Don’t Miss Out: An $80-Billion Opportunity is Right Around the Corner
By Vinod Varma, Founder & CEO, Creator.co
As social commerce continues to grow, it is critical for brands to partner with the right content creators
If the last few years of the COVID-19 pandemic have taught us anything, it is that the Internet is among our most pivotal critical infrastructure resources – right up there with energy, transportation, and water management (could you really live without the Internet?) Overnight, people saw their work and social lives transition into a nearly all virtual experience. We have never been more plugged in and connected at any point in history than now, and it is transforming how we live, work, and play… and buy.
Perhaps nowhere have these effects been more evident than in the world of retail. The rise of e-commerce that we have seen in recent years has fundamentally changed how we shop.
Companies are seeing exponential growth on the e-commerce front. According to a U.S. Department of Commerce report, e-commerce sales have continued to increase each quarter for the last two years. In the first quarter of 2022, e-commerce sales totaled $231.4 billion, accounting for 14.3% of all retail sales. The continued growth is mind-boggling.
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Among the fastest-growing segments of e-commerce includes social commerce, which is defined as the sale of goods and services through social media sites, such as Facebook, Twitter, Instagram, and one of Creator’s favorites, TikTok! And social commerce sales are rising fast. Influencer Marketing Hub found that social commerce sales in the U.S. were just over $46 billion in 2020, with that number expected to climb to nearly $80 billion by 2025.
Admit it; you’re part of this trend. In fact, more than 55% of consumers between 18-24 years of age reported making at least one purchase via a social channel. And although age affects the likelihood of buying from a social platform, 34% of consumers over age 65 have made such a purchase, meaning the impact of social commerce is undeniable.
Still wondering if the social commerce potential is worth the hype? Let’s take a look at the big splash influencers have made in Asia for years. Statista found that China has seen the reach of its influencers increase from 765 million users to 1.07 billion users since 2018. While you can’t ignore that China’s population is much larger than the U.S., those rates of growth are explosive compared to what we are seeing in other parts of the world. The potential reach of influencers will impact social commerce sales in Asia greatly. According to reports, Southeast Asia’s influencer marketing industry is expected to quadruple by 2024, from $638 million to $2.59 billion.
With an opportunity for growth like this, brands across the spectrum – from soft drinks to dental hygiene – are looking to bulk up their presence on social media platforms to increase total sales. And they are looking for influencers to partner with.
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A Match Made in Branding Heaven
While most people think of celebrities like Kim Kardashian and Taylor Swift when it comes to social media influencers, often, it is content creators with significant followings in individual niches that are most effective in generating greater brand awareness and sales.
As content creators gain the trust of their audiences (hey, Mikayla!), their ability to influence a larger number of consumers expands, creating a natural synergy with brands that want to reach this target-rich opportunity.
However, just because someone has a large following on TikTok or YouTube doesn’t mean they are the right fit for YOUR brand. Fit and synergy are essential when developing these partnerships. And take it from me, someone who’s been around the block a few times: a shotgun approach to social commerce will not translate to increased sales. To ensure you see the best results from your social commerce efforts, please do your due diligence regarding the social influencers you decide to partner with and vice versa. As we have learned, the benefits of influencer marketing can be what takes your company to the next level, but only if you do it right.
Today, we see influencers creating content about cosmetics, baking, home organization, golf, gardening, video games, etc. With all of the noise, brands need to work with the right content creators. Not only does it increase their sales and ROI, but it also promotes brand awareness and trust. With how overwhelming this process can be, it’s essential for brands and creators to seek out platforms that make this collaboration simple and have already done the heavy lifting for them.
As with any industry, it is essential to know your market for social commerce and the influencers that could have the most significant impact on sales. And though the market is still relatively young in relation to e-commerce, there has never been a better time to formulate a strategy for tapping into this fast-growing segment. And I’ll say it now, Revlon did not invest much into social commerce… Don’t make the same mistake.
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