How Social Media is Transforming E-Commerce Businesses

When was the last time you purchased something online? From clothing to groceries, and electronic gadgets to books, there are many of us who regularly shop online for what we want, with just a few clicks on our favourite websites.

7 Feb 2020

5 mins read



E -commerce businesses are leveraging on social media to drive business decisions.

When was the last time you purchased something online? From clothing to groceries, and electronic gadgets to books, there are many of us who regularly shop online for what we want, with just a few clicks on our favourite websites. In fact, online sales is now overall the fourth largest sector in the US1 - a retail market that's often used as a benchmark for the developed world.

Part of the reason behind the rapid rise of e-commerce businesses, especially in recent years is the growing relevance of social media marketing. Remember when social media was used mainly to keep up-to-date with the lives of family and friends? Well, times have changed. Now, we are exposed to a constant stream of branded videos, product placements and shout-outs from the influencers we follow.

No surprise then, that almost 40 per cent of users follow their favourite brands on social media, with one in four users also following brands from which they might make a purchase.2 Additionally, 81% of all small and medium businesses use some kind of social platform.3

It's clear that social media is not only here to stay, but is set to evolve and dominate our feeds. So, let's examine a few reasons why the likes of Facebook, YouTube and Instagram are gaining increasingquite popularity as business tools!

Real-time Service
If you have ever experienced the frustration of calling hotlines while trying to resolve an issue, you are not alone. After all, spending time chilling with friends or starting that next Mobile Legends match is probably way more important than waiting for ages over the phone.

This is where social media and its real-time, always-on nature truly shines. Imagine businesses engaging with you directly at your own convenience - now wouldn't that be great? Plus, there isn't much that cannot be resolved without some friendly online service and a generous sprinkling of emojis!

But as they say, the proof is in the numbers: an estimated 67% of consumers now use social media platforms like Twitter and Facebook to seek a resolution of their issues.4

Valuable Data For Better Business
Decisions In terms of creating a great product, who actually has the final say over what customers prefer? That's right: customers themselves. Ultimately, it all boils down to what works for them, what attracts them, and what would make them part with their money. That's why it is not unusual to see customer complaints on companies' social media pages, whether it's about poor service or product quality.

On the bright side, customers may also share positive reviews or pleasant experiences on their personal social media profiles, even tagging the relevant businesses or people involved.

Importantly, digital analytics tools are also embedded within the most popular social media platforms. These allow you to view data such as where the majority of customers are based, their age and purchasing behaviour etc. among others. For e-commerce businesses, data truly is the new gold (or epic drop if that's your lingo).

Increased Brand Loyalty

In the highly competitive business world, customers often have many choices. This means that building brand loyalty is necessary for businesses to gain loyal social media followers. Think about it this way: you stick with your clique in school because they make you feel wanted or needed.

When you share interesting images, videos or links with your followers, their perception of your business is likely to improve. Better yet, loyal followers often spread word about your products or services, with no payment or persuasion needed. Know a friend who swears by a certain cosmetic brand and lets it be known to all through her social media account? That's an example of brand loyalty done right!

As you can see, social media has influenced the way e-commerce businesses operate in various ways. For those wishing to run their own online business or enter the highly rewarding field of social media marketing, you might want to consider equipping yourself with the relevant skills. Check out SIM's Graduate Diploma in E-Business and Social Media programme for a start! #simGE #learningneverstops

1 CNBC, 2 Apr 2019: Online shopping overtakes a major part of retail for the first time ever (https://www.cnbc.com/2019/04/02/online-shopping-officially-overtakes-brick-and-mortar-retail-for-the-first-time-ever.html)
2 Forbes, 26 Jun 2018: Social Media Is Increasing Brand Engagement And Sales (https://www.forbes.com/sites/tjmccue/2018/06/26/social-media-is-increasing-brand-engagement-and-sales/#57da821e7cb3)
3 Brandwatch, 30 Dec 2019: 126 Amazing Social Media Statistics and Facts (https://www.brandwatch.com/blog/amazing-social-media-statistics-and-facts/)
4 Social Media Today, 13 Jan 2017: Social Media Customer Service Statistics and Trends (https://www.socialmediatoday.com/social-business/social-media-customer-service-statistics-and-trends-infographic)

Posted online, 07 Feb 2020