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The Power of Social Commerce: Building brands in the TikTok era

 

5 Minute Read

 

 

What can you learn from this report?

  • Strategic insights: Learn innovative strategies for leveraging social commerce platforms to drive brand and sales growth.

  • Consumer behaviour analysis: Understand the evolving dynamics of consumer behaviour and how to engage effectively through community-driven content.

  • Practical recommendations: Get actionable advice on integrating digital and data capabilities, leveraging in-app features, and building long-term customer loyalty.

 

Click here to explore working with Retail Economics for creating thought leadership papers like this.

 

Why this report matters

Social commerce is projected to reach nearly £16 billion in the UK by 2028. This report provides essential strategies to harness this growth, ensuring your brand stays ahead in a competitive market. With a focus on authenticity, community engagement, and innovative marketing techniques, this guide is your roadmap to success in the social commerce landscape. Learn innovative strategies for leveraging social commerce platforms to drive brand and sales growth.

 

Explore the transformative potential of social commerce with our latest report, "The Power of Social Commerce: Building Brands in the TikTok Era," produced in partnership with TikTok.

This report dives deep into how social and entertainment platforms are reshaping the retail landscape, merging community, entertainment, and commerce into a seamless experience.

 

Social media commerce in retail

 

Contents:

  • Foreword

  • Key report highlights

  • Section 1: The Role Of Entertainment In A New Era Of Shopping

  • Section 2: The Social Ecosystem And Customer Journey

  • Section 3: Strategies For Success In Social Shopping

  • Case studies

  • Conclusion

 

 

Introduction

The retail landscape is evolving rapidly, driven by the rise of social commerce. Platforms like TikTok are at the forefront, offering unique ecosystems where consumers can discover, engage, and purchase products seamlessly. This report explores the dynamic intersection of community, entertainment, and commerce, providing brands with the tools needed to thrive in this new era.

 

Key sections

Digital Retail Renaissance: Explore how social commerce is revolutionising the retail industry, driven by technology, consumer behaviour, and entertainment.

The Social Ecosystem and Customer Journey: Understand how platforms like TikTok impact every stage of the customer journey, from discovery to loyalty.

Strategies for Success in Social Shopping: Gain practical insights into leveraging TikTok's features for brand and sales growth, including tech integration, in-app features, and community building.

 

 

Key report highlights

  • UK social commerce market represents a £16 billion opportunity for retail brands. 
  • 82% of social users engage in shopping-related activities when using a social and entertainment platforms (93% for TikTok users).
  • 88% of TikTok users have discovered brands they’re interested in purchasing on the platform – the highest of any social and entertainment platform.
  • 1 in 3 of consumers say social and entertainment platforms are their preferred channel for product discovery. Most consumers say they discover more new brands on social platforms than through traditional shopping channels.
  • 69% of UK consumers have purchased a product after seeing it featured on social media.
  • Beauty and apparel are the most popular categories for social commerce, with over one in three social shoppers having made a purchase in these areas
  • 56% of UK users have made a purchase directly through a social or entertainment platform. For digital natives (under 45s), this rises to 73%
  • 88% of Gen Z visit social and entertainment platforms after making a purchase with a retailer or brand (e.g. to share experience
    or leave review, watch how-to videos, contact brand).
  • 94% of Gen Z and 85% of Millennials follow at least one brand on social and entertainment platforms.
  • 2 in 3 of TikTok users feel more connected to brands they interact with on the platform, compared to less than half on other platforms.

 

The role of entertainment in a new era 

In this section, we explore the drivers, benefits and features within the social commerce landscape as the retail industry shifts towards a more socially integrated environment. We also look at how a blend of entertainment and commerce is reshaping consumer engagement, offering new growth opportunities for brands.

The social commerce market in the UK is poised to hit £7.4 billion in sales in 2024, continuing its remarkable growth trajectory. Over the next five years, the market is projected to expand at an annual compound growth rate (CAGR) of 21.2%, reaching an impressive £15.7 billion by 2028 (Fig 1).

