Navigating the Evolution of Influencer-Led Social Commerce

Originally published to Ayzenberg.com on June 27th, 2024.

For years, the team at Ayzenberg has been fascinated by TikTok’s evolution, observing the gradual blurring of lines between entertainment and shopping. In our conversations, we likened TikTok–especially its live streams and their #TikTokMadeMeBuyIt phenomenon¹–to the modern-day equivalent of a late-night TV home shopping network. We anticipated the pivotal moment when TikTok would transition into an all-in-one platform for both discovery and direct purchase—and now, we find ourselves in the midst of that very moment.

As marketers, we’re now faced with the challenge of reevaluating what the purchase funnel looks like in this new era.² How did we arrive at this intersection of entertainment and commerce? What does e-commerce look like today, and how is it poised to evolve in the next five years? Perhaps the most pressing question for us is: How does this seismic shift impact our work?

In this blog post, we’ll delve into these questions, exploring the role of livestreams, sponsorships, and platforms like TikTok Shop in reshaping the landscape of modern shopping. We’ll discuss how the essence of contemporary shopping bears striking resemblances to traditional methods, how consumption drives education, and how social commerce is revolutionizing the shopping experience by bypassing middlemen and curating products directly for consumers. Additionally, we’ll explore the phenomenon of window shopping on social media as a form of entertainment in itself. Lastly, we’ll review some insight ION (Ayzenberg’s influencer agency) has into this ever-shifting marketing landscape. 

One key aspect we’ll drive towards is the utilization of influencer marketing to leverage social commerce with influencers (even if the brand isn’t directly selling on the app). How can collaborations between influencers and brands enhance the shopping experience for consumers, and what strategies can marketers employ to capitalize on this market space effectively?

Please note that Ayzenberg is continuously monitoring the US legislation affecting TikTok’s future as a US-accessible platform. While TikTok Shop is used as an example throughout this report, we are confident that this is still relevant to social commerce overall across all social media platforms.

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Let’s start with the basic strategy of TikTok (and most social media platforms): to keep users on the app as long as possible. TikTok quickly became an app where people came for various motivations: to be educated, to be entertained, to keep up with news, to be inspired, and to see more of the stuff they like (or like buying). TikTok has become a place where people scroll like we used to surf through channels – to be guided into what they will watch by their algorithm, not outright choosing it themselves. However, as we see with most things that are in high popularity, TikTok took the next step to commodification – outright selling products, exactly like we saw with Instagram Shopping a few years ago. If you weren’t around when Instagram Shopping came about, let me summarize it for you: users were annoyed. Half a year into TikTok Shop, and we’re beginning to see the same complaints. So much so that TikTok’s growth slowed down in 2023 compared to previous years, and people are theorizing new e-commerce as the source.³ Additionally, the perceived decline in TikTok’s quality has people wanting to step away from social media, and significantly limit their use by 2025.⁴ Now, that may sound concerning, and you may be thinking: is e-commerce bad? Is it hurting TikTok’s long-term performance? No, because as we learned with Instagram Shopping, consumer’s feelings and actions don’t always match up. Additionally, e-commerce has only recently reached a strong upswing in the US, but has long existed in Asian countries.⁵

Despite the public screaming their discontent with quality or seeing TikTok Shop commission ads everywhere on their feed, their purchases and how they’re using their money tell a different story. When TikTok rolled out its storefront features, between 2021 and 2022, there was a 76% increase in users purchasing items through the app, totaling $208 billion in spending.⁶  Reports indicate social commerce spending won’t be slowing down anytime soon, as it is set to reach $1.2 trillion by 2025 and $6.2 trillion by 2030 globally.⁷ When we take a deeper look at who those spenders are, it’s predicted that 62% of that spending will come from Gen Z and Millennials. When we take it a step further, 92% of consumers openly admitted in a study that they are willing to purchase directly from brands on social media platforms if they’re given good deals, user-friendly app experiences, and the option for real-time customer service despite citing a 40% lack of trust in the brand or platform.⁸ Users do have good reason to distrust social commerce shopping, as many TikTok users and small businesses firmly believe or suspect TikTok Shop’s coupons are algorithmically served, meaning discount prices can vary from 5-50% off depending on your FYP. ⁹  Additionally, users are becoming aware of the uses of AI for dynamic pricing and its ethical implications.¹⁰

Trust is also becoming an increasingly important resource for brands in the social commerce space as the open-access landscape has led to an increase in scams and suspect small businesses.¹¹ Because digital natives aged 18-to-34 are more comfortable buying online, they’re four times more likely to be scammed online than older generations.¹² One of consumers’ primary motivations for seeking out extra research through reviews online and opinions from their friends is in caution of these scams.¹³

