How your brand can benefit from social commerce

Social commerce is the process of selling products directly through social media. The entire shopping experience happens within a single social platform — allowing customers to explore products, fill their virtual shopping carts and make purchases without ever leaving the app.

February 21, 2024

Social commerce is a subset of e-commerce that uses social networking platforms to sell products. Small businesses can tap into potentially lucrative sales while winning over followers and fans by leveraging social commerce to sell directly on the platforms that people use every day.

For example, you’re scrolling through Instagram when you see a smart-brew coffee machine that would make a great addition to your employee breakroom. Without leaving the app, you click the “buy now” button, complete your purchase and get back to your feed before you can Google, “What is social commerce?”

Social commerce sales in the U.S. are expected to reach nearly $80 billion by 2025 — more than double the 2021 social sales volume of $36 billion.¹ As more social platforms introduce new features that let brands sell directly, this growing trend benefits brands of all sizes.

Learn how small businesses can leverage social commerce to tap into this growing market.

What is social commerce?

When customers have to click on a link in a digital ad or social media post that redirects them to an online store, each extra click could be a drop-off point where shoppers might lose interest — and you might lose a sale. Instead of sending shoppers to another online store, social commerce brings the storefront to the customer on their preferred platform.

Examples of social commerce

Social media is now the primary way that young people learn about new products. Gen Z (24%) and millennial women (20%) most often hear about new products from social media influencers, followed closely by advertisements on social media (23% of Gen Z and 19% of millennials).²

To tap this large market, in-app purchases offer a streamlined shopping experience. In a few clicks that allow the user to remain in the social app, social commerce accelerates the transaction while removing the friction of the traditional sales funnel and reducing the risk of abandoned carts.

Forms of social commerce include:³

Shoppable posts – Unpaid organic social media posts made by a company that include purchase links.
Ads – Paid advertisements with shoppable links that will appear in a social media user’s feed (we’ve all been captivated by TikTok ads).
Influencer content – Companies will pay a social media influencer to promote and link to their products in their posts. Influencers gain their status by having many followers and established credibility on social media platforms.

Benefits of social commerce for small brands

By combining the growing popularity of social media with the convenience of online shopping, social commerce can help small businesses in the following ways:

Increase brand visibility. With more than 3 billion users, social media platforms can help you get your products in front of more people and exponentially grow your customer base.
Make shopping interactive. Social platforms allow a more interactive shopping experience than typical e-commerce on a company’s website. For example, users can tag their friends if they want to share a great deal or request recommendations. They can even message brands directly to ask questions about a product and get more personalized service.
Streamline the sales funnel. The traditional online buying process involves several steps and redirects. Social commerce accelerates this process with in-app checkout, bypassing the extra measures that can frustrate shoppers to make your sales seamless and convenient.
Target the ideal audience. By selectively displaying baby products to new moms or filtering feline fashion for cat ladies, for example, social commerce can help small brands execute hyper-targeted campaigns tailored to specific niches.
Level the competitive playing field. While costly national advertising campaigns are typically reserved for large brands with big budgets, social media is accessible to the smallest brands and solopreneurs. Turning your social fanbase into satisfied customers can be a cost-effective way to compete with the bigger brands.
Gain valuable customer data. Social media platforms can provide a wealth of detailed data about your customers, their interests and buying behaviors — unlocking valuable insights that can guide the rest of your sales strategy.

Depending on where and how your target audience tends to socialize online, certain social commerce tools may offer unique benefits.

5 best platforms for social commerce

Only a few social sites offer truly native social commerce features, but many other platforms are starting to integrate shopping options. Here are the best social commerce sites for small businesses:

1. Facebook

When most brick-and-mortar retailers shut down their stores during the pandemic, Facebook responded by launching its social commerce tool, Facebook Shops, to help small businesses build digital storefronts. These free, mobile-friendly shops let brands import existing inventory or create new product catalogs within the platform.

The Facebook Shop tab in the mobile app showcases products based on specific preferences to help users discover personalized picks and then complete their purchases inside the app or on your website. Brands and customers can communicate through Messenger throughout the process for a more interactive purchase.

Facebook is the top social commerce platform in the U.S., with more than 56 million buyers as of 2022.⁴

2. Instagram

Owned by Meta, Instagram Shopping links directly to your Facebook Shop once your business Instagram account connects to your Facebook business profile. The visual nature of this photo-based app offers plenty of opportunities for brands to promote products creatively. For example, brands can share shoppable posts or Stories that link directly to product pages within the app.

3. Pinterest

Technically, Pinterest does not offer true social commerce because it redirects users to product landing pages on your website to complete their purchases. However, with 64% of Pinterest users actively searching for products and shoppers spending twice as much here as they do on other platforms, according to Pinterest, this inspirational site can put your brand in front of ready buyers.⁵

4. TikTok

With more than 1 billion active users, the short-form video-sharing app, TikTok, has a knack for making unknown users go viral overnight.⁶

TikTok recently expanded its social commerce features by partnering with Shopify to add shoppable storefronts that let brands sync their product catalogs and tag products in their posts. Users can choose to shop directly from the in-app storefront or click through to the brand’s online store for checkout.

According to TikTok, 47% of users say they’ve purchased a product they saw on the platform.

5. Snapchat

Snapchat is also rolling out new shopping options for its 500 million monthly users.⁷ The platform recently launched business profiles, allowing brands to add Shop pages, where users can browse products and make purchases directly in the app. Users can even try on clothing and accessories virtually, using augmented reality lenses to visualize how apparel might look in real life.

How to be safe while using social commerce

Social media has revolutionized how brands interact with consumers, but to reap the benefits of social commerce, small business owners also need to understand the pitfalls that accompany this growing trend.

Just as you’d take precautions to protect your physical storefront with security systems and locked safes, cyber security should be a top priority for any small business invested in e-commerce. Unsecured digital storefronts can leave sites vulnerable to financial fraud, spam, phishing and other cyber attacks. In addition, a single data breach can be detrimental to your bottom line and the reputation and relationships you’ve built with your customers.

Cyber security insurance can shield your small business from the damaging impact of a data breach. With cyber insurance, small businesses have a way to mitigate the risks of social commerce and safeguard against the backlash of a breach — allowing you to focus on sales instead.

Be your own e-commerce influencer

Ready to dive into social commerce? Small business crafters can especially benefit from getting their unique products in front of a mass social media audience. Thimble’s Crafters’ Insurance covers the equally unique needs of all types of makers, including apparel makers, candlemakers, jewelry makers, leatherworkers, soapmakers, artisans and potters.

Getting your crafting covered can be as simple as making an in-app purchase on social media. Download Thimble’s app or click “Get a quote,” answer a few simple questions, and you can be covered before your next follow.

Get a quote

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Written on September 19, 2022 | Last updated: February 21, 2024

Our editorial content is intended for informational purposes only and is not written by a licensed insurance agent. Terms and conditions for rate and coverage may vary by class of business and state.

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