 

Fig. 1 - UK social commerce market to reach £15.7 billion in sales by 2028

UK social commerce market to reach £15.7 billion in sales by 2028

Source: Retail Economics, TikTok

 

This rapid expansion will more than double the market’s current size, and significantly outpace the growth of the broader online retail  ector over the same period (5.3% CAGR). For perspective, the anticipated market size by 2028 is comparable to the GDP of Malta/ Jamaica or equivalent to the entire Furniture & Flooring market in the UK.

 

Fig. 2 - Drivers of Social Commerce Growth

Drivers of social commerce shopping growth

 

‘Social commerce’ vs. ‘Community commerce’ 

Social commerce’, or social shopping, merges social media with e-commerce, creating an  interactive and immersive shopping  xperience. It streamlines the consumer journey from discovery to transaction, featuring live-streaming, integrated product catalogues,  nd targeted content to deliver the right product to the right users at the crucial moment in their...

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Capturing attention in the TikTok era

In today’s hyper-competitive attention economy, the media landscape is increasingly  fragmented with brands battling for consumer  ttention. To cut through the noise, innovative approaches are often required to capture attention.

By using entertainment as a vehicle for  torytelling, a key psychological factor for retaining attention, brands can deliver experiences that truly captivate. Here, entertainment serves as a powerful differentiator. Content that entertains can take many forms—it may harness humour, evoke strong  motions, or provide educational value, all rooted in authentic storytelling. This diversity in content creates a rich value exchange, providing an avenue for brands to connect with audiences on a deep emotional level. TikTok, in particular, has leveraged this effectively.

Short-form video has become a crucial tool for capturing the right kind of attention. The best TikTok content puts consumers in a more  receptive state, creating an emotional trigger that encourages participation and engagement, whether by posting, interacting, or making  purchases.

The bite-sized format of TikTok videos makes them ideal for quick consumption, driving immediate and impactful behaviour  that presents opportunities for brands to reach new customers and achieve growth through unplanned purchases. Consumers now turn to platforms like TikTok for entertainment and discovery, creating an ideal environment for brands that appeal to their playful and  curious mindset.

Different social media and entertainment platforms exhibit different motivations for use and functionality. Unlike other  platforms where motivations lean more towards general communication, news or education (Fig 6), TikTokputs entertainment at its core.

 

Fig. 6 - Entertainment a key motivator for TikTok

Question: For the social and entertainment platforms you use, what are your primary motivations for each platform?

Entertainment a key motivator for TikTok Retail Economics

Source: Retail Economics, TikTok

 

The social ecosystem and customer journey

In this section, we take a closer look at how social commerce impacts each stage of the customer journey, accelerating the path to  urchase. We explore how platforms like TikTok have integrated awareness, browsing and purchasing into a cohesive shopping experience.

Social platforms the preferred channel for digital natives

Our research shows that digital natives (under 45s) prefer the social commerce experience every step of the way. For simplicity, Figure 10 shows a three-step customer journey to communicate the choice of channels used by this cohort at different points of their journey. 

 

Fig 10: Digital natives prefer social platforms at every customer journey stage 

Question: Thinking about the different stages of the  ustomer journey outlined below, which of the following channels 
do you think is best for each stage?

Digital natives prefer social platforms at every customer journey stage retail economics

Source: Retail Economics, TikTok

 

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Entertainment as the gateway to discovery

Discovery is the first step in the social commerce journey. Our research shows that social and entertainment platforms are the most popular method for consumers to discover brands and products, outperforming search engines, marketplaces, and brand websites (Fig 11). This trend spans all age groups, with the exception of Boomers (over 65), who still prefer traditional channels (Fig 12). For brands,  maintaining a strong social media presence is essential.

Platforms like TikTok have revolutionised brand discovery, offering exciting ways to find new products while passively scrolling or actively searching. Sophisticated algorithms which capture user behaviour (e.g. likes, shares, dwell times etc.) curate personalised content making discovery hyper relevant and fun. Here, consumers are most likely to discover new brands and products by ‘accidental’ scrolling Platforms like TikTok have revolutionised brand discovery, offering exciting ways to find new products.

