Most of us admittedly spend too much time on social media these days. So, it comes as no surprise that a new study by Accenture found that the $492 billion global social commerce industry is expected to grow three times as fast as traditional e-commerce to $1.2 trillion by 2025.
This growth is predicted to be driven primarily by Gen Z and Millennial social media users, accounting for 62% of global social commerce spend by 2025, the information technology company found.
According to Accenture’s report, “Why Shopping’s Set for a Social Revolution,” social commerce means a person’s entire shopping experience — from product discovery to the check-out process — takes place on a social media platform. Just under two thirds (64%) of social media users surveyed said they made a social commerce purchase in the last year, which Accenture estimates to reflect nearly 2 billion social buyers globally.
“The pandemic showed how much people use social platforms as the entry point for everything they do online — news, entertainment and communication.” said Robin Murdoch, global software & platforms industry lead at Accenture, in a statement. “The steady rise in time spent on social media reflects how essential these platforms are in our daily life. They’re reshaping how people buy and sell, which provides platforms and brands with new opportunities for user experiences and revenue streams.”
And this could be good news for retailers and brands. While the opportunity is significant for large businesses, individuals and smaller brands also stand to benefit said Accenture. More than half (59%) of social buyers surveyed said they are more likely to support small and medium-sized businesses through social commerce than when shopping through e-commerce websites. Furthermore, 63% said they are more likely to buy from the same seller again, according to Accenture.
While this is a positive, some users are concerned with privacy and data protection. Half of social media users surveyed indicated they are concerned that social commerce purchases will not be protected or refunded properly, making trust the biggest barrier to adoption, as it was for e-commerce at its beginning.
“Those who have yet to use social commerce say one reason they are held back is their lack of trust in the authenticity of social sellers, while active social commerce users point to poor policies on returns, refunds and exchanges as an area for improvement,” added Oliver Wright, global consumer goods and services lead at Accenture. “Trust is an issue that will take time to overcome, but the sellers who focus on these areas will be better positioned to grow market share.”