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Now, what motivates users to overcome their perceptions and distrust to follow through with a purchase on a social media platform? When taking a look at e-commerce participation motivations, the top ones we see across all user demographics are:¹⁴

1. Convenience
2. Ease of use
3. Affordability

When we look deeper at these motivations and review the drivers they encounter on the app, these are pushing consumers to press ‘place order.’¹⁵

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With that in mind, we can now discuss the behaviors of consumers in e-commerce and their impact on how users want to be advertised to. Because e-commerce advertising is occurring in the same space where users get their entertainment, users have learned to shift their attention depending on what they’re being exposed to, much like when consumers used to surf through TV channels. When a user encounters sponsored content or the TikTok Shop button, it triggers a shopping mindset similar to browsing TV channels or watching QVC. This observation made by Ayzenberg over two years ago, is echoed by Charlotte Palermino, CEO of Dioux Skincare, who compares the TikTok Shop button to “knowing you’re on the QVC channel.”¹⁶ Once people recognize that they’re being advertised to on social media, they enter a product evaluation mode. As author Violet June points out, whether consumers have exposure to the QVC channel era or not, this behavior remains consistent because “shopping is entertainment. It’s the new equivalent of window shopping, is often passive or mindless, yet can draw people to make an impulsive purchase online.”¹⁷

However, social shopping behaviors and deciding factors go beyond the screen and impulse purchases. Online shoppers view purchases as an extension of themselves, their aesthetic, and even their ethics, as at least 46% of Gen Z care that the brand they’re buying from is being socially responsible.¹⁸ So naturally, when a user finds their ‘perfect product’ by seeing a targeted ad on social media, 49% of online shoppers then go on to get a friend’s input on this potential purchase.¹⁹ This is not only to get a second opinion from a trusted source, but to also share knowledge with each other about product experiences, potentially avoid scams, or avoid supporting problematic brands. Don’t think Millennials and Gen Z are the only audience to look out for in these behaviors either. Gen Alpha are a brand-aware generation with a rising spending power of $300 billion through parental influence estimated to be $5.46 trillion by 2029, and their influence is motivating brands to emphasize their values to young customers more than ever before.²⁰

Gen Z, Gen Alpha, and other social commerce shopping behaviors touch the physical shopping space as well. Despite being viewed as a digital-first generation, Gen Z still finds value in physical shopping experiences. Not only have they driven the resurgence of shopping malls or “mallrats,” but they see shopping as a social, connective activity.²¹ After all, 47% of Gen Zers still prefer to shop in person rather than online. While social commerce can be the driver for awareness of a product, 30% of Gen Zers shop in person to receive the product immediately, and 28% want to see and touch the product before buying in person or online.²²  This means that even brands that don’t sell directly on a social media platform such as TikTok Shop or Instagram Shopping can still garner results from participating in social commerce, as it is a medium that drives users to participate in physical retailtainment. Oftentimes, social media is the primary place that users go to find inspiration for meaningful, interactive retail experiences, as 86% of consumers engage with ads across social media platforms.²³

Expanding on the social aspect of online commerce, social commerce taps into a “universal human need to connect with others under shared interests,” says Consumer Anthropologist Andrea Richardson.²⁴ While this connective nature drives consumers to participate in word-of-mouth recommendations and community product reviewing, this behavior can also clash with social media’s current modern algorithmic method. Users are more and more aware of how algorithms are formulated to be hyper-specific to them and impact taste “through exposure to the same types of content, so you feel inspired by something just because you’ve seen it many times and it grows on you.”²⁵ We’ve seen most social media platforms begin to prioritize snackable, bingeable short-form content and hyper-niche algorithms. Because of this, users are becoming frustrated with algorithms being too niche and placing too many degrees of separation between posts from people they follow.²⁶ This is why users are emphasizing peer-to-peer interactions and recommendations or even seeking out new social media platforms that emulate older, nostalgic social media aesthetics like Nospace.²⁷ By emphasizing community opinion and authentic content from everyday people, consumers are integrating very vintage marketing methods into a highly technological digital shopping space. 

