Social Commerce: Monetising Social Interactions in Age of Passion Economy | by D3x_Tech | Oct, 2023

Asmita Kaushik’s Studio feed is full of quirky fashion images, multimedia content and videos. Her uber chic choices drive conversations for the masses. Whether she’s sharing an indoor image or an outdoor video, her followers never fail to comment under her content. Influencers like her drive multi-million dollar worth of sales for social commerce platforms world-wide. This trend is set to sweep the world by growing to be as big as $1 trillion by 2025.

The recent Covid crisis has brought in a profound shift in our approach to tackling daily challenges. The times when working from home was a norm and people felt stuck, there were groups of people who took this as an opportunity to pursue hobbies and learn new skills. For the very first time people followed their passion without much hesitation. Today these people are bedrocks of the influencer economy. The career paths in a passion driven economy don’t rely on traditional degrees but on the quantum of influence one has on followers.

Interactive Commerce & Community

A major part of the last decade has seen extraordinary success on social media and e-commerce platforms. As companies continue to scale up rapidly, a disruption is about to bring in a radical change. Social commerce is expected to take a front seat over all forms of traditional e-commerce and is set to revolutionise consumption patterns through a real sense of community and connections. Driven primarily by the passion economy, this change will impact everyone — starting from customers to brands. This will also open up new opportunities for people to participate as influencers, creators and sellers. Backed by tech platforms, this would be a new normal for future generations — it will eventually change the way people work and get compensated .

Social commerce allows creators to monetise their communities. It gives them the confidence of sustaining a career choice as a social influencer — passions are far more valuable assets than previously perceived. On the other hand, consumers feel more engaged while interacting with influencers directly over traditional methods of attention-based merchandising. There is a heightened feeling of community connection and trust. It’s these interactive features that will define the next wave of e-commerce and create multiple monetization opportunities for both creators and social platforms.

Platforms, as Enablers of Passion Economy

Passion economy will be a significant disruptor across industries. This is where creators will be in the driving seat having a more direct opportunity to connect and share experiences with their followers. Consumers prefer video commerce over other channels for buying fashion and the influencers will be at the centre of this shift. It would be the creators curating shoppable content for the end customer; and enabling them to make informed purchase decisions. Brands and Social network led platforms will in-turn host influencers and introduce new paths to product discovery for end customers.

Social platforms with commerce integration will be enablers of this change. The platforms will humanize the shopping experience and would bring influencers closer to the end user. Existing giants like Instagram, Pinterest, TikTok etc already have a buy-checkout option in at least one of the world’s geographies. WeChat also supports shopping and links to the merchant stores. New passion economy start-ups will majorly be creator & community driven focusing on building engagement hooks with better product discovery and gamification. The goal of every platform will be to maximise shopping revenues while optimising the content watch time. The platform effectiveness would be judged on the basis of how much revenue each multimedia interaction brings in.

As the battle for supremacy in social commerce is poised to intensify in a few years, each platform will incentivise creators disproportionately. Lots of tech effort will go into creating such platforms, thus passion economy would also augment traditional tech economy. Building new age gamification experiences for end customers and creating near real time live streaming capabilities would be a few notable features that would be at the core of tech platforms.

Passion Economy, tipping the scales for social commerce

One can turn their passions into livelihoods by being part of the passion economy. Whether it’s selling niche fashion accessories, sharing make-up tutorials or being part of a live commerce video, the passion economy has the potential to create an audience at scale. The creators would have endless possibilities to engage with the masses and monetise their connections. Passion economy will reward niche products and services, driven primarily by personalized content, it would offer creators with the most unique and out-of-the-box content.

Social commerce would primarily be driven by ‘FOMO’ and impulse buying. A trusted connection would implore followers to ‘Quick Buy’ and provide them real time discounted prices. It’s implicit trust on the influencers that would make an end customer buy the product. There would be a plethora of personalised options for end customers as there would be many social sellers who will be a part of this market. Low entry barriers for influencers will make this space extremely competitive in the future. As the competition between sellers intensifies, the winner would be the one who is innovative and unpredictable for the masses.

The Real Stakeholders

The ecosystem undoubtedly benefits all the participants, viz. platform, creators, consumers and brands. The platform drives engagement through influencer led content which in turn propels customer conversations and purchases. Influencers get a follower base to create their brand and brands get access to a large influencer network. It’s a win-win situation for all.

As platforms provide a path to self-employment to millions of creators, the journey for them is not going to be easy. Recreating the fun and safe shopping experience in the physical world for the digital age comes with its own set of challenges. New styles of managers will emerge who will keep check on creators effectiveness, give them regular feedback and keep a keen eye on their content. Since the influencers could be part of multiple platforms and brands simultaneously, managers would have to keep a very high bar on content, the influencer’s content shouldn’t cannibalize and speak-ill of other brands/platforms. Platforms will also have to be extremely careful about the content copyright infringements and regulations around them. Modern technologies like Artificial Intelligence, Machine Learning and Deep Learning would play a crucial role in detecting content glitches in real time.

New age social commerce platforms will leverage influencer potentials to make the passion ecosystem self-sustainable. User generated content would be the real king and platforms will leverage creator capabilities to garner clicks and be relevant for future. This would be an actual shift to pure engagement led sales where platforms will merely be enablers. The content led personalised experience will be a real differentiator in times to come.

Thriving in the Passion Economy

As the influencer economy grows, it would become increasingly important for every stakeholder to measure success. While creators and brands can keep a check on their success by measuring follower and revenue growth, it might not be as straightforward for the platforms. The overarching goals for platforms would be to build deep relationships with end customers through influencer led personalised content and platforms would have to simultaneously balance engagement, revenue and community growth scores to measure success.

All small brands and businesses will soon embrace social media strategies to drive sales in the passion era. Brands will create multi-touch point campaigns to acquire more buyers using platform data. While people will remain at the centre of a passion driven economy, technology will be the true enabler that would bring influencers close to the customer bases. Platforms will continuously innovate to enrich stakeholder experiences and create easy to use tools for content creation. They will leave no stone unturned to let influencers and brands thrive. So, if you are looking to be a creator in the passion era, hop on to the platform of your choice, you only need two things to get on to the bandwagon — passion and a working internet connection !

References:

1. And we’re live ! How live commerce is transforming online shopping, https://www.accenture.com/us-en/insights/software-platforms/why-shopping-set social-revolution

2. The passionpreneur culture: new approach in business and economy, http://www.iraj.in/journal/journal_file/journal_pdf/14-369-150035890935-39.pdf

3. The Passion Economy and the Future of Work, https://future.a16z.com/passion economy/

4. 16 Key Metrics for the Passion Economy, https://future.a16z.com/passion-economy metrics/

5. The Passion Economy, Work Dissatisfaction and the Reimagining of Work, https://ea.consulting/the-passion-economy-work/

6. How To Thrive In The New ‘Passion Economy’, https://www.wbur.org/hereandnow/2020/01/08/new-passion-economy-adam-davidson

7. Will Passion Economy Surge in the Post-pandemic World?, https://www.mantralabsglobal.com/blog/passion-economy/