Social commerce is shifting global economic power to smaller creators, influencers and sellers as they find new channels to attract consumers, according to Steve Lammertink, Founder and CEO of The Cirqle.
This change is partly due to drastic change in how consumers shop as a result of the pandemic as well as increasingly louder calls among consumers to buy local and support small businesses. These two factors powered the social storefronts.
Lammertink added that social commerce distinguishes itself from traditional e-commerce as it blends buying and selling with urgency across communities.
The sector is poised to contribute significantly to e-commerce as consumers increasingly shop on social apps. Millennials and Gen-Z populations will comprise over half of the global population by 2030. As these cohorts age, their spending power will grow significantly with their dominance.
Globally, social commerce is expected to grow to $1.2 trillion by 2025, up from $492 billion currently, driven in great part by Millennials (33%) and Gen-Z (29%), with Gen-X (28%) and baby boomers (10%) trailing behind.
Younger customers have turned away from ads and learned to organically trust recommendations by people—family, friends, communities, and influencers – to influence their buying decisions. For this demographic, social commerce offers more authentic connections between consumers and brands than traditional linear e-commerce.
The growth of social commerce will likely alter platforms and advertising strategies in that their ad data models must reflect the right amount of authenticity, humanity and convenience to truly succeed.