Mart Lieverse Jun 23, 2020 9:32:19 AM 5 min read

Social media as new sales channel

Introduction

Marketplaces revolutionized the retail landscape. Brands can sell directly to consumers via marketplaces. This allows a higher margin and more sales data to be obtained. The business model of traditional wholesale is increasingly being replaced by a marketplace model. For brands, their DTC (direct to consumer) sales are becoming more and more important and marketplaces are becoming part of the sales strategy. When the consumer searches for specific products on fast-growing marketplaces, such as Bol.com or Amazon, they will be found easily. However, if there is no specific search, the search results don't provide much inspiration. There is a good chance that a consumer will buy a product on Bol.com or Amazon that they have seen on social media. Here social media companies see an opportunity.

The entire consumer journey on one platform

In addition to marketplaces, social media also set up their platforms to facilitate sales. This provides a new opportunity for a sales channel, where consumers can be reached and served directly. As a brand or retailer, you can create a completely new shopping experience on social media. The consumer journey, from inspiration to purchase, can now all be in one place. This reduces the number of touch points and the chance of losing consumers. The collaboration between the marketing and sales department is becoming increasingly important. Below we take a closer look at the developments and possibilities of selling on Instagram.

Connection with the consumer

Interaction with the consumer, becoming part of the online community and creating loyalty are easily achievable on social media. There are two reasons for this: the functionalities of the platforms and the large amount of time that consumers spend on the platforms. For instance, on Instagram you can respond to live events or current affairs. You can also provide entertainment, information, service and inspiration to connect with the consumer. In addition, you can keep consumers updated on new product launches.

Selling on Instagram

Instagram is already widely used by consumers to get inspiration for purchase and companies spend a lot of money on marketing campaigns on the platform. Consumers and businesses have always used Instagram to offer products, but the transaction took place outside the platform. To facilitate this, Instagram Shopping was launched in 2018, which offers the possibility to tag a product and link it to a webshop. This summer (first in the US and later this year in Europe) Instagram will introduce a new functionality in which you can create your own 'webshop'. Brands and shops can customize the look and feel of the Instagram shop with images, font, and colours that match their brand identity. The products can be displayed on the profile itself, in Instagram stories, or in advertisements. From there, the entire collection can be viewed and products can be stored or ordered. In the US, payment can already be made on the platform itself, in Europe this will soon be possible.

What’s next?

There are other interesting developments. For example, Instagram is working on a live shopping functionality where relevant products are featured in a video and can be bought while watching the video. In Asia, this business is huge and influencers create their own online store on social media. In the future, it will also be possible to place orders via WhatsApp, Facebook Messenger, or Instagram Direct.

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