- 48% of consumers in Germany consider shopping via social media to be a quick and easy way to keep up with current trends
- However, 78% are concerned about disclosing personal data digitally
Retail is facing a new phase of change: social commerce – the sale of goods and services via social media platforms – is increasingly becoming a key growth driver as consumers seek hybrid and personalised shopping experiences. Nevertheless, security concerns, order fulfilment challenges and product discrepancies are significant hurdles. In particular, the latent lack of robust data protection remains a critical issue for online and in-store shopping, underlining the need for a security-driven approach across the industry and all routes to market. The latest retail report ‘The Rise of Social Commerce: From Tech-Driven Browsing Experiences to Purposeful Purchase Decisions’ from SOTI shows how modern technologies and social platforms can be used to strengthen brand trust and drive customer engagement. The study highlights the need for a secure, omnichannel approach to retailing.
The growing importance of social commerce
Increased investment in mobile devices and applications has significantly changed the way consumers shop. It has enabled product personalisation that best meets consumers’ changing expectations and preferences. In the SOTI study, 62 per cent of German consumers surveyed (65 per cent worldwide) said that buying via smartphone was the most convenient way for them to shop online. Almost half (48 per cent, 49 per cent worldwide) also stated that social media offered them a quick and easy way to keep up with trends, making it an important channel for retail growth. Personalised content and promotions are obviously very popular with consumers and strengthen their loyalty to brands and products.
However, the study also shows that the rise of social commerce brings new challenges for retailers that they need to address. According to the study participants who made a purchase via social media in the last six months,
- 42 per cent (35 per cent worldwide) complain about late deliveries.
- 38 per cent (25 per cent worldwide) have received goods that differed significantly from the advertised products in terms of design or quality.
- 32 per cent (21 per cent worldwide) of consumers were never informed about the availability of products after they had expressed their interest.
However, delivery delays, product discrepancies and poor post-purchase communication are important factors that can negatively impact the consumer shopping experience and lead to a high level of dissatisfaction.
‘Consumers expect a personalised approach with individual offers at every stage of their shopping journey,’ emphasises Stefan Mennecke, VP of Sales, Middle East, Africa & Central, Southern and Eastern Europe at SOTI. ‘Our study shows that 57 percent of consumers in Germany prefer tailored shopping experiences and more than a third (39 percent) see artificial intelligence (AI) as the key to better recommendations. However, there is still a gap between personal expectations and reality.’
Retailers must therefore focus more on seamless mobile-first platforms, secure payment systems and greater reliability and transparency in order to meet consumer expectations and fully exploit the potential of social commerce.
Protect consumer data and build trust
When making purchasing decisions, consumers must be able to trust that retailers and the payment systems they use will protect their personal data. Yet 78 per cent of consumers in Germany (82 per cent globally) are concerned about entering personal data on the internet or on devices in store. Almost half (47 per cent) of respondents (61 per cent globally) are even concerned that smaller retailers may not be able to protect personal data and payment information at all.
‘Knowledge of data breaches and security vulnerabilities has shaken consumer confidence and increased fear of data theft and fraud,’ adds Mennecke. ‘As a result, more than three-quarters of consumers in Germany are hesitant to enter their personal data online or into in-store devices. This makes it increasingly difficult for retailers to implement personalisation properly. Retailers should therefore urgently implement robust data protection and security measures to fully protect the increasing number of customers from the in-store, online and social commerce sectors, thereby boosting trust and retaining this growing customer base for as long as possible.”
Conclusion
While the number of social commerce channels continues to grow, digital security is still a problem for retailers: a quarter (25 per cent) of consumers in Germany and worldwide are concerned about following purchase links on social media. Retailers should therefore use secure mobile technologies to manage and protect buyer data in order to make their custom journey more user-friendly and trustworthy, thereby improving customer experiences with retail brands.
The full SOTI study ‘The Rise of Social Commerce: From Technology-Driven Browsing Experiences to Targeted Purchasing Decisions’ can be downloaded at this link.