Cracking The Code: Differentiating Social Commerce From Traditional E-commerce

Have you ever wondered about the booming phenomenon of social commerce?

With the continuous evolution of technology, the way we shop has drastically transformed. Social commerce, a term buzzing across the digital landscape, has sparked curiosity and intrigue among consumers and businesses.

But what exactly sets it apart from traditional e-commerce?

Today, social commerce is revolutionizing how we buy and sell goods or services directly within our favorite social media platforms.

This seamless integration of shopping into our social experiences is reshaping the retail landscape as we know it.

But why all the hype?

Well, the numbers speak for themselves.

Social commerce is projected to grow exponentially, with the global market estimated to skyrocket to a staggering $1.2 trillion to $2 trillion by 2025.

In the United States alone, retail social commerce sales are expected to soar to nearly $80 billion by the same year, showcasing its undeniable significance in e-commerce.

In this blog, we’ll explore the differences between social commerce and traditional e-commerce, exploring how it shapes the landscape of online shopping and consumer behavior.

Let’s dive in and take a look at the following:

Traditional E-commerce

Definition & Characteristics Of Traditional E-commerce

Traditional e-commerce refers to the buying and selling of goods or services conducted over the Internet through dedicated online platforms or websites.

It involves transactions facilitated by digital means without physical interaction between buyers and sellers. Some defining characteristics include:

• Online Presence: Businesses establish dedicated online stores or platforms to showcase and sell their products or services.
• Transaction Process: Customers browse through product listings, add items to their cart, and proceed to checkout for payment.
• Payment Methods: Various online payment methods, such as credit/debit cards, digital wallets, and bank transfers, are commonly accepted.
• Order Fulfillment: Upon payment, orders are processed, and products are shipped to customers’ specified addresses.
• Customer Support: Traditional e-commerce platforms often provide customer service channels for inquiries, support, and resolution.

Infographic Different Types Of Ecommerce Models

Key Players & Platforms In Traditional E-commerce:

Major players dominate the traditional e-commerce landscape, offering diverse product selections and user-friendly interfaces.

• Walmart: With about 854.9 million monthly visits, Walmart.com is among the most visited e-commerce websites globally.
• eBay: Known for its auction-style listings and vast array of products, eBay attracts a large user base seeking both new and used items.
• AliExpress: As a part of the Alibaba Group, AliExpress is renowned for offering a wide range of products at competitive prices.

Transactional Nature Of Traditional E-commerce

The transactional nature of traditional e-commerce revolves around the exchange of goods or services for monetary value. Key aspects include:

• Mobile Purchases: In the United States, mobile purchases account for 44.2% of all e-commerce sales, highlighting the significance of mobile-friendly interfaces and payment options.
• Consumer Convenience: Customers can shop anytime, anywhere, and enjoy the convenience of doorstep delivery.
• Transaction Security: Secure payment gateways and encryption protocols ensure the safety of financial transactions.
• Order Tracking: Customers can track the status of their orders and receive notifications regarding shipping and delivery.

Examples Of Successful Traditional E-commerce Businesses

Several traditional e-commerce businesses have achieved notable success by leveraging effective marketing strategies and providing exceptional customer experiences.

• Amazon: Known for its vast product selection, fast shipping, and personalized recommendations, Amazon remains a dominant force in the e-commerce industry.

• Best Buy: Specializing in electronics and appliances, Best Buy offers both online and brick-and-mortar shopping experiences, catering to diverse consumer preferences.

• Alibaba: A global e-commerce giant in China that has generated over $700 billion in online sales in recent years, Alibaba facilitates online trade between businesses and consumers through its various platforms.

Now that we’ve covered the various e-commerce models, let’s delve into the dynamic realm of social commerce.

What Is Social Commerce?

Social commerce refers to the buying and selling of goods or services directly within social media platforms.

It integrates e-commerce functionalities into social media networks, allowing users to browse, discover, and purchase products without leaving the platform.

Social commerce leverages the social aspects of online interactions, such as user-generated content, social recommendations, and peer-to-peer influence, to facilitate transactions.

This approach transforms social media channels into active shopping destinations where businesses can engage with their audience, showcase products, and drive sales through targeted advertising and personalized recommendations.

Statistics Showing Why Social E-commerce Is On The Boom?

The surge in social commerce is driven by several factors, as indicated by the following statistics:

• Revenue Growth: Forecasts predict substantial growth in US social commerce sales as it generates revenue of $53 billion in 2024 and reach $107.17 billion by 2025, showcasing a remarkable double-digit increase.
  
  
• User Adoption: Gen Z and millennials lead the charge in social commerce adoption, with roughly half of each generation engaging in purchases through social media. By the end of 2023, it’s estimated that 107 million social buyers will be in the US, constituting nearly 36% of internet users.
  
  
• Platform Influence: Facebook and Instagram emerge as the primary platforms driving social commerce sales, with an estimated 5 million Facebook users making purchases in 2022.
  
