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The Future of Social Commerce

Social networks have become a vital component in the way people communicate. But how do social networks impact the way we as consumers currently shop and how will they impact the future of commerce? How will social networks, as well as brands, evolve to cater to people as they spend more time on social networks (especially on mobile devices)? Here are a few things to know in general and about each of the major social networks in relation to social commerce…


The Future of Social Commerce (in General)

Once viewed as “the sales guy at a cocktail party”, consumers are starting to warm-up to the concept of social commerce. According to recent research by Internet Retailer, social commerce (such as the Facebook Marketplace) increased approximately 25% from last year and continues to grow.

One of the major ways social commerce is looking to provide value to brands is to cut down on the interchange (or credit card swipe) fees by providing these services for free or at a discounted rate to acquire more data about their users. Depending on the social network, this may be accomplished through a partnership.

Another evolving tactic in social commerce is the presence of the “Buy” button on social networks that enables direct purchases on a network. This functionality, currently a staple on niche social networks such as Wanelo, not only simplifies and expedites the purchasing process for consumers but can also allow brands to receive real-time feedback on their existing marketing campaigns to see what is prompting people to purchase.

Finally from an international perspective, traditional social commerce trails only slightly behind North America in both Europe and Asia. China in particular will likely continue to emerge as a leader in the social commerce space – the continued concurrent development of both its social network and eCommerce presence will enable social commerce opportunities, especially on mobile devices.


The Major Social Networks and Social Commerce



  • Recently announced in December the future testing of buttons geared towards transactions including a “sell something” button
  • Launched “dynamic product ads” that allow merchants to load into Facebook their entire product catalog and automatically target consumers with ads featuring products they are likely to be interested in. Having an entire catalog on Facebook could possibly be used for direct purchase initiatives in the future
  • Currently testing a “Sell” feature when creating a post in certain types of groups. This will allow additional product information to accompany the post
  • Rumors of launching a new mobile payment platform
    • The company is apparently looking to launch a “Buy” button using payment processor startup Stripe but may also offer PayPal as an alternative
    • The amount Facebook may charge brands for each transaction remains unknown, but approximately $3-4 or a small percentage of the purchase (1%) has been speculated



  • A “Buy” button was announced in early 2015 that would enable users to make transactions without leaving the platform
    • The company would take an undetermined percentage cut of the referral revenue
    • The rollout for the “Buy” button will likely start out as a limited test with nothing expected to reach a public audience until later in 2015
  • Recently introduced an “Install” button to let its users download apps directly from a pin or profile page related to a brand. This is likely a way for the company to highlight their “in-pin” functionality for other applications such as commerce
  • Brands are excited about the purchasing power of Pinterest as its users often visit the site to find new products and its social referral traffic generally has a higher average order value than other social networks



  • The Twitter “Buy” button remains in testing and still hasn’t been debuted as a commercial product offering
    • Some brands have tested this “Buy” button to sell limited edition products and gift cards to Twitter users
  • The microblogging service has been seen by many brands and investors as driving primarily smaller purchases and may not factor into social commerce for major brands (flash sale type offerings may be an exception)
  • Expected to charge only a flat fee (approximately $1) for each transaction that occurs directly on their network


In conclusion, the prospects for social commerce are looking more promising than several years ago and may actually become a reality on larger social networks in the next couple years. While niche social networks continue to see success selling online through their site, the major social networks (many of whom recently went public) are monitoring the consumer appetite for social commerce. These networks are also likely gauging the optimal time to capitalize on this opportunity to maximize the revenue increase, especially as membership begins to plateau for some networks. Social commerce may not be as successful as a dedicated eCommerce site in our lifetime, but it’s an innovative way of selling online that brands will likely continue to keep an eye on in the coming years as they look to expand their business through emerging opportunities.


Sources: eMarketer, InsideFacebook, Twitter, Re/code