The new consumer barometer by KPMG in Germany and IFH KÖLN examines the significance of social commerce. Social commerce refers to purchases through "social" online channels such as social media (e.g., via linked products as a post in the feed or story), virtual reality (e.g., through VR glasses), online/video games (e.g., within a game), or live video shopping. There is high potential among German consumers – particularly for impulse purchases. Trust-building, social interaction, and adequate product information offer advantages over traditional online shops.
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Whether through Instagram, TikTok, online games, or brand websites: many companies have long recognised the potential of social commerce for their purposes. In addition to visibility and branding, the focus is increasingly on purchase preparations and direct transactions, aiming for a seamless shopping experience. Social commerce holds great potential for both consumers and companies. This is evident in the Consumer Barometer by KPMG and IFH KÖLN, which, in its latest edition, has analysed the relevance and opportunities of social commerce. Conclusion: 87 percent of consumers generally show openness to the concept, and 75 percent have made purchases through social commerce.
'Social commerce, as a form of e-commerce, has arrived in the minds of consumers, especially since the COVID-19 pandemic, and it holds tremendous potential. Retailers and manufacturers should definitely explore this complex topic and examine the extent to which Social Commerce concepts can be beneficial as an additional sales channel for their business,' says Dr. Kai Hudetz, Managing Director of IFH KÖLN.
Positive effects through transparency and authenticity
When a social commerce strategy is appropriately tailored to the target audience and channel, it positively influences company perception, brand loyalty, and customer satisfaction. 82 percent of consumers believe that transparent communication via social commerce is essential for responsible corporate behaviour, and more than half (53%) perceive companies active in social commerce as particularly authentic. Products recommended through social commerce are less likely to be returned and are met with greater satisfaction (58%). Thus, through authentic brand and product presentations on social networks, online games, or their own websites, companies can bypass weaknesses of traditional e-commerce, especially lack of trust in providers (37%) or inadequate product information (30%).
'Whether spontaneous or planned, purchasing is always an expression of trust. Social commerce acts as a catalyst for trust and not only promotes the purchase of products but also brand loyalty. It will significantly boost e-commerce once again. Social commerce offers retailers and manufacturers the opportunity for more authenticity in individual customer communication and an enhancement of their brand in the eyes of consumers,' says Stephan Fetsch, EMA Head of Retail and Consumer Goods at KPMG AG.
Rotential not fully realised by companies yet
The significant market relevance of social commerce is also evident in the average spending: four out of ten buyers spent more than 50 euros on their last purchase. Accordingly, currently two-thirds of consumers see intentions for sales promotion and revenue increase as reasons for entrepreneurial social commerce activities. Companies should also seize the opportunities social commerce offers in terms of customer retention (38% consumer agreement). Further benefits of social commerce lie in the possibility of creating a seamless shopping experience (23%) and fostering more social interaction (18%).
More information:
IFH KÖLN
www.ifhkoeln.de