Over the last several years social commerce has been predicted to be a bright spot in direct-to-consumer retail, with some predicting growth to be three times faster than traditional e-commerce, reaching $1.2 trillion by 2025. And social commerce certainly has grown with increased interest in TikTok Shop and Instagram Shop in addition to new platforms launching designed to streamline shoppable content.
Social commerce is reshaping how consumers are discovering and purchasing products across all categories with platforms and hubs evolving quickly and giving brands and retailers new opportunities to connect with shoppers. And while many consumers are embracing social commerce, it hasn’t been without a fair share of consumers questioning aspects of the easy-to-use shopping method.
In a new research report from SOTI called “The Rise of Social Commerce: Turning Tech-Driven Browsing Into Influenced Buyers,” the tech solutions provider aimed to help brands and retailers understand the consumer behaviors and sentiments associated with online shopping today and how to take advantage of the opportunities. The report examined three key themes including how social commerce is fueling growth, security as a high priority and how AI is enhancing the consumer journey with improved personalization with a survey of 12,000 global consumers.
According to SOTI’s findings, there is a sort of balancing act happening for consumers between trust and security in social shopping. Seventy-six percent of U.S. consumers have fears about data breaches, even as 64 percent report preference for personalized shopping experiences. The authors of the report said that this points out a need for retailers to perform a “new balancing act — earning consumer trust while delivering the tailored experiences shoppers now expect.”
“Trust is everything in the retail industry, especially as social commerce continues to grow. Retailers must remain committed to maintaining consumer trust, which includes protecting customer data and providing transparent security measures,” said Shash Anand, senior vice president of product strategy at SOTI. “When 70 percent worry about their data security when purchasing items through social media, it’s clear that brands and platforms can’t just focus on selling. They need to concentrate on safeguarding data and offering support that truly delivers.”
With 70 percent of consumers reporting concern about data security when purchasing through social media, another 61 percent said that they have abandoned online purchases due to these concerns. Concern reaches 63 percent of consumers when looking at smaller retailers with survey respondents explaining that they fear the companies “cannot keep personal and payment data secure.”
Overall, 76 percent of consumers worry about the security of personal details when shopping online with another quarter expressing being worried about social media purchase links.
SOTI’s research found that there are a number of factors that serve to undermine social commerce growth including delivery delays and communication gaps. In the last six months, 34 percent of U.S. consumers said that they had experienced delivery delay on a social commerce order, 29 percent said that they had received products that looked significantly different from what was ordered and 22 percent said that they had received little to no updates on product availability after expressing interest.
In contrast, SOTI’s research revealed that engagement can be driven through personalization. The company’s survey found that 64 percent of U.S. consumers prefer retailers that offer personalized experiences online and in-store and 68 percent are interested in loyalty programs with tailored offers (over traditional point-based rewards).
The authors of SOTI’s report cited innovation as the key to enhancing personalization. Fifty-seven percent of consumers said that they were “more likely to choose retailers that use technology to personalize in-store experiences” and just under half believe that “AI should deliver tailored offers.” Although while 64 percent of respondents indicated that they prefer personalized experiences with 48 percent reporting that they view AI as essential for “better recommendations” there is a connected worry over data breaches and security vulnerabilities which lead to distrust.
“To unlock the full potential of social commerce, retailers need to focus on secure, mobile-first platforms, seamless payment options and reliable supply chain models,” said Anand. “Putting data protection at the forefront and using advanced technology to safeguard sensitive information can help restore trust and position retailers for long-term success.”