A new study by Accenture found that the $492 billion global social commerce industry is expected to grow three times as fast as traditional e-commerce to $1.2 trillion by 2025.
Growth is predicted to be driven primarily by Gen-Z and Millennial social media users, accounting for 62% of global social commerce spend by 2025.
According to Accenture’s report, “Why Shopping’s Set for a Social Revolution,” social commerce means a person’s entire shopping experience – from product discovery to the check-out process – takes place on a social media platform. Just under two thirds (64%) of social media users surveyed said they made a social commerce purchase in the last year, which Accenture estimates to reflect nearly two billion social buyers globally.
Robin Murdoch, Global Software and Platforms Industry Lead at Accenture said: “The pandemic showed how much people use social platforms as the entry point for everything they do online – news, entertainment and communication.
“The steady rise in time spent on social media reflects how essential these platforms are in our daily life. They’re reshaping how people buy and sell, which provides platforms and brands with new opportunities for user experiences and revenue streams.”
What does this mean for smaller businesses?
While the opportunity is significant for large businesses, individuals and smaller brands also stand to benefit. More than half (59%) of social buyers surveyed said they are more likely to support small and medium-sized businesses through social commerce than when shopping through e-commerce websites. Furthermore, 63% said they are more likely to buy from the same seller again, showing the benefits of social commerce in building loyalty and driving repeat purchases.
It’s positive to see that social commerce can empower smaller brands and can force larger brands to alter their strategies to ensure relevancy for a larger audience.
Oliver Wright, Global Consumer Goods and Services Lead at Accenture said: “Getting social commerce right will require creators, resellers and brands to bring their products and services where the consumer is, and will be, rather than the other way around. It means working together within a dynamic ecosystem of platforms, marketplaces, social media and influencers to share data, insights and capabilities to deliver the right incentives and best consumer experience across an integrated digital marketplace.”
Half of social media users surveyed, however, indicate they are concerned that social commerce purchases will not be protected or refunded properly, making trust the biggest barrier to adoption, as it was for e-commerce at its beginning. It’s hopeful that widespread adoption will fuel consumer trust.