Transformative Impact of AI on Social Commerce

What is social commerce?
Social commerce is a swiftly expanding facet of online shopping. It harnesses the power of social networks and digital platforms to simplify interactions between businesses and customers. Social commerce leverages the increasing popularity of social media platforms to advertise and sell goods or services directly within the social platforms that people access regularly. The integration of social media by companies for marketing and sales purposes revolves around establishing direct connections between brands and their clientele. It enables meaningful dialogues across multiple social channels. Employing user-generated content (UGC) like photos, videos, and customer reviews, businesses can forge more profound connections with their customers compared to conventional e-commerce approaches. This, in turn, allows companies to establish emotional bonds with potential customers and boost sales conversions on social media platforms.
Social commerce has witnessed remarkable growth in recent years, thanks to the widespread adoption of smartphones and the surging popularity of social media platforms like Facebook, YouTube, TikTok, and Twitter. Global sales generated through social media channels reached $947 billion in 2022. Projections for the future of social commerce are equally promising, with expectations of it reaching nearly $2,118 billion by 2026.
Beyond offering enhanced customer engagement opportunities for businesses, social commerce delivers several advantages to shoppers. Increasingly, consumers turn to social networks to seek product recommendations from friends, family, and even strangers who have already purchased the items they’re considering. Moreover, the ability to interact through comments sections or question and answer (Q&A) platforms enables buyers to pose direct inquiries about a product before making a purchase. This instills greater confidence in their decision-making process and provides valuable market insights for brands.

Leading Social Commerce Platforms
Tapping social commerce to reach customers where they are and increase sales is a strategy that mirrors previously established tactics in the social marketing space. Using the power of social networks that have natively built-in social commerce tools enables brands to build better relationships with their target audience.
Before describing a few common types of social commerce, it’s worth exploring the platforms that support social commerce and can be used to apply social commerce tactics within social networks.
• Instagram – Shoppable Posts
In the contemporary shopping landscape, Instagram stands out as a leading social commerce platform, primarily owing to its innovative “Shoppable Posts” feature. Instagram has consistently maintained a competitive edge among its social media counterparts, positioning itself as an exciting hub for showcasing products, especially those with artistic and creative flair. To establish a shop on Instagram, users should link their Instagram business account to their Facebook business profile.
Instagram’s Shoppable Posts functionality empowers users to tag products within their organic content, including photos, reels, and Instagram stories. When users encounter these posts, they have the opportunity to explore items from your Instagram storefront by clicking on the “View Product” option or a product link sticker. This simple action allows them to access detailed product information, peruse other items in your shop, and make purchases.

• Pinterest – Shoppable Product Pins
Much like Instagram, Pinterest has carved its niche in the realm of social commerce through its innovative visual discovery engine. At its core lies the Lens feature, serving as a potent visual search engine seamlessly integrated with shoppable Product Pins. This dynamic functionality scrutinizes user-uploaded images, pinpointing potential interests and thereby enriching the shopping journey.
Pinterest’s foray into social commerce also encompasses alluring “Shop the Look” advertisements. These visual creatives serve as showcases for brands, presenting an array of products within a single ad. Pinners are enticed to delve into a treasure trove of related products directly linked to the pinned posts. With a simple click, prospective customers are effortlessly directed to the retailer’s platform for a streamlined checkout process. Remarkably, Pinterest empowers sellers to tag up to 25 items within a single photo, granting swift access to the products that ignite their imagination..

• Facebook Shop Feature
The Facebook Shops feature represents a transformative milestone in the progression of social commerce. It empowers brands to craft their personalized digital storefronts, extending warm invitations to consumers to seamlessly explore and make purchases within the immersive realms of Facebook and Instagram. Within these platform sections, dedicated spaces are thoughtfully curated, enhancing the overall shopping journey. Additionally, the Facebook help center remains readily available around the clock to assist with any inquiries or concerns related to this innovative feature..

