Why Social Media Platforms Are Adopting E-Commerce as a Saving Grace

Social media platforms

Now there is no covert that social media platforms earn the vast bulk of their revenue by offering targeted advertising. Nearly all of the $117.93 billion in revenue that Meta produced in 2021—$114.93 billion—came from advertisements. Although this model may have served the tech behemoths in the past, things are rapidly shifting.

App Tracking Transparency: 

A growing number of businesses are eager to position themselves as guardians of personal information as customer demand for privacy increases. Apple unveiled the new feature in2021 called App tracking Transparency (ATT), which allows users to prevent apps from spying on them as they switch between them. 96% of US customers loved the feature and chose to opt-out of tracking. 

The introduction of ATT not only assisted Apple in leveraging privacy as a strategic advantage (the company’s mobile app advertising more than tripled in the six months following the feature’s launch), but it also obliterated its rivals. Due to their inability to monitor users across apps, E-commerce social media businesses are no longer able to recognize cross-content navigation and create more accurate consumer profiles, which makes it difficult for them to target users with advertisements as effectively as they once could.

The Inevitable Is Happening: 

Advertisers are leaving as their advertising becomes less valuable. Apple’s privacy policies, according to Mark Zuckerberg, CEO of Meta, will cost the company $10 billion in lost sales by 2022.

Due to everything mentioned above, social media platforms are scrambling to find new revenue streams. The good news is that users are not leaving social media, even though marketers are. Online users devoted 90 minutes on average to social media in 2021. When we fast-forward to 2022, we find that we now spend 147 minutes every day on E-commerce social media.

Social Media Tool: 

Social media is a fantastic tool for sharing our life with others and staying in touch with friends, but customers can also use it to research brands and the goods and services they offer. On E-commerce social media, many consumers already interact with brands, and 90% of consumers claim they make purchases from brands they follow. As a result, they serve as the best platforms for brands to interact with both current and potential new customers.

Introducing Social Commerce

Social media platforms including Facebook, Instagram, Snapchat, and TikTok now support direct product sales from brands without ever having to leave the apps. Social media platforms can accomplish this in a variety of ways, including Shops on Instagram, which let users explore and shop products on brand profiles, and Snapchat Shoppable, which let users virtually “try on” products before clicking a “Shop now” button to buy them. Whatever the strategy, social commerce may be the social media platforms’ best chance going forward to boost their revenue.

Increasingly popular is social commerce. Accenture predicts that social commerce will increase from a projected $492 billion last year to $1.2 trillion by 2025, growing at a rate three times faster than traditional commerce. Just a few companies that already leverage social commerce to decrease friction and boost conversions are Charlotte Tilbury, Ray-Ban, and Zimba. Smaller D2C brands, though, can also profit from it.

Augmented Reality: 

Social commerce does more than just make it simpler for customers to purchase goods. By promoting discoverability and raising engagement, it can also improve the overall experience for the customer and increase brand profitability. This is especially true for social commerce applications that incorporate augmented reality (AR), which let customers digitally “try on” items before making a purchase. Customers now anticipate businesses to offer augmented reality (AR) capabilities. Already in 2019, 75% of consumers claimed to utilize augmented reality when buying. And more than two-thirds said they would make more frequent purchases if a company offered an augmented reality experience.

Certain social commerce augmented reality (AR) experiences, such as the Halloween-themed Instagram and Snapchat filters introduced by NYX Professional Makeup, can introduce users to new product lines in an entertaining and lasting way. Users can visit a haunted dollhouse and try on the various spooky makeup looks worn by the five dolls that live there using the AR filters in this scenario. When used in conjunction with a tool like Instagram Checkout or a “Shop now” button, this style of filter can encourage consumers to make impulsive purchases.

Other augmented reality (AR) experiences let customers easily “try on” things while viewing social media shops or feeds, allaying concerns about sizing and fit.

With the use of a “Shop now” button, customers were able to instantly purchase a pair of Gucci shoes in 2020 thanks to Gucci’s collaboration with Snapchat.

According to research, this type of AR use can reduce returns by 22% while increasing conversions by 33%.


TikTok, the relatively new social media platform (currently a leader in organic reach), has recently started working with Shopify. As a result of this connection, Shopify merchants can now automatically produce TikTok advertising to market their goods. Businesses may link up with TikTok and adopt E-Commerce adverts there, which may result in customers making direct purchases on the social media platform.

Like on any other E-commerce social media site, businesses may expand their reach by spending money to promote these advertisements on TikTok. This boosts discoverability by letting users find these ads in their feeds. Platforms benefit from this approach in the form of revenues from merchants’ media expenditures in addition to a portion of product sales.

Connecting merchants with influencers to promote their ads and goods so they may gain organic reach through their followers is the logical next step for this approach. Influencers might practically “wear” these things, such as makeup, a handbag, or even clothing, thanks to the power of augmented reality, which also has the advantage of saving firms money on delivery expenses. Additionally, this would advertise the augmented reality (AR) virtual try-on filters to users, who might then use them for their own images and videos and share them with their friends, greatly expanding the companies’ organic reach.

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