Over the past two decades, the retail industry has experienced unprecedented disruption as consumers have increasingly embraced new and emerging digital engagement channels. While physical stores have long been the primary channel for retailers to engage with their customers, the rapid emergence of digital channels—such as e-commerce, mobile and social—has begun to disrupt that model, and today’s retailers must adapt to meet the new realities of consumer engagement.
While the shifts to e-commerce and m-commerce have been well documented, it is the shift to social commerce that represents the next great opportunity for today’s retailers. The explosion of social media technologies—such as social platforms (Facebook, Twitter, Google), sharing sites (Pinterest, Instagram, YouTube), localization sites (Foursquare, Shopkick, Nextdoor) and messaging platforms (WhatsApp, Snapchat, WeChat)—have created a vast ecosystem of digital networks that customers spend more and more time in to live, love, share and, as of recently, shop.
The shift toward social media usage has been dramatic and significant. Social media adoption has become pervasive among internet users, especially young consumers. According to Smart Insights, more than two-thirds (67%) of all online users are active on social media, with nearly all (90%) of Millennials checking in on social media regularly.1 And active users are spending a lot of time on social channels, with usage now accounting for more than 28% of all media time spent online, according to GO-Globe, a web development company.2 Those between the ages of 15 and 29 spend several hours (two to three) per day on social media—surpassing the amount of time spent on traditional media like television or even email.
This social channel shift represents one of the greatest opportunities—and challenges—the retail industry has ever faced. The great promise includes the ability to connect to customers on a more personal level and in more meaningful and immediate ways than ever before. New and emerging social media capabilities promise to open new markets and create new business models, and they offer new channels of commerce. This explosion of new social touchpoints and capabilities, however, also presents an unprecedented challenge for retailers to guide, manage and influence the customer experience in an environment that at times seems largely out of their direct control.