Pros & Cons for businesses

If you’ve been on Instagram in the past year, you’ve probably noticed this cart icon at the bottom of your screen. It’s a form of social commerce, where consumers can purchase items directly from a brand without having to leave the app itself, from browsing to checking out.

Put simply, social commerce is all about selling physical products through social media – think Instagram Shopping or Facebook Shops.

On the other hand, e-commerce is basically an umbrella term to describe all forms of online shopping of physical products. In this article, we’ll use the term to describe purchases from third-party sites such as Lazada and Shopee.

Is there one better than the other for an SME or a micro-brand? We take a look at some of the features that users should expect from the online shopping experience and see how social commerce and ecommerce stack up against each other.

Instant transactions via advertisements

As mentioned, social commerce means that the entire shopping experience, from browsing to checking out, takes place on social media itself, and consumers won’t have to leave the platform.

From browsing to payment, everything is done in the social app itself

For brands, products can be delivered more transparently, as customers won’t be redirected to different sites. To add, they won’t have to create new accounts just to make a purchase, which can cause them to abandon their cart.

So anytime they see an ad on their social media feed, they can just click on it, fill in their shipping details, and explode – that article will be on its way.

However, if you’ve ever clicked on your Lazada or Shopee recommendations on Facebook, you’re probably familiar with the annoying load times it takes just to display that product on the site. More often than not, you can’t even land on the brand page, but on the homepage instead.

If you’re already browsing third-party ecommerce sites, it’s no surprise that transactions are transparent and pretty instantaneous as well, but people tend to spend more time on social media than these sites.

Goal:

Social commerce1
E-commerce0

Keep customers up to date

Since social commerce is done through social media itself, customers have a direct way to connect with brands and stay on top of new product launches, promotions, etc.

Additionally, if they have any questions about the products, doubts can be clarified right at the source with a comment or DM, which are usually seen and dealt with more quickly. This can cause customers to press that payment button with more confidence without having to sleep on it.

On the other hand, brands can’t really depend on third-party ecommerce sites to let their customers know that there has been a new product launch or a discount on certain items.

Customers would only know if they are already actively researching such a product, which means visibility of your brand’s activity is much lower in general, resulting in slower traction and conversions.

Goal:

Social commerce2
E-commerce0

High reach and commitment

Word of mouth is powerful. If you’ve read most of our starter features, you’ll notice a common trend. Most of them started with a handful of customer-followers who shared their praise on a brand and eventually converted their own friends into customers.

With social commerce, consumers can distribute photos or videos in the form of articles and stories. When they tag the brand they bought from, their followers will see it and have access to explore and find your brand’s profile, which can convert to sales.

Brands also have a clearer picture of their audience, as customer data on social media is available through site analytics. Therefore, brands can modify their ads to target specific customers or perform split testing to determine which types of messages generate better sales.

For ecommerce sites, you’ll mostly see people complaining (or complaining) about a product in the reviews section, but the people who will see these posts are just other customers who are already looking at the product.

Of course, if someone likes the product enough, they love it on social media too, but if you’re a smaller or newer brand that doesn’t easily publicize your social media management, it’s rare for users to get to work to find and tag you.

Goal:

Social commerce3
E-commerce0

User-friendly search functions

Unless a user can identify a brand’s exact nickname or hashtag for their products on social media, it is difficult for customers to find the exact product they are looking for. This is a sentiment shared by the founder of Poptron, an e-commerce site for micro-brands as well.

Ecommerce sites have useful search engines, as it’s a standard for sellers to name their items with all of the possible keywords that apply to a product. Will I find exactly the “Samsung S10e Hard Phone Case” I need on Shopee? Yes, and I may also discover something else that I didn’t know I needed to reduce my shipping costs, like a wireless charger that is now coming to my house from China.

If I tried to enter the same keywords on Instagram stores, I would get a “No results found” message. But if I just searched with “phone case” as the keywords, I would be suggested a few brands, where I would have to browse through each one just to find the exact product I have in mind.

For a picky and impatient buyer like me, the latter’s discoverability is maddening, which earns e-commerce a point in this category.

Goal:

Social commerce3
E-commerce1

Transparency of customer satisfaction

Vanity metrics are numbers that look spectacular on the surface (like number of followers and engagement rate) but don’t necessarily translate into meaningful business results (sales).

When you rely on social commerce, you can quickly get excited about the likes and comments you have received. However, these numbers may not translate into successful sales, even if you promoted your products through paid ads or if a post went viral.

People don’t tend to leave very useful comments (out of love or dislike of a product) on a brand’s social media, and overall it’s pretty hard to tell who in the comments is a real customer, or just a fan of the product. nice branding image.

For ecommerce, if a product listing has high ratings and high sales volume, that’s an immediate sign that the customers who bought it love it. Other people would then be more likely to purchase from your brand as well.

Goal:

Social commerce3
E-commerce2

– // –

Perhaps the biggest benefit of social commerce is that it brings the entire online shopping experience to spaces where people are already hanging out. On average, people around the world are already spending more than 2 hours a day on social media, and you can bet some spend even more time there.

This means easier reach to a large number of potential customers, and brands should at least start to educate themselves on how to use these social commerce tools before they are left behind. As mentioned, e-commerce websites (whether branded or third-party) always have the benefits of a better search function, but over time we won’t be surprised if media sites social groups also adopt this functionality.

But that doesn’t mean third-party ecommerce sites have their work cut out for them. They still offer new and growing brands a lot of benefits, as we’ve explained here.

Either way, the entire Instagram buying process is only available in the US, not Malaysia. Throughout my own Instagram Shopping spree, it seems like I always have to see the product on the brand’s website and make my purchase there.

So for now, if you think it’s not worth setting up your micro-brand on third-party e-commerce sites due to transaction fees, you can default to the classic “DM à la order ‘and grow your social media user. base in preparation.

  • You can read more articles about online shopping than we have written here.

Featured Image Credit: Vulcan Post

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