Social commerce: the next evolutionary step in retail

by Sandra Katzenberger

The figures from the SOTI study speak for themselves: 65% of consumers worldwide consider shopping via smartphone to be the most convenient way of shopping. Almost half of those surveyed see social commerce as a quick and easy way to discover products and follow trends.

However, despite the high level of acceptance, not everything runs smoothly. 73% of respondents report problems with social commerce, such as long delivery times or inadequate communication. 82% of consumers are also concerned about the security of their personal data when buying online. Retailers need to address these weaknesses in order to gain the trust of their customers and retain their loyalty in the long term.

The biggest stumbling blocks in the global average:

• 35% complain about long delivery times.
• 25% receive products that do not meet their expectations.
• 21% miss updates on their order.
• 14% say that they never received the items they ordered.

Standardized advertising is becoming less effective – consumers today expect tailor-made shopping experiences. For example, 60% of consumers worldwide prefer personalized offers that are precisely tailored to their interests. Technologies such as artificial intelligence are playing an increasingly important role when it comes to optimizing the offer through AI-controlled algorithms. Interactive approaches such as the integration of augmented reality not only ensure higher engagement rates, but also strengthen the emotional bond with the brand.

But personalization alone is not enough. Data protection remains a key concern: Gen Z (28%) and Millennials (26%) are more likely to express privacy concerns than other age groups, indicating a heightened sensitivity among younger generations. A transparent approach to security measures is therefore essential to build trust.

Social commerce is booming, but one key hurdle remains: Millennials and Generation Z in particular are skeptical when it comes to the security of their personal data and the reliability of payment processes.

To dispel these concerns, confidence-building measures are essential for merchants. A first step is the integration of secure and established payment providers that make the purchasing process transparent and trustworthy. Established worldwide, PayPal, for example, offers buyers and merchants protection through mechanisms such as buyer protection and SSL-encrypted data transfer. In addition, sensitive payment data is not passed on directly to the merchant.

Retailers must therefore invest in secure payment solutions and transparent processes in order to gain the trust of consumers. Because one thing is certain: trust is the most important currency in digital commerce. Those who manage to build trust not only strengthen customer loyalty, but also increase the willingness to buy – and that makes social commerce a real success story.

While social commerce is already considered an influential sales channel, an even more profound change is on the horizon: The integration of social media with technologies such as voice commerce and blockchain will further revolutionize the shopping experience. Voice-based search and purchase processes – for example via digital assistants – could replace scrolling through feeds and enable even more seamless transactions.

At the same time, blockchain could usher in a new era of transparency and security. With the ability to immutably document every step of a purchasing process – from the origin of a product to payment – companies can gain the trust of consumers in a completely new way. This technology could also facilitate the resale of products on social media platforms by making proof of ownership digitally verifiable.

Another key trend is the increasing fusion of content and commerce. Social media platforms are developing into genuine entertainment centers in which e-commerce is directly integrated into live content, challenges and viral formats. The influence of user-generated content is becoming ever greater: consumers are becoming active co-creators and creating a sense of community through authentic product recommendations that traditional sales channels lack.

Retailers who actively embrace these developments and think ahead have the opportunity to play a pioneering role in a retail environment that is changing faster than ever before. The future of social commerce will not only be determined by technology, but also by the creative combination of brands, consumers and innovative approaches.

Social commerce is far more than just an additional sales channel – it is a fundamental change in retail. This trend offers enormous opportunities, but also poses challenges. Retailers who invest early in secure technologies, immersive experiences and personalized offers are setting the tone for the future.

• Fast, transparent processes are essential to ensure smooth orders and deliveries.
• Security and data protection must be actively communicated in order to gain the trust of customers.
• Personalized experiences increase the willingness to buy and enable long-term customer loyalty.

Sources: SOTI Industry Report