Payment Evolution: Enabling the next era of social commerce
Social commerce has created new ways for brands to connect with consumers and create new revenue streams. According to Accenture, In 2021, global social commerce sales totalled $492 billion and are expected to reach $1.2 trillion by 2025.
Retailers want to capitalise on this action and can see the lucrative benefits. Our recent research report, ‘A Nightmare on E-Street’ found that one in three retailers added social shopping channels to their marketing strategy over the past year. This trend is only getting stronger.
TikTok Shop alone, which launched in the UK in 2021, is driving a major shift in how we define retail. TikTok is now considered the ‘most shopped’ social channel in the UK, with the average consumer making ten purchases on the platform each year. While social commerce can be a highly profitable channel, to master it, retail businesses must deliver on execution to ensure a secure and seamless experience. One key ingredient to achieving this is frictionless payments.
In this article, I’ll explore how brands can drive e-commerce growth through a dynamic ecosystem where social interactions and financial transactions converge.
The intersection of social commerce and online payment methods
Let's think about the buying journey of a consumer on social media and the mindset they’re in at a time of purchase. They’re scrolling content, watching reels - all of which needs a short attention span. They expect a payment experience to mimic the immediacy of their overall social media experience. See it, click it, buy it. Social media stores eliminate obstacles along the consumer path, streamlining the transition from discovery to purchase. They’re there. The product’s there. Nowhere to go but the checkout.
As a brand, you’re failing at the final hurdle if a consumer abandons their basket due to friction in the payments process. This is not just an issue specifically for social commerce, it’s affecting all retail and ecommerce businesses. But in today's economy, if you've heavily invested in your marketing strategy to move customers down the funnel, at every touchpoint - and on every channel - losing conversions due to checkout friction is a serious problem.
It’s therefore a no-brainer that businesses need to be thinking strategically about their payments processes. The convergence of social commerce and frictionless online payments that integrate a vast amount of different payment methods is a direct solution to this issue. Seamless payment integration within social media platforms will allow businesses to create a direct sales channel, reduce cart abandonment rates, boost impulse purchases and conversion.
Tailoring your payments strategy to social commerce
Customising a payments strategy to suit different demographics is essential. Consumer behaviour and preferences vary significantly across age groups, income levels, regions across your channel mix. Our research found that Gen-Z are leading the charge on social commerce channels, with 43% of this group in the UK already purchasing via social media. However, Boomers aren’t far behind, with 29% also making purchases via social channels.
Brands need to be able to cater to a diverse demographic and provide them with the flexibility of different payment options. Younger consumers may favour digital wallets and one-click payments, while older generations may prefer traditional credit cards. By creating a personalised and localised payment strategy, businesses can cater to these different preferences, improve customer loyalty, and boost conversion rates.
This is why integrated payments and unified payments infrastructure are central to the future of social commerce. As the lines between social media and online shopping blur, seamless, flexible and secure payment options will be the catalyst for this social commerce evolution.