Social Media is the new e-commerce
By: Eleonore Serge
Tags: Social Media, Marketplaces, Product Management, E Commerce Business, Social Network

How social components integrated into the traditional online shopping process with a social e-commerce product could shape the way we consume by using persuasive patterns?

Rise of e-commerce integration into social media (Instagram Shop case study)

Following Facebook Shops’ launch, Instagram announced the launch of a worldwide test for Instagram shop. My attention is to decipher how this type of new tab could become major and reinforce a dynamic of influence on our buying behaviors.

This move seems to make sense when measuring the traction generated by Instagram for Shopify. Indeed, Shopify merchants and Direct to Consumer brands in general live and die by Instagram through direct posts, paid ads, and influencer marketing. Instagram is a perfect channel to grow their audience. Today, I can click on a Instagram ad or engage in the organic content from a brand or a feed and then I’ll link out to a shop where I’m going to purchase something- which represents a disjointed experience. All this engagement on Instagram leads to purchases on Shopify, which obviously means the Instagram user is navigating away from the app to engage and spend elsewhere. With the launch of Instagram Shop, the platform has the chance to close the DTC e-commerce loop and keep everything in-house.

Here is how Instagram presents is new Instagram Shop tab: soon, an Instagram Shop button will be added to the main navigation bar, replacing the Activity “heart” button:

Source: Instagram blog

This change in itself represents a significant pivot towards e-commerce. Plus, thanks to the rollout of Instagram Checkout, shoppers in the US can tap “Buy on Instagram” to make a purchase without even leaving Instagram, which of course is a major step in this pivot.

From what is presented by Instagram, I can see 2 major missing parts to Instagram Shop:

a 360° degrees standardized customer experience : handling shipping/receiving and return/complaints. If those parts of the customer experience can be made competitive on the platform, Amazon will have a serious competitor.

: handling shipping/receiving and return/complaints. If those parts of the customer experience can be made competitive on the platform, Amazon will have a serious competitor. a more effective and interactive way to discover products: the presented Instagram Shop copies e-commerce experience but not surpasses it with social media advantages. This is precisely what we are going to discuss about.

The new Instagram Shop tab features a “Collections” carousel, with lifestyle-orientated curations. Personalization appears through the brands carousel selection, where users can discover all of the shoppable brands they already follow on Instagram and also with the “Suggested For You” selection, with an automatically generated selection of products.

Source: Instagram blog

For now, it’s unknown exactly how the Instagram algorithm determines which products get surfaced here, but it’s likely a mix of your browsing history and the accounts you follow. The point of this article is to show examples of how showing more transparency in the way products are pushed to the user could actually supercharge sales.

How social media + e-commerce could become the perfect combo?

The features presented by Instagram represent a fraction of the potential of integrating e-commerce into the platform. Indeed, this new tab makes it possible to keep the entire user experience in one place. The experience is seamless and buyers will no longer have to leave Instagram to make purchases. But this model could have a major leverage point that is not reflected on the few screenshots provided by the Instagram blog: the mimetic desire.

Amazon’s screenshot

Indeed, Instagram shop has the potential to offer a much more social product discovery experience than what marketplaces like Amazon offer today. This social aspect of discovery can be found on some e-commerce marketplaces through the feature: “People who bought/liked this item (that you looked at/liked/bought yourself) also bought/liked…” which confers a sense of reassurance about our choices. We have something in common, we like the same item, we are likely to have common tastes, so I can trust this recommendation.

This is actually how collaborative filtering algorithms work:

Excerpt of my Netflix recommender system synthesized diagram: collaborative filtering part

A recommendation engine powered by such Deep Learning methods creates a smarter product discovery experience for the user. But those “similar to me” users are anonymous, I don’t really feel a sense of belonging with them. Reusing these methods and adding a visible social dimension with people I know would increase their power of influence tenfold.