When we review social shopping behaviors, they all have something in common: product research and evaluation. Social shoppers, especially Gen Z, are using social media platforms as search engines that allow them to see their potential future purchases in action, attach a name and face to a product review, and potentially be exposed to a product or brand name without seeing a single official ad.^{28 29} This stage of the social shopping research experience is where long-form content becomes vital. Michael Martin, YouTube Shopping’s general manager, says “long form [content], when you’re thinking about high consideration and high-price point products, is perfect for research and really getting deep into it.”³⁰ Though he also goes on to say that while livestreaming and long-form content is important, it’s not the catch-all solution to converting social shoppers. Brands need to be strategic. Short-form content influencers appeal to casual shoppers and catch initial interest in products faster and more effectively, whereas long-form content converts those shoppers who need all the details to follow through with a purchase.

Think of short-form content as the hook with a lure and long-form content as the line that reels the consumer in.

Additionally, brands should consider more than just content type when they’re creating a social media campaign strategy. Consumers also want to be approached differently by an ad depending on what social media platform they’re on. This is because consumers utilize platforms for different purposes and therefore, share a different side of their personality on each one. For instance, a user may present themselves more professionally on Twitter than they do on Instagram, and vice versa. Hypothetically, Facebook can be a space for family, whereas Snapchat is a space for friends and can be more intimate. These user behaviors have an impact on how brands in this space speak to them. Studies have found that intimate content worked better on intimate platforms like Instagram and Snapchat, whereas non-intimate content worked better on non-intimate platforms like Twitter and Pinterest. Subtle manipulations to wording made a stark difference in users’ reception to these ad variations per platform. What this uncovered is that often, brands solely focus on age to define usage behaviors, which can be problematic as this study didn’t see age make an impact on these varying platform personalities.³¹ The ultimate takeaway for brands in this study was “platform fluency” – knowing what to tweak depending on the ad space.³²

So we’ve reviewed the future of e-commerce, the motivations of social shoppers and their behaviors. What does all this mean for the future of advertising? How are these insights applicable? Let’s discuss that by looking backward!

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There are phases in the history of advertising where consumption drove education in various product industries – much like QVC. If someone wasn’t already aware of a product out there that could fulfill a needed gap in their life, QVC not only introduced the potential buyer to said product, but demonstrated its necessity to the viewer with celebrity, pioneers, and influencers like Suzanne Somers with her fitness empire, ThighMaster, using infomercials.³³ We see that same trend of consumption driving education happening again in 2024.³⁴

How can consumption drive education? Let’s use an example. The skincare industry is a perfectly current and relevant example of consumption driving education. Interest in skincare over the pandemic rose by 54%.³⁵ Skincare isn’t something we’re inherently taught growing up, and therefore brands saw an opportunity for education. Now, skincare brands advertise products by its ingredients and why that particular product has a place in a buyer’s skincare routine. Ingredients like hyaluronic acid, niacinamide, snail mucin, and more weren’t as broadly known as they are now, and these ingredients have been brought to the forefront by advertising through social media and influencers. That’s why skincare advertising is so ingredient-focused, pushing “dermatologist-approved,” “medical grade,” and other buzzy terms. Most importantly, these words present skincare brands as the experts and educators. 

Ayzenberg currently applies this search and education-driven framework to its ongoing campaigns, so let’s use one of our valued brand partners as an example. A TikTok user interested in gaming watches a video about Xbox PC GamePass, sparking their interest to possibly subscribe if they haven’t considered it already. Later on through the algorithm and many video game clips later, the user is exposed to a sponsored post of an influencer making a humorous video breaking the 4th wall, promoting the PC GamePass offerings. With the content strategically produced to balance education and entertainment, our content is teaching the user about what the subscription has to offer and driving the user to invest in subscribing sooner. Our marketing insights show that the more someone is exposed to something they’re interested in on social media, the more likely they are to idealize this potential future purchase.

@sklumper

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@calebcity

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♬ original sound – CalebCity

@bee_maty

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♬ Originalton – Bee_Maty

@riyuuka

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♬ som original – Riyuuka

Alex Hawkins, strategic foresight editor at agency The Future Laboratory, says “for brands, there’s an opportunity to become educators during the research-to-buy process, offering informative content about the product and engaging with reviews, unboxing videos, and online communities.”² Because of this focus on consumer-driven education and commerce living on social media, we’ll see influencer marketing and social media management become even more vital moving forward with the growth of social commerce. With all of this information in mind, these are our strategic recommendations when exploring influencer partnerships in the coming social media space.

