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November 18, 2020

How s-commerce can help retail as work from home grows

By GlobalData Technology

With lockdown measures in flux across the globe, brands and retailers can turn to social media commerce (s-commerce) to help expand their reach and mitigate losses amid the Christmas period. S-commerce is uniquely positioned to transform ‘likes’ on social networks such as Facebook and Instagram into sales, while enabling brand-consumer engagement that has an ‘authentic’ feel.

As consumers rally to support small, vulnerable businesses to reduce their possibility of closure amid the pandemic, s-commerce may emerge as a key avenue for savior and success this Christmas among these players.

Access online helps s-commerce

Just over half (54%) of global consumers claim that it is their top priority, or more important now, to support small or local businesses according to GlobalData’s latest Recovery Tracker Survey. Despite scattered lockdown measures, most consumers have consistent access to the online shopping channel, which is a key distribution channel (and oftentimes the only distribution channel) for many small businesses.

Businesses which operate as online pureplays are increasingly possible due to S-commerce platforms such as Instagram Shopping, which enables users to make in-app purchases without being redirected to a brands website. S-commerce thus offers a convenient, seamless shopping experience which brands can leverage to entice consumers at Christmas time.

This opportunity is amplified when considering that consumers are in fact spending more time on social media amid the pandemic. Younger generations are most likely to engage with this channel with almost a third of millennials and generation Z (30% and 31%, respectively) spending more time browsing social media amid current circumstances.

However, their older peers are not to be forgotten as over a quarter (27%) of generation X, for example, also claim to be spending more time on social media amid the pandemic. S-commerce thus offers a potential avenue for small, independent brands to expand their reach and boost sales among digital natives as well as new audiences who have started to browse social media as a direct result of lockdown measures.

Impulse spending will increase during the Christmas period

Players operating in the beauty and grooming industry are likely to receive the most support through the s-commerce shopping channel amid the Christmas period as platforms such as Instagram are key sources of inspiration for beauty and grooming purchases. However, potential exists for players operating in the food and beverage categories to capitalize, for example, through offering novel and personalized products or product bundles to differentiate from competitors amid the festive season.

Ultimately, s-commerce presents an opportunity for brands to capture impulse spending from shoppers who adopt a “see now, buy now” mentality, as well as capture the increased awareness regarding the need to support small, independent players. Affordability will remain a key consideration before purchase going forward, hence it is not only important to leverage the s-commerce channel, but to ensure that products offer value for money to consumers who are more price-conscious than usual this year.

Verdict deals analysis methodology

This analysis considers only announced and completed artificial intelligence deals from the GlobalData financial deals database and excludes all terminated and rumoured deals. Country and industry are defined according to the headquarters and dominant industry of the target firm. The term ‘acquisition’ refers to both completed deals and those in the bidding stage.

GlobalData tracks real-time data concerning all merger and acquisition, private equity/venture capital and asset transaction activity around the world from thousands of company websites and other reliable sources.

More in-depth reports and analysis on all reported deals are available for subscribers to GlobalData’s deals database.

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