TikTok’s For You page curates highly personalised content that is unique to each individual user, which translates to brand and product discovery. Sophisticated algorithms capture user behaviour (e.g., likes, shares, dwell times), to craft a hyper relevant and enjoyable discovery experience.

Trust in the ForYou page empowers users to confidently explore new brands and products that align with their interests. This behavioural shift sees users not only discovering ‘accidentally’ while scrolling, but increasingly, searching on social and entertainment platforms with specific intent (Fig 13).

 

Fig.13 - Discovering new brands and products by accidental scrolling is most effective on socialDiscovering new brands and products by accidental scrolling is most effective on social

Source: Retail Economics, TikTok

 

Discovery: TikTok features and examples

1. Personalised shopping: TikTok’s “ForYou” page personalises content with unmatched precision, functioning like a personal shopper by suggesting brands and products tailored to individual tastes. This hyper-personalisation extends beyond social interactions, driving commerce across various platforms—whether it’s driving traffic to a brand’s website through Video Shopping Ads (VSA), promoting purchases directly on TikTok Shop, or increasing footfall in physical stores. Unlike other platforms where personalisation often relies on broad demographic data or browsing histories, TikTok curates content based on deep engagement metrics, capturing both attention and trust effectively.

2. The power of short-form video: Short form video is uniquely placed to drive high-quality attention because it is immediate, immersive and multi-sensory. Being sound-on, full-screen, entertaining and skippable, TikTok’s content creates an immersive experience that keeps audiences engaged.

3. Trending on your terms: Brands can tap into emerging content patterns that reflect current consumer behaviours and interests. These trends act as broad ‘signals’ or ‘forces’ that reveal underlying movements in consumer engagement and preference. Understanding why certain trends gain traction allows brands to strategically participate in these larger content waves, enabling serendipitous product discovery beyond traditional search.

 

TikTok social media Retail Economics

 

TikTok excels at relevant discovery, with the highest proportion of users discovering brands or products they’re interested in. It ranks top for product discovery in seven out of ten retail categories, including fashion, beauty, food, and health and wellness.

Over half (51%) of product discovery occasions on TikTok lead to further user engagement, compared to an industry average of 40%. This includes liking, sharing, following, and seeking more information. Younger users tend to stay on social platforms post-discovery, while those over 45 are more likely to visit brand websites or physical stores (Fig 16).

TikTok successfully drives engagement across both online and offline channels. Numerous brands have benefited from “As Seen on TikTok”, using the trending tag on promotional displays in-store, creating unique opportunities for cross-channel marketing.

Consumers can discover brands on TikTok and then explore products in-store or on websites, or they can continue the purchasing journey on the platform through TikTok Shop. Whether part of a closed-loop system or not, this ensures brands can meet consumer needs no matter where they are or how they prefer to shop.

 

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Social platforms as search engines

In this section, we examine the consumer’s quest for information. We contrast traditional search engine use with the integrated, immersive, and interactive search experiences within social platforms. Social takes search to the next level.

Social takes search to the next level

Today, social and entertainment platforms go far beyond social interaction. They’ve emerged as powerful tools for product research. Our study shows that 70% of social platform users (and an impressive 91% of Gen Z) intentionally use them to gather information about products and brands. However, when searching for product inspiration, many consumers now prefer social and entertainment platforms (31%) over traditional search engines (28%) (Fig 17).

 

Fig. 17 - Social the new search engine

Social the new search engine - Retail Economics

Source: Retail Economics, TikTok

 

Different users exhibit distinct search behaviours on these platforms. Our personas, for example, show Entertainment Enthusiasts typically discover products serendipitously through content that resonates or goes viral, with algorithms tailoring feeds to their tastes. The Researchers methodically assess user reviews, how-to videos, and expert opinions for informed decision-making. Meanwhile, Style Seeker are more tactical in their search behaviours, using integrated shopping features and targeted searches for specific products and shopping missions. Platforms like TikTok offer dynamic search capabilities to cater to... [extract].

