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Shopping on social media is becoming a more popular option for American consumers, even as platforms continue to tinker to arrive at the right ecommerce experience and shoppers remain uneasy about sharing payment information.
New research from Mintel shared the following data about social commerce:
Buying from the feed: Nearly half – 47% – of U.S. consumers have made a purchase through social media, while six in 10 are interested in doing so. There are also signs of satisfaction, as 39% have made a purchase on social media and would do so again.
Growing share: Social commerce made up about 5% of U.S. ecommerce sales in 2022, and is expected to grow to 7% by 2025.
Changing channels: When it comes to a breakdown by platform, 75% of US consumers say they have shopped on Facebook – driven by Facebook Marketplace. Meanwhile, 50% have shopped on Instagram, 29% on YouTube and 18% on TikTok.
Live buying: 46% of Americans have purchased from a livestream, and would do so again, while 22% pay attention to livestreaming from brands.
The data indicates that U.S. consumers are showing interest in social commerce, but it remains a nascent area. Americans are used to discovering products through ads and affiliate posts on social channels, but largely continue to make purchases through marketplaces and brand websites.
While U.S. social commerce adoption is expected to grow, the pace of expansion is slower than in China, where social media platforms and livestreaming are more widely embraced shopping channels. In 2021, China saw $327 billion in livestreaming sales in 2021, accounting for 10% of overall ecommerce, according to Mintel.
There’s a continued debate in ecommerce circles about whether U.S. social commerce will ever rise to the level of China. Much of this centers on livestreaming, which has yet to find a foothold on the major social platforms. Facebook and Instagram both ended livestreaming capabilities in the last year. YouTube and TikTok’s capabilities are still nascent in this area. eBay is embracing a focused approach around collectibles. Firework is showing a different approach to livestreaming that is more concentrated on moments within the buying journey of a marketplace or DTC site, rather than a QVC-style session on a platform. There are successes to report on each of these fronts, but the right formula has yet to emerge.
To grow social commerce, the platforms must also have the right journey in place that allow brands to effectively promote and sell products, and users to check out onsite. Many of these features are still under development. This week, YouTube opted to sunset product tagging, and opt for an affiliate program. Instagram removed its Shop tab from the home navigation last month, and made room for multiple links in bio this week. TikTok and Pinterest have been loud about building ecommerce into their respective platforms, but their shopping-focused ad products are still new. While platforms work out the right configuration, marketplaces are looking more like social media. Amazon and Walmart recently rolled out features that are closer to TikTok than their traditional search-driven formats. But, as with livestreaming, these are pilots. Platforms have yet to find the approach that works at scale.
It’s a time for brands to experiment with tactics, too, said Katie Hansen, senior retail and ecommerce analyst for Mintel Reports US.
"Consumer interest in social commerce is shining a bright light on the future of the shopping channel,” said Hansen, in a statement. “Brands need to consider what consumers need to move past current hesitations and barriers. For example, getting more for less is always appealing; brands could look to offer special prices for first-time social commerce buyers. Even simple measures such as offering money-back guarantees or highlighting free returns could give consumers the confidence they need to give social commerce a try.”
In the U.S., ushering in social commerce will require an ecommerce behavior change. Consumers are shifting from checking out on a marketplace to checking out on a social platform. This means they will be providing payment information and other key details to a platform, where previously it went to Amazon or directly to a brand. Giving up this info requires trust, and there is still a big deficit in this area to overcome.
Mintel found that while 41% of consumers were comfortable purchasing from a brand’s website, only 17% felt good about making a social media purchase.
Some of this comes down to data, as 40% say they lack trust in the security of their payment information. But there is room for gains to be made with the right education and engagement. If they knew their data was being kept secure, 35% said they would be more interested in shopping on social media.
“Trust in data security is a key concern among US consumers shopping on social media,” Hansen said. “Brands that provide testimonials to showcase the validity of their products and the security of the purchasing channel will further instill trust and win over consumers.”
- How Walmart is experimenting with shoppable content | Retail Dive ›
- Is social commerce the future of DTC? | The Drum ›
- Shein is the most-downloaded app in the US | Marketplace Pulse ›
- Amazon and Walmart take new steps for social commerce ›
- Singles' Day: The US can learn from China's ecommerce extravaganza ›
- Social commerce market: US brands' strategies for growth | McKinsey ›
- The Future of Shopping: Growth of Social Commerce | Accenture ›
- Social commerce in the United States - statistics & facts | Statista ›
- Key Social Commerce Statistics You Should Know in 2023 ›
- Social Commerce 2023: Brand Trends & Marketing Strategies ›
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Labor disputes on the West Coast could cause further disruption heading into peak season.
When the first half of 2023 is complete, imports are expected to dip 22% below last year.
That’s according to new data from the Global Port Tracker, which is compiled monthly by the National Retail Federation and Hackett Associates.
The decline has been building over the entire year, as imports dipped in the winter. With the spring, volume started to rebound. In April, the major ports handled 1.78 million Twenty-Foot Equivalent Units. That was an increase of 9.6% from March. Still it was a decline of 21.3% year over year – reflecting the record cargo hauled in over the spike in consumer demand of 2021 and the inventory glut 2022.
In 2023, consumer spending is remaining resilient with in a strong job market, despite the collision of inflation and interest rates. The economy remains different from pre-pandemic days, but shipping volumes are beginning to once again resemble the time before COVID-19.
“Economists and shipping lines increasingly wonder why the decline in container import demand is so much at odds with continuous growth in consumer demand,” said Hackett Associates Founder Ben Hackett, in a statement. “Import container shipments have returned the pre-pandemic levels seen in 2019 and appear likely to stay there for a while.”
Retailers and logistics professionals alike are looking to the second half of the year for a potential upswing. Peak shipping season occurs in the summer, which is in preparation for peak shopping season over the holidays.
Yet disruption could occur on the West Coast if labor issues can’t be settled. This week, ports from Los Angeles to Seattle reported closures and slowdowns as ongoing union disputes boil over, CNBC reported. NRF called on the Biden administration to intervene.
“Cargo volume is lower than last year but retailers are entering the busiest shipping season of the year bringing in holiday merchandise. The last thing retailers and other shippers need is ongoing disruption at the ports,” aid NRF Vice President for Supply Chain and Customs Policy Jonathan Gold said. “If labor and management can’t reach agreement and operate smoothly and efficiently, retailers will have no choice but to continue to take their cargo to East Coast and Gulf Coast gateways. We continue to urge the administration to step in and help the parties reach an agreement and end the disruptions so operations can return to normal. We’ve had enough unavoidable supply chain issues the past two years. This is not the time for one that can be avoided.”