  Additionally, Instagram boasts around 41 million buyers, while TikTok witnesses 23.7 million users engaging in purchases, further fueling the ascent of social commerce.
  
  
• Revenue Impact: Social commerce is poised to substantially contribute to marketing-driven revenue for e-commerce, with retail commerce sales in the US projected to approach $80 billion by 2025.

These statistics underscore social commerce’s significant growth, underpinned by escalating user adoption, platform influence, and its burgeoning role in revenue generation.

Popular Social Commerce Platforms

Facebook:

Facebook stands out as the most popular social platform in social commerce trends through Facebook shops, boasting an estimated 5 million users in the US making purchases on the platform in 2022.

Features:

• Facebook Marketplace: Enables peer-to-peer transactions and connects users with social media and local sellers.
• Shops: Allows businesses to create customizable online storefronts within their Facebook Page.
• In-app shopping: Users can browse and purchase products directly within the Facebook app.

Instagram:

Instagram follows closely behind this, with an estimated 41 million buyers purchasing through the platform through in-app promotion.

Features:

• Shopping Tags: Enables businesses to tag products in posts and stories, linking directly to product pages for purchase.
• Checkout: Allows users to complete purchases without leaving the Instagram app, streamlining the shopping experience.
• Shoppable Posts: Integrates product listings into feed posts, providing a seamless shopping experience for users.

TikTok:

TikTok has emerged as another popular option under social commerce trends, with 23.7 million users engaging in purchases on the platform.

Features:

• TikTok Shopping: Integrates shopping functionality into the platform, allowing users to shop for products featured in videos and ads.
• Hashtag Challenges: Brands leverage hashtag challenges to promote products and drive user engagement, creating opportunities for social commerce.

Pinterest:

Pinterest offers a unique social commerce experience centered around visual discovery and inspiration.

Features:

• Shoppable Pins: Users can discover and purchase products directly from pins on their boards, making it a powerful platform for driving sales.
• Idea Pins: Brands and creators showcase products and DIY ideas through Idea Pins, fostering engagement and driving traffic to e-commerce sites.

Snapchat:

Snapchat has introduced various features to facilitate social commerce and connect users with brands.

Features:

• AR Try-On Lenses: Users can virtually try on products like makeup and accessories, enhancing the shopping experience and driving conversions.
• Discover Tab: Features curated content from brands and publishers, providing users with shopping inspiration and opportunities to discover new products.

Differences Between Social Commerce and E-commerce

Integration of Social Interaction:

Social Commerce: Social commerce integrates social interactions such as likes, comments, and shares into the shopping experience, fostering community engagement and trust.

E-commerce: Traditional e-commerce is typically limited to customer reviews and ratings, with less emphasis on real-time engagement and community building.

Platform for Discovery:

Social Commerce: Social media platforms serve as hubs for product discovery, with users stumbling upon products through their feeds, influencer endorsements, and user-generated content.

E-commerce: In e-commerce, product discovery often occurs through search engines, direct website visits, and targeted advertising, with less emphasis on leveraging social networks for discovery.

Influence of Peer Recommendations:

Social Commerce: Social commerce heavily relies on peer recommendations and user-generated content to influence purchasing decisions, leveraging the power of social proof and personal endorsements.

E-commerce: While e-commerce also utilizes customer reviews, user feedback, and testimonials, the influence of peer recommendations is typically not as central to the shopping experience as it is in social commerce.

Seamless Shopping Experience:

Social Commerce: Social commerce platforms offer a seamless shopping experience to their social commerce buyers, allowing them to browse, discover, and purchase products without leaving the social media app.

E-commerce: In e-commerce, the shopping experience often involves navigating through dedicated websites or online stores, with separate checkout processes and payment gateways.

Integration of User-Generated Content:

Social Commerce: User-generated content, such as photos, videos, and reviews, seamlessly integrates into the social commerce experience, enhancing product authenticity and credibility.

E-commerce: While e-commerce platforms may feature user-generated content, it is typically displayed separately from the shopping interface and may not play as significant a role in purchasing decisions as in social commerce.

Here is an infographic showing the other differences between social commerce and e-commerce

Now that we’ve explored the key differences between social commerce and e-commerce let’s examine the striking similarities.

Similarities Between Social Commerce and E-commerce

Digital Transactions:

Both social commerce and e-commerce facilitate digital transactions, allowing customers to make purchases online using various payment methods such as credit cards, digital wallets, and online payment platforms.

In both models, customers can complete transactions electronically, eliminating the need for physical cash or in-person transactions.

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Take a glimpse at our case study showcasing how we aided Wellpaid in managing and monitoring digital payments.

Click here to explore further

24 X 7 X 365 Days Open Stores:

Both social commerce apps and e-commerce apps provide round-the-clock accessibility to their stores, enabling customers to browse and shop at any time of the day or night through their various shopping features, including weekends and holidays.