• WhatsApp – End-to-End Shopping
The game-changing WhatsApp Business API demonstrates the platform’s potential as a dynamic social commerce tool. To draw in potential buyers, there is option to incorporate a clickable WhatsApp button or display WhatsApp business number on social media profile. This enables new users to discover presence of the business on social media and easily initiate contact. Additionally, including a QR code on the “Contact Us” page of website streamlines the process for social media traffic to reach out to you. An intriguing feature of social commerce is the Product Catalog, which empowers shoppers to explore product offerings and check for item availability. This functionality allows all shoppers to directly select the items they desire and complete in-app purchases..

• Snapchat – AR Lenses
Engaging with the Snapchat audience proves to be highly effective, and Snapchat marketing emerges as a top-tier approach to connect with them. While Snapchat’s primary focus may not revolve around social commerce, its Augmented Reality (AR) lenses open up exciting shopping possibilities for users. These lenses enable users to virtually experiment with makeup, face masks, and clothing, delivering a distinctive online shopping experience within the realm of social commerce.
The sheer scale of user engagement is impressive, with hundreds of millions of users immersing themselves in this AR shopping feature on a daily basis. Users can position themselves in front of the camera, select AR product lenses, and visualize how these items, including face filters, masks, clothing items, and makeup, complement their appearance. With just a click on the “Shop Now” button following their use of the AR lenses, purchases become conveniently accessible on Snapchat.

Impact of AI on Social Commerce
In the ever-evolving landscape of social commerce, the integration of AI has emerged as a transformative force. From redefining the way customers engage with brands to revolutionizing the efficiency of business operations, AI is reshaping social commerce. Let us explores the multifaceted influence of AI on social commerce, from personalized interactions to streamlined processes and precision marketing.
• Edge storefronts
Edge storefronts deliver a branded website experience within social channels. They are meticulously tailored to match the specifications of each social platform and undergo continuous optimization. These optimizations occur in real-time and are complemented by ongoing promotions through new posts. AI plays a pivotal role in mitigating bounce rates and enhancing conversion rates.
Imagine a user on a social media site, such as Instagram, clicks on a post from a fashion brand’s Edge storefront. AI algorithms analyze the user’s behavior, preferences, and interaction history. They then dynamically adapt the storefront content and layout to align with the user’s interests and the platform’s aesthetics.
For instance, if the user has previously shown a preference for casual wear, the AI-driven Edge storefront may emphasize casual fashion items in the user’s feed. Additionally, it can tailor the checkout process to be swift and user-friendly, all within the Instagram interface. This level of personalization and real-time optimization not only reduces bounce rates but also significantly boosts the likelihood of a successful conversion.
Edge storefronts leverage AI to fine-tune the shopping experience within social channels, creating a harmonious blend of content and commerce. This not only benefits brands by retaining potential customers but also enriches the overall shopping journey for users.

• Chatbots
AI-driven chatbots serve as virtual assistants, engaging with customers in real-time. They handle queries, offer tailored product suggestions, process orders, and provide delivery updates. The advantages for businesses include:

• Streamlining repetitive tasks
• Offering 24/7 availability
• Elevating customer satisfaction
• Fostering trust through consistent communication
  Integrating AI chatbots with platforms like Facebook Messenger and WhatsApp can boost outreach exponentially and bolsters customer trust.

• Content Creation
AI, like ChatGPT from OpenAI, plays a pivotal role in crafting tailored content for social media engagement. By analyzing past purchases, ongoing interactions, and user behavior, brands can deliver highly personalized messages on social commerce platforms. Moreover, AI assists in generating fresh content ideas, ensuring a continuous stream of engaging assets for social media followers. Providing specific prompts to AI enables the creation of limitless, precisely targeted content that resonates with customers.