 

Category dynamics

Beauty and apparel are the most popular categories for social commerce, with over one in three social shoppers having made a purchase in these areas. Shoppers who have purchased in the last 12 months show even higher engagement (Fig 24). These categories naturally lend themselves to social platforms through makeup tutorials and fashion showcases.

However, other retail categories such as household goods, and food and drink, are rapidly gaining traction. These sectors benefit from the authentic, real-life context they offer—home improvement projects shared through DIY tutorials and culinary explorations via food styling and recipe shares. This trend is broadening the social commerce landscape, appealing to consumers’ desire for new experiences and practical inspiration.

 

Fig 24 -  Top social commerce categories

Question: Which categories have you purchased products directly through social media or similar platforms?

Top social commerce categories retail economics tiktok

Source: Retail Economics, TikTok

 

Seamless In-App Purchases: TikTok Shop seamlessly integrates the shopping journey, enabling users to discover, interact with, and buy products through various shoppable content forms—complete with in-app checkout capabilities. This all-in-one approach simplifies the user experience, enhancing convenience and boosting conversion rates by removing purchase barriers.

Secure Integrated Payments: The platform supports secure in-app payments, streamlining transactions and maintaining high security and user trust. This functionality ensures that users can complete purchases quickly and safely within TikTok, without the friction of third-party payment gateways.

Live Shopping: TikTok enhances the purchasing process with its live shopping feature, enabling real-time interaction between brands and consumers. This dynamic approach allows users to see products in action, engage directly with sellers via live Q&As, and make instant purchases during live broadcasts, adding excitement and immediacy to the shopping experience.

 

Social shopping TikTok Retail Economics

 

Other insights in the report

  • Direct brand interaction
  • Community building with social media shopping
  • Fostering brand advocates through social media
  • Shopping in a Closed Loop system
  • Case studies 

 

5 Key strategies for success in social shopping 

In this last section, we provide strategic recommendations for retailers and brands to harness the full potential of TikTok as a vehicle for  brand and sales growth. The following insights will enable brands to pivot from traditional methods to more innovative approaches that resonate with TikTok’s vibrant community.

 

1. Accelerate digital and data capabilities

Tech integration: Establish the right digital capabilities (e.g. tech integration with apps, livestreaming support etc.) to drive a seamless  and interactive social commerce experience.

Data management: Ensure product catalogues and inventory information are up-to-date and fully integrated. Implement data  management integration to track results and aggregate data across sales channels.

Consumer insights: Understand evolving consumer sentiments on TikTok to create tailored content that resonates with the audience and encourages brand interaction.

 

2. Leverage in-app features

TikTok Shop Ads: TikTok Shop offers brands a comprehensive suite of solutions to create a seamless shopping experience within the app. This closed-loop system allows users to discover, purchase, and engage with products without leaving TikTok, integrating features like in-app checkout to enhance the customer journey and drive sales.

Live shopping: Host interactive live streams to showcase products in real time, offering exclusive discounts to incentivise purchases during the event. Follow best practices to maximise engagement and conversion rates. 

Shoppable videos: Integrate product links directly into videos, allowing viewers to purchase items without leaving the app, providing a seamless purchasing experience.

‘Edutainment’: Combine education and entertainment to deliver compelling content that drives brand engagement and product knowledge. 

Trend anticipation and engagement: Stay ahead of the curve by anticipating and engaging with emerging trends on TikTok to maintain relevance and consumer interest.

 

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Social shopping retail economics

About this report

This report by Retail Economics and TikTok looks at how UK brands are leveraging social media and TikTok's platform to increase brand awareness and connect with customers using the power of entertainment and storytelling.

This thought leadership research is essential for retail industry professionals looking to improve social media strategies for sales and marketing objectives amidst an Attention Economy where we have a fragmented digital landscape. 

Complete the form at the top of this page now to secure your free copy. 

 

 

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