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S-Commerce, short for social commerce refers to the selling of goods on social networks. As social platforms have gradually become more ingrained in our society and day to day life, the process of integrating commercial elements has quickly become a priority for the Platforms and Brand Owners alike.

Kering recently invested in Vestiaire Collective, a Peer-to-peer luxury re-sale marketplace.

It is no longer a strange concept to purchase from an individual rather than a corporation. Some would even argue it is the future of creativity and sustainability as more consumers opt for one offs and handcrafted goods.

There are Five Main Types:

1. Social Media: The integration of stores into brand pages and purchase links as seen on Instagram, Facebook and Pinterest.

2. Peer-to-Peer: Think of Etsy, Ebay, Vestaire Collective and Amazon. Where communities of sellers speak and transact with customers directly via a marketplace platform.

3. User Curated: This category includes platforms such as Lyst and Fancy, where users create lists that others purchase from.

4. Participatory Commerce: Examples of this type include Kickstarter, Patreon and CutOnYourBias. These platforms involves customers in the production and development process of the products they purchase almost in collaboration with the seller.

5. Group Buying: Platform like Groupon that deliver special offers if a large enough number of purchases are made on a specific product.

S-Commerce isn't going anywhere soon, the proliferation of ways in which customers can buy across channels is only set to expand. With the application of VR and AR experiences across the digital customer journey, the room for social elements to be featured is only likely to increase.

S-Commerce Data

The average order value of an S-Commerce sale is $79.01 USD
48% of US internet users aged 18-34 have already made an S-Commerce purchase
43% of internet users do their research on social before purchasing

The Commercial Power House: Whatsapp

Whatsapp is expected to release a brand new carts feature that enables users to order multiple items with a message. This is designed to allow some to browse products and add items to cart and checkout by sending a single message. Already, over 175 million people use Whatsapp to message a business account each day. The Whatsapp Business app which is where store owners and companies manage their Whatsapp presence already has 50 Million users globally.

Luxury Brands Remain Resistant

Whilst Luxury brands have fully embraced E-commerce, some due to necessity caused by the pandemic. Many are resistant to the S-Commerce path. A Vogue Business Index saw that more than 7000 global luxury consumers viewed social media shopping as the least important omnichannel feature. With little need from their customer base, the luxury market is the laggard of social commerce adoption. Luxury shoppers enjoy the in store experience and value that highly as a part of the desirability of purchasing a luxury item. Therefore, swapping the plush surroundings of a New Bond Street in store experience for a mid commute Instagram scrolling session doesn't quite have the same appeal. We do however see some willing from Luxury brands to enagage in the s-commerce market but not as direct sellers, rather as investors. Kering the owner of Luxury Houses Gucci, Saint Laurent, Bottega Veneta and Balenciaga recently invested in the French Luxury Re-sale platform Vestaire Collective. Demonstrating that there is not just belief but also major interest in the power of S-Commerce from major Luxury players.

It is not that luxury brands are resistant to social in general. Many brands are actively cultivating communities and delivering social only content which is paying off for them with huge numbers flocking to follow their content. Good examples are Chanel with 43.2 million followers on Instagram and Louis Vuitton with 42.7 million followers. These followers however do not convert into customers with both brands actively opting out of the Instagram store feature.

The Asos Marketplace

Unlike lower end retailers like Asos who are aggressively leveraging the Instagram social commerce function but also building out s-commerce functionality on their own website in the form of the Asos Marketplace. A peer-to-peer s-commerce platform where indie sellers can post their products many of which are pre-loved and sell direct to the Asos consumer. A model designed to support their stance for sustainability no doubt.

Actionable Insights & Key Takeaways

  • To win at S-Commerce you need to understand which of the 5 types your customer is actively engaged in. Then, prioritise which platform works best for you and them and invest in promoting and selling your product there.

  • Think about how you can leverage that platform to build a conversation around your product that your customers will engage with. Customer trust grows with as little as 2 reviews, how can you enhance your reviews.

  • Think about how you can use S-Commerce to make your production process more collaborative, social media interactions in general create more trust and build deeper relationships.


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