• Visual Search
While keyword search has long been our go-to method for finding information online, AI takes this process to a remarkable new dimension. Imagine a scenario where traditional text-based queries are transformed into a visually intuitive experience. Instead of typing in words, customers have the power to capture a moment through a photograph or simply upload an image. AI analyzes the uploaded image with an almost mystical precision. It discerns the visual elements, deciphers the context, and taps into its vast reservoir of knowledge to identify and retrieve pertinent product information.
In essence, this AI-driven visual search transcends the constraints of language and keystrokes, allowing users to interact with technology on a more natural, almost telepathic level. This seamless fusion of visual input and intelligent processing holds the promise of revolutionizing how we explore and discover products in the digital realm.

• Personalization
Social commerce enjoys widespread popularity among customers due to its ability to deliver personalized experiences. To achieve this level of personalization, brands harness the capabilities of AI to scrutinize data, including customers’ historical purchase records, browsing patterns, and prior engagements with the brand. This data analysis empowers brands to offer tailored product recommendations.
For instance, on Facebook, AI algorithms analyze a user’s activity, such as the pages they follow, the content they engage with, and their interactions with ads. Based on this data, Facebook’s AI can provide personalized product recommendations directly within a user’s feed or through targeted ads. For instance, if a user frequently engages with posts related to fitness and health, Facebook’s AI may show them ads for fitness apparel or nutritional supplements, creating a personalized shopping experience within the social media platform..

• Streamlining Business Process
One of the most significant benefits of AI lies in optimizing business operations. You can harness this technology to streamline your sales procedures, such as utilizing AI to automate tasks like sending cart abandonment reminders.
For instance, consider a social commerce platform that integrates AI. Through machine learning algorithms, this platform can analyze user behavior, identify instances of cart abandonment, and then automatically generate personalized reminders. These reminders can be tailored to the user’s preferences, timing, and even include product recommendations based on their previous interactions. This not only saves time for businesses but also enhances the customer experience, potentially leading to increased sales conversions..

• Advertising
AI is fundamentally transforming the landscape of advertising. Unlike traditional advertising, which employed a one-size-fits-all approach that didn’t resonate with everyone, AI brings a distinct paradigm. It meticulously analyzes user data, offering tailored content, ad formats, and targeting strategies for individual users. This precision ensures significantly improved click-through and conversion rates, ultimately translating into maximized sales and profitability.
For instance, Microsoft’s Chief Business Officer, Philipp Schindler, highlighted in a report that AI is already implementing “smart bidding,” a technique utilizing AI to predict future ad conversions and their respective values. This proactive approach enables businesses to remain agile and responsive to rapid shifts in demand, enhancing their advertising effectiveness.
Conversely, Mark Zuckerberg, the CEO of Facebook, underscored the remarkable impact of AI on the company’s advertising endeavors. He mentioned that the “monetization efficiency” of the company has doubled within the past six months as AI continues to gain prominence in their core advertising operations. This transition has led to a 20% increase in conversions for advertisers compared to the previous year, exemplifying the tangible benefits of AI in driving advertising success.

Conclusion
The integration of AI has ushered in a new era for social commerce, unlocking unprecedented opportunities for brands and customers alike. From personalized shopping experiences through AI-driven edge storefronts to the seamless assistance of chatbots, AI enhances customer engagement and satisfaction. AI’s role in content creation and visual search broadens the horizons of social commerce, enabling brands to connect with users on a more intuitive level. The power of personalization, streamlined business processes, and AI-driven advertising strategies underscore the remarkable potential for growth and profitability in the world of social commerce. As AI continues to evolve and permeate the social commerce landscape, it promises to redefine the way we shop, interact, and connect in this dynamic digital marketplace.

About the writer: Dr. Usman Zia is an Assistant Professor at the School of Interdisciplinary Engineering and Sciences, National University of Sciences and Technology (NUST), Pakistan. His research interests are Natural Language Processing and Machine Learning. He has authored numerous publications on language generation and machine learning. As an AI enthusiast, he is actively involved in a number of projects related to generative AI and NLP.