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1. Take the opportunity to place a brand as the primary educator of their own products, with influencers and social media products being the tools to reach and educate the potential consumer. Some brands have even gone so far as presenting CEOs and teams to their social media channels, as this puts a face to the name of the company for consumers.
2. Influencers are a great tool for social commerce, but tread carefully on how the content of a brand is presented to users. Clear, but unique and real messaging formed with influencers will be very important here. Reading from a paper or blindly promoting a product without allowing the influencer to authentically evaluate the product will be seen as dishonest and will be promptly scrolled from.
3. Know when to activate short-form vs long-form video content. Short-forms are an introduction and a show-and-tell, long-form is where viewers go to get all the nitty-gritty details of their future purchase.
4. Word-of-mouth marketing is more valuable than ever, people nowadays rely more on the shareability of product information between consumers. Gaining one loyal consumer leads to many more consumer converters farther down the road. Influencers play a big role here.
5. It’s crucial to make the product purchase phase as easy and seamless as possible when advertising in a social commerce space. Make sure links and information driving purchase conversion are visible, easy to use, and highlighted in the content for the consumers that won’t read the comments or descriptions. It’s important to understand the unique capabilities of specific social platforms for this, as business verification becomes important to users trying to avoid scams.
6. Know which social commerce space your target audience seeks entertainment in and how they use the platform. For example, audiences aged 41-75 live on Facebook Marketplace and Pinterest, whereas younger audiences live on TikTok Shop and Instagram Shopping.¹⁶
7. The marketing funnel has changed, however product awareness remains essential for purchasing. Fortunately, the marketing funnel evolves along with the market. There’s an abundance of potential avenues to reach consumers with, so the buying process is accelerating with more options than ever to reach people. While marketing changes can be daunting, aligning with the right agency partner can provide clarity towards the right path and alleviate fears of the unknown.
8. Social commerce, while digital, is absolutely connected to the physical shopping experience. Product promotion in the social commerce space can drive potential consumers to engage in in-store product evaluation and purchase. This works to the  benefit of brands that don’t sell products directly on social media shops.

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Sources:

¹  TikTok Holiday 2023 Playbook, TikTok

²  Gen Z Broke the Marketing Funnel, Vogue Business

³  TikTok users frustrated by overload of shopping content, Canvas8

⁴  Perceived quality decline turns people off social media, Canvas8

⁵  Social Commerce At SXSW 2023: What Brands Can Learn From China, [a] list daily

⁶ TikTok storefront rollout streamlines online shopping, Canvas8

⁷  Social Commerce is Growing, Canvas8, Accenture

⁸  Social shopping optimism hindered by privacy concerns, Canvas8

⁹  TikTok Announces Black Friday Discounts. Here’s What It Means For E-Commerce Brands, Forbes

¹⁰  AI’s Role in Reshaping E-Commerce Ethics, Vincent Yates

¹¹ Trust Over Transaction: Rethinking The Consumer Purchase Cycle At SXSW 2024, [a] list daily

¹²  Who experiences scams? A story for all ages, Federal Trade Commission; 

¹³ Young adults are falling prey to social media scams, Canvas8

¹⁴ Reasons for Rise in E-Commerce, Global World Index

¹⁵  Online Purchase Drivers, Global World Index

¹⁶  CEO Charlotte Palermino, TikTok

¹⁷ How Americans Feel about Changes in Social Shopping, Canvas8

¹⁸  Brand Role in Consumer’s Life: Brand Actions, Global World Index

¹⁹  Social Shopping in 2022: Consumer Behaviors in the Shopping Cart, Sprout Social

²⁰  Gen Alpha are ready to spend – and they want to be treated like adults, BBC

²¹  Gen Zers drive the shopping mall rebirth in the US, Canvas8

²²  The Rise of the Gen Z Consumer, ICSC

²³  Westfield: interactive retail for experience hunters, Canvas8

²⁴  Why might social shopping thrive in the inflation era?, Canvas8

²⁵  How is TikTok expanding all our online experiences?, Canvas8

²⁶  How old web aesthetics are agitating current algorithms, Canvas8

²⁷  Gen Z recreates MySpace as ‘Nospace’ – there’s a 380K-person waitlist, NY Times

²⁸  Using TikTok as a Search Engine, Adobe Express

²⁹  For Gen Z, TikTok is the New Search Engine, New York Times

³⁰ Inside YouTube’s Social Shopping Efforts, Business Insider

³¹ An Appeal to Intimacy: Consumer Response to Platform-Appeal Fit on Social Media, Society for Consumer Psychology; 

³² Post or pin: the psychology of platform personalities, Canvas8 

³³ How Suzanne Somers Spun Sitcom Stardom into a Fitness Empire With ThighMaster Device, ‘Somersize’ Diet Plan, and RestoreLife Supplements, Women’s Wear Daily

³⁴  The History of Infomercials: A Timeline of Long-Form Advertising, Infomercial.com

³⁵ How the pandemic lockdown changed our daily facial skincare routines, National Library of Medicine