Social commerce hits the trust gap
Social commerce hits the trust gap. Social commerce has been slow to take off in North America and Europe, with consumers citing a lack of trust as the main barrier. This trust gap can be bridged by marketers who focus on the basics: offering easy returns and refunds, displaying ratings and reviews, and keeping buyers informed throughout the customer journey. Brands that master these basics will build a lasting advantage, as social shoppers are sticky and reliable repeat buyers. Despite reports of networks scaling back their social commerce plans, proactive brands can still see the opportunity and be patient in their investments.
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Hootsuite - Social Media Trends 2023
As sales blasted past $350 billion in China, North American and European marketers scrambled to position themselves to take advantage of a new way to make money directly from social beyond advertising. Since then, social commerce has arrived with less of a bang and more of a yawn. Despite its success in China, North American and Euro- pean consumers haven’t shown much interest in the technology—so much so that Meta decided to shut down its live commerce functionality on Facebook and affiliate product tagging option on Instagram.
TikTok has also scaled back its ecommerce plans, delaying the launch of live shopping. With almost every major network pulling back its social commerce plans, the promising future of social shopping feels farther off than anticipated. Consumers say the biggest barrier to purchasing through social is trust.
What’s behind the tepid adoption of social commerce? A lack of trust in both social networks and vendors. The top two concerns for social buyers stem from a lack of trust in vendors, according to an Accenture survey of over 10,000 consumers. Their biggest concern is that their purchases won’t be protected or refunded.
They’re also worried about the quality and authenticity of products and sellers on social media. And the third most common concern stems from trust in the social networks themselves; people say they don’t want to share their financial information with the networks. Marketers haven’t faced up to their role in this trust gap yet Our survey asked marketers what they believe are the greatest barriers for social buyers.
And, while marketers also think trust in networks is to blame—our data suggests they don’t realize they have an even bigger role to play. Of the marketers we surveyed, 37% said that concern entering payment information on social platforms was the biggest issue for social buyers—in line with the results of Accenture’s consumer survey. But while almost half (48%) of consumers told Accenture that vendor reputation and product quality was their main concern when shopping on social, less than 8% of the marketers we surveyed said the same.
Smart marketers know that the social commerce experience is about much more than technical concerns. To overcome the trust gap and turn skeptical shoppers into buyers, marketers will have to work on the basics: offer easy returns and refunds, display ratings and reviews from other buyers, and keep buyers notified about the status of their purchases throughout the customer journey. Marketers who master the basics will build a lasting advantage So here’s the thing.
When networks and vendors do overcome that trust barrier, social shoppers are very sticky and reliable repeat buyers. The average US social buyer will spend $518 via this channel in 2022, up 27% from last year, according to Insider Intelligence. Annual spend will increase by $419 per buyer over the next three years, reaching $937 in 2025.
And social commerce sales growth is also expected to remain above pre-pandemic levels through to 2024. So yes, in 2023 we’re likely to see social commerce features get scaled back. Many marketers and business owners will make knee-jerk reactions and stop investing in their social storefronts.
But it’s far too early to take Facebook’s shutdown of its live commerce feature or reports that TikTok is abandoning its plans for livestream shopping in the US as an indicator of their overall social ambitions. Proactive brands will continue to see the opportunity ahead— and they’ll relish seeing their competitors abandon social commerce plans early, leaving the playing field wide open for those with the patience to hang on..