Social commerce is taking the world by storm. 

Online shoppers across all age groups are actively using social media platforms to explore new products and brands, and engage with businesses they are interested in - some even leading to purchases. 

While this new way of shopping removes friction from the buyer’s journey and engages the consumer from start to end, it also presents new opportunities for the brands to interact with their consumer in ways never thought or heard of before. 

A McKinsey report mentions a two-hour live shopping event on TikTok brings in more than a week’s worth of sales at a flagship store, while a shoppable Instagram live gets 40,000 comments. Social commerce is a rapidly emerging shopping trend projected to bring in 79.6% of retail ecommerce sales by 2025 in the US alone. 

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What's driving this massive sales growth to that close to USD 80 billion, and what technology is propelling the growth? 

Artificial Intelligence (AI) has been a major game-changer, especially after ChatGPT became the buzzword recently. 

As AI is gaining popularity among marketers, there has been a paradigm shift for brands. Social is becoming an integral part of brands to connect with their audience as it helps to create hyper-targeted customer segments and engage with super-relevant content. 

In this article, we will explore the future of social commerce using AI and its impact on brand growth. But before that let’s take a quick look at AI and its role in eCommerce.

Role of AI in the eCommerce Industry

As PwC mentions, eCommerce companies that apply AI in the three key facets of their business - business transformation, decision-making, and systems modernization are likely to grow successfully using technology. While every business can leverage the successful implementation of AI, the impact on the eCommerce business is far-fetched. 

Why is AI benefitting eCommerce?

Three factors that are contributing to the success of implementing AI in eCommerce are:

• Availability of large volume of data
• Competitive advantage with AI adoption
• Availability of high-performance computing power

Overall, AI in eCommerce is a growing market with many integrated AI tools. AI-enabled eCommerce solutions are predicted to reach USD 16.8 billion with a whopping CAGR of 15.7% by 2030. 

While AI is all set to dominate the eCommerce business, it significantly impacts social commerce. 

What is social commerce?

Putting it simply, social commerce lets you sell your product directly through social media. From product discovery to purchasing the product, everything happens on social media. Some social media platforms with social commerce features are Facebook, Instagram, TikTok, and Pinterest. The biggest benefit of social commerce is it removes friction from the buyer's journey and makes social buying a pleasurable experience for the buyer. 

How is AI changing social commerce? 

AI is influencing social commerce in many ways. From AI-supported voice search to personalized recommendations to using AI for content creation, AI is playing a crucial role in reshaping social commerce. 

1. AI and chatbots

Chatbots are AI-powered virtual assistants that interact with customers in real-time, answering their queries, providing personalized product recommendations, processing orders, and even updating them about their product delivery status. By implementing Chatbots, businesses can:

• free up their resources from such repeated tasks
• be available to their customers 24 x 7
• improve customer satisfaction
• build trust by engaging and communicating with consumers regularly

On the other hand, customers are assured their transactions are legit and begin to trust the brand. AI-powered chatbots can also be integrated with Facebook Messenger and Whatsapp, further expanding their customer base.

2. AI and content creation

As Drop's CEO Benjamin Benchou mentions in the Market Scale podcast, Open AI - ChatGPT plays an important role in creating relevant content for their customers on social media platforms to better engage with customers. Coupled with past purchase history, the present nature of interaction with the brand, and user behavior, they are now able to trigger more hyper-focused messages on social commerce platforms to interact with consumers. 

AI also comes in handy for brands that constantly look for ideas to create new content assets to keep their social media followers hooked. Providing detailed and relevant prompts to the AI can help you create unlimited hyper-targeted content assets that resonate with the customers. 

3. AI-powered visual search

We are familiar with keyword search, where we provide a keyword to the search engine and ask it to find us the relevant information. Basically, what Google does for us. But AI goes a step further. Customers can take a picture or simply upload the picture. AI will look for relevant product information based on the image. 

4. AI-driven personalization

Social commerce is popular among customers. They enjoy the personalization that social commerce brings in. To offer customers this personalized experience, brands leverage AI to analyze data, like past purchase history, browsing behavior, and past interactions with the brands, to provide personalized product recommendations. 

For example, Amazon's "customer who viewed this also viewed this" feature is a great example that recommends products to a customer based on their previous interactions with the brand and transaction history. 

5. AI and cybersecurity

AI models can help you in the safety and security of your social commerce business. For example, AI can help you detect inappropriate content or fraudulent transactions. AI can also help you detect threats like stealing credentials, creating fake profiles, and protecting customers' data. 

6. AI for streamlining business process

One of the biggest advantages of AI is streamlining business processes. So you can leverage the technology to automate your sales process, like sending reminders on cart abandonment.

7. AI and advertising

AI is revolutionizing the way advertising is done. While traditional advertising had a one-size fits all approach that didn't hit a cord with all, AI has a different approach. It analyzes user data and recommends content, ad format, and targeting strategies for different users. This ensures better click-through and conversion rates, resulting in maximum sales and profit. 

Microsoft CBO Philipp Schindler stated in a report that AI is already using "smart bidding, which uses AI to predict future ad conversions and their value, this will help businesses to stay responsive to rapid shifts in demand."

On the other hand, Mark Zuckerberg of Facebook mentioned that the "monetization efficiency of the company has doubled in the past six months as AI continues to make inroads in the company's key advertising business. Advertisers saw 20% more conversions than in the year before."

8. AI and Edge storefronts

If you have ever shopped on Edge, you must have faced a problem when you clicked through to the brand site. And if you're nodding, be assured you're not alone. Our research says 86% of online shoppers have experienced this problem. 

This leads to a high bounce rate of 72% and a 50% lower conversion rate. It's high time for brands to do something about it. This is where Edge storefronts come into play. Edge storefronts offer a shopping experience that blends content from the Edge with a smooth checkout experience. So how does an Edge storefront work?

Edge storefronts offer branded site experience on social channels. They are tailored to the specification of the channel and are continuously optimized. The updates happen in real-time with constant promotions with new posts. Optimization happens with the help of AI, which helps to minimize the bounce rate and maximize conversions. 

The benefits:

• Driving new revenue streams from Edge
• Minimizing customer acquisition cost
• Highly engaging experience for Edge customers
• AI-powered customized web pages that make landing more contextual to serve consumer interest and intent 

Conclusion 

At SimplicityDX, we aim to help eCommerce brands unlock a new world of opportunity with Edge storefronts powered by AI to create custom and seamless journeys for social media shoppers. 

We want to bring AI to the future of social commerce. 

If you care for a frictionless shopping experience for your Edge users, let's collaborate! 

We help you blend the content from the Edge with back-end eCommerce services to give you what your customers want - an engaging shopping experience that is powered by artificial intelligence. 

Download the Social Commerce Returns Playbook for insights on the social commerce returns experience, including consumer behavior, return rates, and strategies for improvement.

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To learn more, book a demo here.