The growing importance of social commerce: Key strategies to leverage

The rise and impact of social commerce: A new frontier for retail

Social commerce has the power to significantly impact the enterprise retail landscape. According to Deloitte, global social commerce sales are expected to reach approximately $2 trillion by 2025, accounting for 28% of all online retail sales.¹ Meanwhile US social commerce sales are projected to reach nearly $150 billion by 2028.²

Businesses are also experimenting with technologies like artificial intelligence (AI), augmented reality (AR), and virtual reality (VR) to boost social media platform engagement and pioneer this new frontier of retail. Brands can use AR, for example, to invite customers to virtually try on items before they buy. Or they can use AI-powered chatbots to provide real-time customer service and assistance at checkout.

Social commerce drivers: Emerging changes in consumption patterns

Evolving consumer behaviors and preferences are driving social commerce growth. As customers seek more convenient and frictionless shopping experiences, they’re turning to social commerce platforms to find new products and complete purchases in just a few taps.

Here’s a closer look at how consumer behaviors are influencing the future of the payments landscape:

• The shift to mobile. Consumers are increasingly using mobile devices to find and purchase products. In fact, mobile e-commerce sales reached $2.2 trillion in 2023 and now account for more than half of all e-commerce sales across the globe.³
• The growth of social engagement. User-generated content, influencer endorsements, and peer reviews on social media are increasingly impacting consumer purchase decisions, shaping the landscape of social commerce. As eMarketer reported of this social media influence, half of shoppers worldwide have used social channels to discover products and 59% have used them to make a purchase.⁴
• Increasing demand for personalized shopping experiences. Consumers increasingly expect personalized shopping experiences that match their preferences and interests. According to Forrester, 38% of consumers enjoy personalized experiences when they’re initially researching products and 43% do so when they’re buying products.⁵ Brands can meet these customers' expectations with social commerce experiences tailored to their behaviors.

The role of payments in social commerce

Payment processes are integral to the social shopping experience. After all, once you have customers in your social commerce store, you want to make checkout easy. Embedded finance, for example, enables in-app purchasing capabilities so customers can complete transactions without leaving the social media platform.

Going further, businesses should meet social shoppers with seamless payment methods like digital wallets and one-click payments. They can also harness recent payment technology trends like buy now, pay later options and digital currencies to help drive sales and fuel conversion optimization.

PayPal, for example, offers integrated payment solutions to help enterprises securely accept a range of payment methods no matter where customers decide to buy. In fact, PayPal can help to increase checkout conversions by 25% among customers who paid online for retail.⁶

Learn more about how to optimize e-commerce checkout experiences with PayPal.

Maintaining brand control in the social commerce experience

It's important to be mindful about delivering consistent customer experiences on social commerce platforms. Even if you're operating a wide range of digital storefronts, each one should tie back to your core brand identity, helping you build customer relationships and brand familiarity across touchpoints.

You can use these customer experience management strategies to help maintain brand control:

• Customize social commerce shops. Use the tools available through platforms like Facebook Shops and Instagram Shops to customize your digital storefront and match it to your e-commerce site. Incorporate consistent branding elements like colors, logos, and fonts.
• Build an influencer playbook. You might partner with influencers to reach niche, built-in communities of potential customers. As part of this, you can provide them with helpful guidelines on how to best speak about and visually represent your brand and products.
• Gather data from across platforms. Gain a comprehensive view of the customer journey by collecting data from each social commerce platform. This way, you can see how shoppers interact with your brand on each app and engage them with unified experiences.

Key strategies for optimizing social commerce

Enterprises can use key strategies to enhance their social shopping experiences and prepare for the future of e-commerce.

From AR and AI to chatbots and analytics, here are valuable tactics that businesses can use to make the most of their social commerce initiatives.

