Social Commerce: No Longer The Wild West, awash with fraud and manipulation?

From heated hair crimpers to limited edition trainers to designer bags to picturesque holidays to levitating lamps to weighted hula-hoops - fans of TikTok and Instagram will know how easy it is to buy any of these products from these social media platforms at a click of a button. According to Deloitte Global, worldwide social commerce sales are expected to surpass $1 trillion this year, driven by over two billion people shopping on social platforms. You just have to look at the TikTok hashtags #AsSeenOnTikTok and #TikTokMadeMeBuyIt - with over 29 billion views - to see the change in consumer behaviours. But what is behind this explosive growth? Is it solely the buying power of Gen Z or are there other factors at play? What is the role of entertainment on social commerce platforms? And how is social commerce shifting buying behaviours?

In the UK, brands like Boots are taking advantage of this lucrative space and utilising user generated content (UGC) specifically with shoppable ads across social media platforms.

So how is the industry effectively harnessing UGC to amplify authenticity, foster creativity, and enhance customer engagement in the realm of social commerce? What metrics are employed to measure the success of UGC in these ads? And do the basics of marketing still apply? We asked the industry experts for their opinion.

Marialena Michailidou, group digital marketing lead, TUI

One of the constant struggles for brands has always been to find new ways of engaging with their audiences across social media. A common question for all advertisers has been - how do we make users to stop scrolling and pay attention to our content? Which is to move the needle into the product consideration journey with the ultimate goal to shop. For a long time, the guidance has been short form content being better, brand logo first, key message in first 3s etc and some of these guidelines still apply for certain advertising placements.

However, with the drastic rise in number of users across new social media channels such as Tik Tok, expecting to reach 2 billion users by end of fiscal year 2024, media consumption behaviour has changed along the nature of the platforms. Users are now more eager to watch longer content as long as it fits the look and feel of the platform, current trends and social issues. The importance of user generated, creator content and/or any content with native look and feel to the platform is increasing.

What goes hand in hand with the focus on more native, UGC is how to link the incremental impact of this type of activation to overall sales. Constant testing and measurement of qualitative and quantitative impact is crucial. Incrementality studies offered by different partners can show the percentage of incremental purchases coming from such activations against business as usual.

As part of our fiscal year 2024 roadmap at TUI, we will be testing more and more with creators’ content to understand further the value and impact to our lower funnel activity. We will be partnering with Smartly and other tech partners to ensure scale and automation as opposed to one time activations.

Kris Boger, general manager, TikTok UK, global business solutions

Over the past year or so, we've been witnessing a new wave of commerce culture in the UK and TikTok is becoming central to this. 'Community commerce' - which sits at the intersection of community, entertainment and shopping - is catching alight in the UK. By creating entertaining content that the TikTok community is inspired to co-create with, brands can get closer to their customers and make shopping much more seamless.

When companies use UGC as part of their storytelling, it helps to build relationships with the TikTok community and drives results. Creators offer brands an opportunity to deepen audience connections, with hyper-engaged communities, amplify brand perceptions, reinforce authenticity and ultimately influence real world behaviour and sales. Independent research shows that 69 per cent of people on TikTok researched a new product after seeing a creator video.

At TikTok, we've introduced a range of tools to help brands connect with creators and the wider TikTok community to drive purchasing, such as our Video Shopping Ads (VSA). VSA are a powerful way to supercharge sales because they help brands connect with communities on TikTok and meet shoppers wherever they are in the purchase journey.

When it comes to UGC, the way each brand measures success will vary depending on their objectives, but we regularly see brands report tangible sales increases off the back of creator-led content. UGC is a hugely powerful tool for any retail marketer, regardless of how big or small their budget is.

Debbie Ellison, global chief digital officer, VMLY&R Commerce

There’s no one better placed than me to talk about the lure of social commerce. In fact, I buy so many products from my social feeds that I’m convinced I shop in my sleep. Social has managed to converge the connection between explore and buy, beyond even our wildest predictions, resulting in social commerce being forecasted to deliver $6.2 trillion globally by 2030.

Many brands and retailers are grappling with how they will secure their fair share of this growth. Much easier in countries like China, where platforms are seamlessly integrated - nearly impossible everywhere else where social, ecommerce and payment platforms remain completely siloed, creating barriers to purchase in every direction.

My aspiration is that not only will this very tangible challenge be resolved but that brands and retailers look at social commerce as a new route to consumer. Not just another channel for their existing consumers to buy but an opportunity to deliver net new revenue growth by appealing to shoppers who remain under-served in physical and digital retail spaces.

