Posted by Social media has transformed the way society interacts and shares information, and now the world is more connected than ever. A connected audience allows for unfiltered and genuine interactions between individuals, and brands, who would otherwise never meet. Along with the rise of the COVID pandemic came the rise of Tik Tok and its short form videos. These two prominent events in modern history made way for the final push to truly transform social commerce into a viable marketing and commerce platform. Q1 and Q2 of 2021 (peak COVID) saw the creator economy receive over $2B of investment, with creator services and creator platforms seeing the most attention by investors. As such, social media has given rise to “influencers,” popular individuals who have leveraged the online platform effectively, and built a following conducive to mass population interaction. Combined with the personal touch of video, social commerce has seen itself slowly making a name and taking its place in the market. In our research, we’ve outlined the entire social commerce landscape, with main sub sectors within the umbrella of social commerce: Creator Commerce, Creator Marketplaces, Video Commerce, and Social Listening. We will discuss the definition and implication for each.
Creator Commerce
It is no question that the COVID pandemic gave creator commerce the necessary push to truly take the scene. Having been placed on lockdowns while receiving stimulus checks resulted in a unique, and brief, economic upturn for both consumers and providers. Adaptation to the new remote style of work and play became crucial for brand survival, and creator commerce became the perfect medium to bridge this gap between the two groups. Creator commerce platforms allow brands to partner with influencers and creators with built in revenue sharing and contractual agreements, in order to either employ such creators on existing platforms such as Tik Tok or Instagram or within the platform itself.
With over 2 million professional influencers and 48 million amateur creators, the market for influencer marketing and creator commerce is as strong as ever. Established incumbents such as YouTube, Instagram, and Twitch are prime examples of the successful and almost corporate nature of the creator commerce field. Massive audiences and an abundance of advertisement money allow for creators to stream and upload personal videos and content. With the aforementioned platforms sharing advertising revenue, creators are strategically enticed to further content-create. According to data published by Influencer Marketing Hub, 2.1 million US creators on YouTube have earned a collective $4 billion in revenue, 5.6 million US creators have earned $461 million on Instagram, and nearly 10000 creators on Twitch have earned a cumulative $87 million.
With a large selection of potential influencers of varying levels and follower amounts, these creator commerce platforms typically offer interested brands and advertisers a host of influencer management tools. These tools include influencer discovery capabilities for brands that allow for discrete and specific targeting with customizable filters for desired audiences including age, gender, ethnicity, etc. Influencers are able to be filtered according to these requirements and allows for a perfect match between a prospective brand and an influencer. In addition to influencer discovery, many platforms such as Klear also feature built-in AI powered influencer vetting capabilities, to ensure only the highest quality of influencers are available for partnership.
Some platforms creator commerce platforms such as Creatable also provide an integrated social media style hosting. With X-style (formerly Twitter) timelines and TikTok-style video hosting activity feed, these platforms are fully fledged social media platforms with the added ability for creator commerce and revenue sharing.
Video Commerce
Video commerce is another subfield of social commerce. With the vast popularity of TikTok and its short form video achieving a staggering statistic of 167 million short form videos watched per minute, the general trend amongst consumer media consumption is definitely amongst video. That being said, TikTok features a general mixture of both professional video creators and the amateur for-fun creators, and the advertising revenue shared on TikTok is a meager 2-4 cents per 1000 views, compared to the $18 average per 1000 views on YouTube.
Despite the massive traffic and myriad of creators on TikTok, the mass amalgamation of ‘random’ and generally untargeted video content conducts a drive for a dedicated video commerce platform, solely intended for brand advertisement and influencer marketing. Platforms such as Kakao’s Grip and Amazon Live are intended as a dedicated video commerce platform, with professional, on-demand influencers constantly advertising and conducting live product demonstrations for partnered brands, with integrated video, Q&A, and live commerce capabilities.
Video and livestream capabilities allows for influencers to try-out different items of choice and showcase the features to a live audience. The audience is given the opportunity to ask questions live and for brands to receive instant product feedback. The live aspect of video commerce is also coupled with live commerce, with interested customers being able to purchase demonstrated products directly through the stream and platform.
Creator Marketplaces
Perhaps the most original form of social commerce, Creator Marketplaces, like Etsy, allow for creators to set up personalized boutique shops and sell their own products and services. These marketplaces generally provide a built-in ecommerce infrastructure that allows for an all-in-one solution for a personal online store. Integrated no-code and low-code customization tools are friendly for any level of expertise. These marketplaces have seen themselves establish a significant share of the entire social commerce umbrella, with Esty seeing itself an impressive 467 million monthly users, and US creators on Etsy earning an estimated total of $1.45B of revenue.
Social Listening
The mass aggregation of social data allows for public sentiment to be easily realized, with “Trending” topics on major social media platforms proving to hold impacting consequences on the more real parts of our lives. The implications of social media trends and data have garnered significant interest with different brands, and social listening platforms such as Meltwater and Cision conduct a thorough and comprehensive analysis of live trends through their multitudes of data streams including popular social media platforms such as Reddit, Pinterest, Instagram, Facebook, X, and TikTok.
These platforms aggregate all of the social media data and provide a myriad dashboards and visualizations to provide a live view of current trends and sentiment amongst users. These platforms allow for both precise and broad targeting of social media data, with search queries able to specify any number of desired data points such as brand sentiment, audience engagement, specific product feedback, and influencer metrics.
Conclusion
The world is more connected than ever, and the internet has become a central outlet of both production and consumption. The advent of social media and its influencers as well as the potential for millions of users to be reached concurrently has proven social commerce to be a viable method to navigate the consumers of the online world.