [00:09:45] anything where trust and safety are paramount. Maybe electronics, baby care, things like that. [00:09:51] Um, supplements perhaps. [00:09:53] So what this means for brands, look, if you want to be targeting Gen Zs or millennial audiences, this is a pretty [00:10:00] interesting. Avenue. I think the thing to budget for here is the operational complexity. It's not easy money. , And for retailers, very interesting to see this. Car four pilot, I'll definitely be watching that. It is interesting because again, [00:10:15] groceries were not really a category that consumers called out in this shopper panel research from Acosta. But, , that could be because there just hasn't been enough supply on, on the platform to date. So that will be very interesting to watch. [00:10:29] All right. [00:10:30] Wrapping up here, you can take the 80 20 approach to understanding social commerce, and that's what this quick little episode is for, but you absolutely cannot be lazy about execution. These platforms are finicky, operations are complex. Consumer [00:10:45] trust is hard won. Ultimately, social commerce removes the friction between discovery and purchase. [00:10:50] For shoppers, but for brands and retailers, it could add a lot of friction on the backend. There's moderation, hassles, data limitations, platform fees, and the constant [00:11:00] risk that the platform changes the rules. I think if you're willing to experiment and can tolerate platform growing pains, there's potentially real opportunity here, but it isn't a replacement for [00:11:11] owned and established channels. The future of shopping might be [00:11:15] effortless for consumers, for brands and retailers, probably not so much. [00:11:19]