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Shopping in a collective – Social commerce is evolving into social group buying

Social Commerce: Two women shopping online together
Image: © Robert Kneschke | Adobe Stock

Social commerce as a shared experience

The best shopping recommendations come from friends who shop together. Can this analog shopping experience be grafted onto eCommerce? Yes, that works. This is currently proven by social shopping services such as the Berlin-based start-up Groupify or the Chinese counterpart, Pinduoduo, which has been on the market since 2015. After landing its first customers, such as food shipper VEGAN BOX, Groupify also managed to win over several shops from the Otto Group.

The principle behind the new social shopping: Rather than recommend a product to a friend at the farthest end of the funnel, users shop together in an online shop and profit from attractive discounts. In the case of Groupify, this is done through the Shop page: The Groupify button appears as an overlay and gives the user an opportunity to invite two friends to shop by sending them an encrypted link via WhatsApp or Messenger. If they respond to the encrypted links sent to them, the system recognizes the group and discounts the purchase for all three. A communication feed is available on which they can also discuss their shopping.

3 Social-commerce benefits to merchants

The expense to merchants for this social-shopping option is manageable. Groupify, for example, works with classic voucher codes that can be redeemed in the vast majority of shop systems. Merchants will also be interested in the following aspects:

  1. Costs: The merchant can list the discount under its normal canvassing costs, for things such as advertising. The SaaS model is also easy to scale.
  2. Canvassing: In the best-case scenario, the merchant gains two new customers at once who in turn will be potential follow-on buyers.
  3. Usable data: Because they are making a purchase not as the result of a gift but to receive a discount, shoppers can be presumed to have a high level of product affinity.

 

130 million users
click on an Instagram shopping entry every month.

Social commerce on Insta et al. is still a lonely place

But what about social shopping on Instagram et al.? This is where social commerce is still mainly about Shoppable posts: Here, ads on social media direct traffic to a particular shop. Accordingly, “social” mainly stands for an offer proposed through a social network. Recently, Instagram has taken things a step further and has begun showcasing a Direct-to-consumer approach, particularly among “Generation Z” accustomed to simple online shopping in a matter of a few clicks. The complete ordering and payment process is handled directly within the app. The first tests are under way in the US, and an introduction to the German market is expected before long. So eCommerce providers have a great deal to look forward to. After all, the potential is there: According to the company’s own reporting, a full 130 million users click on an Instagram shopping entry every month. But even if this makes social commerce more intuitive, more effective and quicker, on social networks, the shopping experience is still a lonely one.

More “We” in social commerce

Three girlfriends go shopping online together – no problem, thanks to this combination of social discovery and group buying. The new social-commerce approach promises success, particularly in high-recommendation areas such as fashion and beauty. To a large extent, the customer journey in the shop is traveled together – this type of social commerce is rethinking the topic of recommendation marketing from the ground up. The tell-a-friend button that appears once the ordering process is complete, on the other hand, looks almost a bit old-fashioned by comparison.

Katja Schulz
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