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In the D2C Journey, Social Commerce Plays a Vital Role

Direct-to-consumer channels provide a path to differentiation outside of physical retail and third-party e-commerce partnerships.

Social commerce is quickly becoming a coveted channel for consumers, and with Facebook's newest platform -- Facebook Shops -- brands have yet another way to engage with consumers online. 

Building on Facebook's existing Marketplace and Instagram Shopping platforms, Shops allows sellers to quickly set up a digital storefront where consumers can engage with brands through organic content, video and ads, with depolyment across all Facebook-owned apps, including Instagram Direct, Messenger and Whatsapp.

While Facebook Shops was initially released to help small businesses navigate distressed sales during the COVID-19 pandemic, large Consumer Products (CP) companies should be paying attention when developing their own omnichannel strategies.

Unlike brand websites and marketplaces, direct-to-consumer (D2C) channels provide a path to differentiation outside of physical retail and third-party e-commerce partnerships by giving CPs more control over the experience consumers have when buying their products. Social commerce platforms go one step further by having the benefit of being present where consumers are already spending their time and, in many cases, have already expressed their brand and product preferences – revealing key first-party consumer insights crucial to elevating customer experiences.

The evolution of social commerce isn't limited to just Facebook either. Platforms like Pinterest and TikTok, which amass larger, mobile-savvy Gen Z audiences, have also been upping their e-commerce capabilities to cater to brands as adoption increases. Research shows that 85 percent of Gen Z consumers learn about new brands on social media and eMarketer anticipates more than 75 million U.S. consumers will make at least one purchase through social channels in 2020 – an increase of more than 17 percent from 2019.

The data make sense - these channels are inherently consumer-centric, with audiences flocking to social media for entertainment, networking and experiences with their preferred brands. With the average internet user spending nearly 2.5 hours per day on social media and an overall increase in desire to shop online, it’s only natural that these platforms will see an uptick in commerce usage.

 

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Social commerce and D2C

For CPs, leveraging behavioral data and insights provided by social commerce provides greater return on investment when considering pricing, promotions and product placement. For example, CPs can use data to showcase catalogs of items across different social platforms in a more curated way, with products most likely to sell placed front and center. In-platform messaging and chatbots let consumers engage directly with brands for customer service inquiries, product information, shipping updates, usage support and returns all within channels where consumers are already comfortable.  

When coupled with other owned D2C models like subscription services, knowledge hubs and brand website e-commerce, the direct relationship to the consumer is strengthened – giving CPs the ability to collect rich consumer data  and develop a more holistic, 360-degree view of how a customer interacts with their brand across every stage of the shopping journey.

With social commerce added to the mix, CPs can create engagement experiences tailored to a buyer’s social media preferences and usage habits. This creates more cohesive brand experiences across channels, driving deeper loyalty and increasing customer lifetime value over time.

Understand the value and investing properly

While the value of D2C to consumers is obvious, one of the primary reasons CP companies hesitate to go direct is a lack of understanding of the full value the offering can bring to the business. Brand managers and even digital channel owners stop at measuring value simply in terms of revenue streams and once the costs of servicing the business are factored in, the case for investment is rarely made. But a D2C offering, especially one that crosses multiple touch points can bring value to the business beyond revenue.

As CPs continue to focus on their digital transformation and social commerce remains on the upswing, it’s important brands take an omnichannel approach by evaluating different ways to go direct, assessing resources and meeting the changing needs of their consumer to maximize the value of their D2C investment.

Kristen Groh
Kristen Groh
Vice President, Consumer Products, North America

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