This 24/7 availability offers convenience to customers, allowing them to shop at their own pace and schedule without being constrained by traditional store hours.

International Selling:

Both social commerce and e-commerce platforms offer opportunities for international selling through their online store, allowing businesses to reach customers beyond their local or national borders.

Through online platforms, businesses can expand their reach to global markets, leveraging the Internet to connect with customers worldwide and facilitate cross-border transactions.

Diverse Product Offerings:

Both social commerce and e-commerce online stores offer a wide range of products and services to cater to diverse customer needs and preferences.

Customers can find everything from consumer electronics and clothing to digital downloads and professional services, with an extensive selection available at their fingertips.

Customer Reviews and Feedback:

Both e-commerce and social platforms integrate customer reviews and feedback, providing valuable insights and information to potential buyers.

Customers can read other shoppers’ reviews, ratings, and testimonials to make informed purchasing decisions, contributing to transparency and trust in the online shopping experience.

Why Are People Shifting To Social Commerce?

User-Generated Content:

The interactive nature of social commerce, where users can engage with content, share experiences, and interact with brands and other users, fosters a sense of community and trust, influencing purchasing decisions.

Seamless Shopping Experience:

Social commerce platforms offer a seamless shopping experience, allowing users to browse, discover, and purchase products without leaving the social media app.

This convenience appeals to consumers looking for hassle-free shopping experiences.

Personalized Recommendations:

Social commerce platforms use algorithms to analyze user data and behavior, providing personalized product recommendations tailored to individual preferences and interests.

This customized approach enhances the shopping experience and increases the likelihood of conversion.

Seamless Checkout Process:

Research from the Baymard Institute reveals that compulsory account setup is a leading cause of e-commerce cart abandonment by 24%.

Social commerce platforms shine by offering a smooth checkout process and cutting cart abandonment rates through features like eliminating mandatory account creation and surprise fees.

How Can TechAhead Help Your Business By Being A Part of Social Commerce?

Digital Product Engineering:

TechAhead specializes in digital product engineering tailored for social commerce platforms, ensuring seamless integration of features and functionalities to enhance user experience and drive sales.

Mobile App Consulting:

Our mobile app consulting services provide strategic guidance on social commerce app development, helping businesses identify key market opportunities, define feature requirements, and devise effective strategies for success in the social commerce landscape.

Mobile App Development :

TechAhead offers expert social commerce app development services for the iOS Apple app store and Android Google Play Store platforms, leveraging cutting-edge technologies and best practices to create engaging user interfaces and dynamic social apps that drive revenue and customer engagement.

Quality Assurance & Testing:

Ensuring the quality and reliability of social commerce apps is crucial for customer satisfaction and retention.

TechAhead offers comprehensive quality assurance and testing services to identify and address issues or bugs in your social app, ensuring a seamless user experience across all devices and platforms.

Application Maintenance:

Continuous maintenance and updates are essential for the optimal performance of social commerce mobile apps.

TechAhead provides ongoing application maintenance services, including bug fixes, feature enhancements, and platform updates, to keep your social e-commerce app running smoothly and meet your customers’ evolving needs.

Mobile App Analytics:

Understanding user behavior and app performance is critical for optimizing social commerce apps for success.

TechAhead offers mobile app analytics solutions to track key metrics, gather valuable insights, and make data-driven decisions to improve user engagement, conversion rates, and overall app performance in the dynamic social commerce landscape.

Wrapping Up

The distinctions between social commerce and traditional e-commerce reshape how we shop and interact online.

While traditional e-commerce focuses on transactions, social commerce leverages social and user-generated content to create immersive and engaging shopping experiences.

As social commerce continues to gain momentum through its entertaining shopping experiences provided to customers, businesses must adapt and embrace its unique features and strategies to stay competitive in the ever-evolving digital landscape.

Take the first step towards building your social commerce app and unlock the new possibilities with TechAhead.

Contact us now to embark on your social commerce mobile app development journey and stay ahead in the digital age!

FAQs

What are the benefits of social commerce for customers?

Social commerce offers customers convenience and accessibility, allowing them to discover and purchase products directly within their favorite social media platforms.

It also provides opportunities for social interactions, product recommendations, and user-generated content, enhancing the shopping experience.

How can businesses leverage user-generated content in social commerce?

Businesses can leverage user-generated content by encouraging customers to share their experiences, reviews, and photos of products on social media.

This content serves as authentic endorsements and testimonials, positively influencing potential customers’ purchasing decisions ultimately generating revenue for the businesses.

How can businesses measure the success of their social commerce efforts?

Businesses can measure the success of their social commerce efforts by tracking key performance metrics such as engagement rates, conversion rates, average order value, and return on investment.

Analyzing these metrics provides valuable insights into the effectiveness of social commerce strategies and allows businesses to make data-driven decisions for optimization and improvement.