Social media shopping is becoming a dominant force in the fashion retail industry, with a predicted growth rate that is three times higher than traditional e-commerce. According to a report by Accenture, the global social commerce industry, which is currently valued at $492 billion, is expected to reach an astounding $1.2 trillion by 2025.
The driving force behind this growth is anticipated to be Gen Z and Millennial social media users, who are projected to account for 62% of global social commerce spending within the next three years. However, it is important to note that older generations still hold a substantial share of social commerce spending, making up the remaining 38%.
The report conducted by Accenture surveyed over 10,000 social media users, revealing that 64% of them had made a social commerce purchase in the past year. This means that almost 2 billion people around the world are engaging in the entire shopping process within social media platforms, from discovering products to completing the checkout process.
The report also highlights the expected growth in specific product categories within social commerce. Clothing is predicted to become the top category by 2025, accounting for 18% of all social commerce, followed by consumer electronics (13%) and home décor (7%). Additionally, the beauty and personal care category is projected to rapidly gain ground on e-commerce, capturing over 40% of digital spending on average in key markets by 2025.
One interesting finding from the report is that consumers in developing countries are more inclined to embrace social commerce and make purchases through social media. For example, 8 out of 10 social media users in China rely on social commerce for their purchases, while the majority of users in the UK and US have not yet embraced this shopping channel. However, this trend could change rapidly as consumers in developed markets recognize the potential of social commerce.
The report also highlights the shifting priorities of consumers in different countries. Shoppers in China, India, and Brazil prioritize features that aid in the discovery and evaluation of potential purchases, while those in the UK and US prioritize pricing and discounts.
Trust emerges as a significant barrier to the widespread adoption of social commerce, as half of the social media users surveyed expressed concerns about the protection and refund policies of social commerce platforms. Trust is particularly important to older generations, who prioritize security features and familiarity with brands. On the other hand, younger shoppers are more attracted to livestreams and place greater faith in buyer reviews.
Despite these challenges, the report emphasizes the potential benefits of social commerce for both large businesses and small brands/individuals. A majority (59%) of social buyers surveyed indicated that they are more likely to support small and medium-sized businesses through social commerce compared to traditional online shopping. Additionally, 63% stated that they are more likely to make repeat purchases from the same seller through social commerce.
Oliver Wright, global Consumer Goods and Services lead at Accenture, sees immense potential in social commerce as a “levelling force” that empowers smaller brands and individuals while also prompting larger brands to reassess their relevance in a rapidly evolving marketplace. However, succeeding in social commerce will require creators, resellers, and brands to adapt to the preferences and behaviors of consumers, rather than expecting consumers to adapt to them. Collaboration within the dynamic ecosystem of platforms, marketplaces, social media, and influencers will be crucial in delivering the right incentives and the best consumer experience in an integrated digital marketplace.
In conclusion, the future of fashion retail lies in social media shopping, which is set to reshape the industry and revolutionize the way people buy and sell products. With the projected growth of the global social commerce industry and the increasing engagement of Gen Z and Millennial consumers, it is clear that social commerce is here to stay. Brands and retailers must adapt to this new landscape to stay relevant and capitalize on the opportunities it presents.
Useful Links:
– Accenture
– Statista – Social Commerce Statistics
