There is no question social media is changing how, when, and why people shop. We discussed these changes in consumer behavior with Satish Kanwar, VP & GM of Channels at Shopify. Our goal was to figure out how independent retailers can best participate in social commerce and use digital to drive foot traffic.
IR: How has social commerce changed the product discovery process for consumers?
Satish: Discovering and purchasing products is no longer limited to only in-store or website visits anymore. Customers are now also discovering products on Instagram, purchasing them directly in-app, or even discovering a product in-person and then purchasing it online.
Discovery on social media for products, services, and experiences, has surpassed traditional search. On Shopify, since late 2015, social referrals have outpaced search, and email continues to be the highest traffic driver to the online store. Consumers want to discover products in the most convenient and personalized way possible. Rather than rummaging through a department store, either in person or online, the first leg of the shopper’s journey now often begins with social media as an engine for product discovery and research. Consumers are increasingly drawn to products that are being shared and validated on platforms such as Facebook and Instagram. These platforms help provide “word-of-mouth” justification for a purchase. To keep up with this new discovery process, retailers need to make every one of their social channels shoppable to create an efficient, seamless journey from discovery to transaction.
How can retailers use social strategies to bring shoppers in-store?
Commerce is inherently social. The internet isn’t getting rid of that, it has just brought part of the experience online. Physical retail is evolving to be less about holding inventory, and more about creating experiences that are compelling enough to bring people together. One strategy that independent retailers will find extremely helpful, is the hybrid model of buying online and picking up in-store. Overall, if retailers hope to earn customers’ time and attention, in-person experiences need to be more engaging than online shopping is convenient.
How has social commerce changed the role of physical retail?
Whether in-store or online, consumers want a convenient and time-saving, or memorable shopping experience where they can interact with retailers in a meaningful way. In a world where you go to a store to have an experience, the role of the physical storefront is no longer discovery and transaction — those activities are moving online. In this new era, the role of the physical store is now about branding, personalization and creating engaging experiences. In some cases, consumers may be pointed online to purchase a product they have experienced in the store.
Why are physical stores still an important piece of the puzzle for both retailers and consumers?
Physical retail is still one of the most important consumer touchpoints the retail industry has. Though the final transaction may take place online, consumers want to touch and feel products and interact with informed sales people in-store. Therefore, physical stores need to focus less on selling products and more on engaging the customer through product discovery and human interaction. To do so, independent retailers have to deeply understand their customers and refine and revisit their business plan to create experiences that speak directly to them.
How should independent retailers alter their sales strategies to address changing technologies and the needs of today’s consumers?
Retail is growing and shifting. Not long ago, the only way to grow a retail brand was to add more physical stores. Today, it is about expansion through digital real estate. An experiential, integrated approach to retail sales will help propel independent retailers to succeed. Another addition to this digital real estate revolution is social commerce. This is an area where we see the most potential and investment opportunities for retailers, brands, and businesses to see greater returns and growth.