[ad_1]
- At the end of 2021, industry insiders predicted that 2022 would be the year of social markets in the US.
- Social media platforms have launched a number of new shopping features for creators and brands.
- But more than halfway through the year, platforms have had mixed reactions to their efforts.
2022 was supposed to be the year of social markets in the US.
Platforms from Instagram to Pinterest have revamped and added features like in-app storefronts, native affiliate marketing tools and live shopping technology in hopes of becoming America’s new malls. Some industry insiders predicted those bets would pay off, with eMarketer forecast 24.9% year-over-year growth in US social commerce, taking the market from $36.6 billion to $45.7 billion.
But more than half the time, the platforms have had mixed reactions from creators, marketers and consumers.
Advertisers on TikTok and YouTube told Insider that the shopping tools have yet to translate into meaningful sales, and some influencers testing Amazon’s live shopping feature — several of whom are abandoning it altogether — said they’re struggling to find an audience on the platform. .
In July, Instagram moved away from some native social shopping features. Meta told Insider that it was “finishing the current test” of its native affiliate marketing program that paid creators a commission for sales made within the Instagram platform.
Then, earlier this month, Meta announced it would spin off a live streaming shopping tool it had been testing on Facebook since 2018. The feature is set to shut down on October 1 as the company shifts its focus to Reels.
And TikTok’s experiment with UK markets collapsed earlier this year after the company reportedly set unrealistic sales targets, calling into question whether it will be able to pull off e-commerce in the US, according to a June Financial Times report.
However, the problem may transcend any platform and features – creators and consumers in the US may simply not be ready for social media purchases.
“Consumers aren’t thinking, ‘I’m going to TikTok to make a social commerce purchase,'” said Ian Whittaker, managing director of media consultancy Liberty Sky Advisors.
While 45% of consumers say social media influences their shopping, only 11% have purchased directly through social media, according to a May 2022 McKinsey report.
“The industry is trying to run before it can walk,” said Sarah Penny, director of content and research at influencer-marketing platform Influencer Intelligence. “It’s still pretty foreign to a lot of audiences.”
US tech platforms want to replicate the success of social markets in Asia
The concept of using social media for shopping is not new.
For years, upstarts like LTK (formerly RewardStyle) and MagicLinks have been in the social shopping game, mostly through affiliate programs that pay commissions to creators based on sales they make through social media posts.
More recently, platforms like Instagram and TikTok have made moves to own the shopping process by adding built-in checkout features, product tags, and other e-commerce tools.
All hope to replicate the success of tech companies in China and Southeast Asia, where social shopping has represented almost half of the $109 billion e-commerce market in 2020, and for stealth business from startups in the space.
The decline in e-commerce sales could also be critical for companies like Meta Platforms whose advertising business has taken a hit since Apple’s iOS privacy changes.
Social platforms are hungry for buyers, but American consumers haven’t shown up yet
While social media markets are still in their infancy in the U.S. and consumer appetites may change in the coming years, platforms face a number of headwinds as they try to bring in-app purchases into the mainstream, experts told Insider.
One reason is the technology itself, which is different in Asia and the US. Chinese consumers are accustomed to stand-alone apps like WeChat, sometimes referred to as “super apps,” which allow users to perform a variety of tasks such as sending messages, ordering food, and hailing cars.
Executives at companies such as Snapchat-maker Snap Inc expressed interest in building super apps, and Instagram’s former product manager for Instagram Shopping told Insider in November 2021 that the company wanted to create “an ecosystem, versus a feature.”
However, US tech companies have yet to create a super app, which may be holding them back in social media markets.
“Consumers in Western markets, when they want to buy something, they think of niche sites,” Whittaker said. “In places like Russia and China, they’re more used to actually buying all their needs through a particular social networking site.”
The willingness of US consumers to hand over payment information to major technology platforms, some of which have faltered in protecting user data in the past, could be another obstacle.
“There are still a lot of people who don’t want their credit cards stored online in a lot of places,” said marketing analyst Sonia Elyss.
In addition, the growth of e-commerce in the US during the height of the pandemic created unrealistic expectations for social markets.
According to McKinsey report, In-store purchases grew 8% year-on-year in March 2022, compared with around 5% in early 2021. Meanwhile, e-commerce growth has slowed since the peak of the pandemic.
“Not many people are going to flood in to shop [online] like maybe we wanted when we were in the middle of the pandemic and seeing how many people were shopping from home,” Elyss said. “Now we’re just in a completely different economic climate and I think that’s what has slowed the growth of this lot.”
Advertisers, for their part, are waiting for wider adoption before jumping into the trend. Some pointed to the fact that the majority of social shopping tools were recently launched or are still being developed or tested.
This is true for most platforms, such as YouTube, where some existing shopping features are only available to a closed group of creators, and TikTok, which is test a dedicated “Store” tab in select markets, but not in the US.
Those advertisers who have tested social shopping tools said they haven’t been able to prove the tools are driving sales yet, which makes them hesitant to spend more money there.
For creators, the integration of social shopping tools is helpful, but some worry that the increased focus on shopping will alienate their audience.
Anna Crollman, a creator and blogger, said there is a frustration caused when creators are perceived as salespeople.
“You’re constantly recommending, you’re constantly saying, ‘Buy, buy, buy,'” he said. “Sometimes I don’t want there to be a link, I don’t want people to buy something, I just want you to feel good and get a resource.”
Insider spoke with 25 marketers, brands and creators to hear their thoughts on social shopping.
See what features platforms have introduced in 2022 and how industry insiders are reacting. Platforms are listed in alphabetical order.
[ad_2]
Source link