Social commerce gives us a unique ability to capture the attention of shoppers with specific needs that we can satisfy with a differing product portfolio or offer unavailable in other channels – connecting them emotionally and rationally with influencers that make them feel like brands really understand them.

This is the true power of social commerce and I for one, can’t wait to see it.

Jo McClintock, vice president, brand and marketing, Trainline

UGC has been around in one form or another for many years. It's now a core part of the marketing mix. Channels change, trends emerge, and brands must work out where to show up to hit their goals and if UGC has a part to play.

Deciding on that for me is down to three things:

• your objectives

• target audience

• the idea.

Depending on these I look across a multitude of metrics - reach, engagement, CTRs, CVR, App use, impact on unpaid traffic, brand health metrics. In a world where we fight for attention, UGC can be an effective and impactful way to achieve your objectives - its creative use of formats and agile platforms make it a brilliant candidate. What excites me most is how this evolves the role of search in the purchase journey - I now search for my gardening tips on social platforms and there are creators aplenty!

I've been lucky to work with some stand out creators on our sustainability platform I Came By Train - the brief was to make rail famous for being sustainable and feeling a true sense of pride in having made the choice to switch or pledge to switch one journey. The metrics were to drive awareness and we measured this through platform metrics and broader brand metrics - it worked beautifully.

Guillermo Dvorak, managing partner of digital and data, Total Media

E-commerce has had an incredible revolution over the last ten years, but the biggest change that resulted in the rise of brands in social media was the shift to mobile devices. We have seen incredible leaps and bounds by pushing brands to have mobile-ready websites, to innovate with their apps and how they engage with consumers.

In 2022, 4.6 billion people (58 per cent of the world’s population) were active social media users, spending an average of 2 and a half hours of their day on it. Additionally, 64 per cent of buyers discover brands via social media, and 33 per cent discover new products by what is trending.

UGC brings a level of authenticity that is new in the industry. We are used to seeing movie stars and models in glossy ads. UGC flips that with realistic applications and usage of the products, allowing us as marketers to track engagement in different ways, which allows us to track it down to conversion levels.

Julie Chadwick, joint managing director Dentsu Creative

We know that native and authentic content performs better on social – that’s not news. Yet look at some of the biggest brand campaigns today and it’s clear their creative investment is spent on awareness and those functional bottom-of-the-funnel catalogue ads are left to sweep up customers as we apparently all drop neatly down the funnel with our wallets open.

In reality, social commerce has collapsed the funnel, introducing an era of genuine creative commerce, driven by real people. User generated content from customers, creator-led content and social experiences like live shopping are all driving the growth of social commerce and shaking up the retail media landscape.

It’s no surprise when 90 per cent of people say they are more likely to purchase following a friend or family member’s recommendation, and when four-in-five are more likely to buy after participating in a livestream event or conversational commerce. These shifts are transforming the way people shop online.

At Dentsu, we’re creating a new ecosystem for brands that combines their paid, owned and earned strategies to deliver social-first commerce, not just commerce with a social plug-in. In turn, we’re bringing ecommerce opportunities to the very forefront of native social experiences.

Guy Peters, strategist, FCB

Retail marketing has long been focused on two things: improving the experience for the buyer and reducing the barriers to purchase. In the 1900s department stores turned shopping into an experience while making it easy to buy products in one place. In the 2000s, Amazon supercharged this by bringing the department store into the home, drastically shortening the buyer journey. Social commerce now takes this one step further.

Social commerce takes the experience to the next level: “shoppable entertainment”. TikTok offers a unique way of selling, one which doesn’t feel like selling, one that’s designed to shock, surprise and delight while feeling like a recommendation from a friend. The content that’s out there isn’t polished, but TikTok doesn’t want polished, they want things to be real and authentic.

This is where UGC can be impactful, the most successful brands in this space understand that creators know how TikTok works and what people will find interesting. What’s more, users don’t see it as an ad which prevents them from filtering it out. Brands (like Walmart and Boots) that use UGC most effectively are those that let the creators do their thing and adapting to the platform.

The final advantage to social commerce is the trackability of it all. What matters to each brand will be unique, for some it will be total sales (especially if they have a TikTok shop) but for others it will be viewability or average view time as these give an indication of interest.

So, whilst social commerce has all the hallmarks of a big step change at a basic level it is a logical evolution of what's gone before... the department store and then Amazon. The evolution will march on and in the future it'll become ever easier to shop, ever more fun, immersive, and experiential.