Integrate augmented reality for immersive experiences

Businesses can use AR to create more immersive shopping experiences, such as with virtual showrooms and dressing rooms. As Deloitte found, 60% of global customers are interested in AR-driven shopping experiences and 69% would appreciate a brand being present in the virtual world.¹

Utilize chatbots and messaging apps

Businesses can use chatbots for customer service in social commerce, providing real time, automated, and personalized assistance. For example, chatbots can help shoppers find the right products based on their interests and track orders after purchasing.

According to Accenture, 42% of consumers would be comfortable using conversational, AI-based tools for product recommendations.⁷ And Klarna found that 34% of consumers want access to virtual “personal shoppers” that recommend products according to their style and taste.⁸

Leverage video content for higher engagement

Enterprises can leverage video content engagement to boost brand awareness and drive customers to their social commerce shops. As Wyzowl reported, as of 2024, 91% of people have watched an explainer video to learn more about a product or service and 82% have been convinced to buy a product or service after watching a video.⁹

A tech retailer, for instance, might launch a TikTok livestream demonstrating how their product works, and then invite viewers to make a purchase directly from the TikTok app.

Harness advancements in social commerce analytics

Businesses can use social commerce analytics to better understand their audience’s behaviors and optimize experiences across platforms. For instance, brands can gather insights about which social apps their customers are most active on, which types of content drive the most engagement, and which payment methods shoppers prefer for checkout. They can then use these insights to improve social commerce experiences and increase conversions.

Personalize advertising and product recommendations

Personalized advertising strategies can have a major impact on social commerce engagement and revenue. As Twilio reported, over half of consumers (56%) say they’ll become repeat buyers after a personalized experience.¹⁰

That’s why it’s important for businesses to tailor their social content to customers’ preferences. For instance, you might target audiences with ads that match their interests or send a notification to shoppers reminding them to complete the checkout process. Some social platforms also have built-in personalization to help drive conversions. Pinterest, for example, notifies users when a product they’ve pinned reduces in price.

Embrace sustainability in social commerce

Today’s consumers want to buy from brands that practice sustainability and eco-friendliness. As McKinsey & Company found, consumers are shifting their spend towards products that claim to have an environmental and social impact.¹¹

Social commerce has the potential to help retailers improve their sustainable practices and decrease their carbon footprint. For instance, AR- and AI-assisted shopping experiences can help shoppers try products before they buy, which may contribute to higher post-purchase satisfaction and a reduced volumed of returned items.

Enhance social commerce insights with AI

AI can help enterprises access deeper insights and predictive analytics to help optimize their social commerce strategies. That's why PayPal uses AI algorithms to analyze shoppers’ payment histories and behaviors, so brands can customize experiences to streamline checkout. AI-powered payment systems, for instance, can preselect each customer’s preferred payment method, monitor transactions for risk of fraud, and securely store customer information for a frictionless purchase process.

Optimize shoppable content for social commerce

Along with building user-friendly social commerce stores, it’s important to publish shoppable content that grabs customer attention. This is an ongoing process, as you’ll continue to experiment with new content formats and optimize your strategies to improve results.

To start, you might consider using these tactics:

• Create posts with shopping tags. Tag the products featured in your Instagram and Facebook posts so users can click through to your social commerce store and make a purchase.
• Gather user-generated content. Outsource content creation from satisfied customers, asking them to share and tag their posts highlighting your products.
• Go live. Launch a livestream to showcase your products and interact with shoppers in real time. Brands in China, for example, have found success hosting live auctions on TikTok, allowing them to build loyal communities of returning viewers and customers.¹²

Unlocking social commerce potential

Social commerce is already transforming the modern retail landscape, changing the way customers buy and interact with brands. That means large enterprises have a massive opportunity to leverage social commerce strategies that drive sales and engagement.

From implementing AI-powered chatbots and AR technology to harnessing advanced analytics and sustainability practices, there are a range of tactics that businesses can use to deliver immersive shopping experiences at each touchpoint.

Learn how PayPal can help boost your growth and reduce costs with product innovations that build intelligence, personalization, and speed into every consumer touchpoint—from discovery to doorstep.