It is not insignificant to observe a trend in e-commerce to integrate social bricks in their experience. To the integration of e-commerce into social media, e-commerce responds by integrating a social media dimension into e-commerce. This is for example the case of Shopify with the launch of Taler. The product is not a social media’s competitor per se, it is more a Canva’s competitor.

Taler is a social design sandbox that helps for launching your new business or Shopify store with hundreds of templates for Instagram Stories, Facebook Covers & YouTube banners. With Taler, the goal of Shopify is to broaden its scope of use for the client, taking into account the fact that the vast majority of Direct-to-Consumer brands will promote their products on social networks, in particular on Instragram. So Shopify model relies on discovery channels such as Instagram and Pinterest to drive users to its stores. This is why they have developed a product to effectively communicate on these channels. This proves the advantage that Instagram has over other marketplaces: product discovery is mostly done through the platform.

Screenshot of Taler’s landing page

Search vs Browse

E-commerce marketplaces still have to crack the search vs browse:

• Search: you know what you want and you can simply find it

• Browse : you can find whatever you want, before even knowing you want it

Pinduoduo

Pinduoduo, an $87B company based in China, has created a social e-commerce product based on browsing a feed of products and sharing with others to lock in savings. Pinduoduo’s twist lies in its integration of social components into the traditional online shopping process, which the company describes as the “team purchase” model.

By sharing Pinduoduo’s product information on social networks such as WeChat, users can invite their contacts to form a shopping team to get a lower price for their purchase. The mechanism keeps the users motivated and better hooked for a more interactive and dynamic shopping experience.

Browsing shopping leads to a whole new paradigm in which platforms need to be able to indicate what is the best product, while adding social proof to foster desire, beyond simple ratings and reviews of strangers. Social e-commerce has the ability to provide social proof from data of people:

I know and even admire

Who I want to trust

I want to imitate

How the integration of e-commerce into social media could leverage the theory of mimesis ?

Mimetic theory applied to social e-commerce product

To take up René Girard’s triangular desire theory, belonging to the mimetic theory, desire does not go from a subject to an object along a linear trajectory, but is mediated by a third person (a model). In social networks, those models are what we call influencers, or even Gurus.

Simple illustration of the Triangular Desire Theory

Any product has to be desirable in order to be sold. Selling on social networks involves paying special attention to the sources of desire, which are significant forces of traction. Desirability is an inherent concept in open social networks: you follow the people whose lives you desire, and you try to show yourself in your most desirable profile. It is the desire we generate that creates traction. On social networks such as Instagram or Facebook, the traction of desire generates mimetic forces. We want an item not because that item is particularly desirable, but because it is recommended by a desirable person, which makes it desirable.

Man is a mimetic animal, and Gen Z provides telling examples of this principle.

Tiktok example : mimetic forces in the creative process itself

Let’s take the example of TikTok where the majority of users belong to Gen Z. In the app, we find the three types of mimetic behaviors:

normative mimicry : conformism, a particular mimicry aiming at the of the group’s approval

: conformism, a particular mimicry aiming at the of the group’s approval informational mimicry : we do as others do, believing them to be better informed

: we do as others do, believing them to be better informed self-referential mimicry: we follow the majority

When creating content, the average user will foster mimicry as a source of inspiration.

The key creative component on the platform are “trends”. The principle of virality on Tiktok is to launch a trendy concept that will then be imitated by as many people as possible (self-referential mimicry). The concepts launched by power users act as a rule and source of inspiration and are massively copied, which lowers the barrier for content creation (normative mimicry).To learn new trendy concepts and create around them, the user browses her discovery feed, and follows the influencers that make and break trends (informational mimicry). It is then a matter of following intrinsic and non-formulated creation rules which are in fact a mimicry system. One expresses one’s individuality and creativity by making the rule one’s own.

It is very interesting to note that on this social media, mimicry is a key driver for content creation : based on a user study of TikTok and Kwai, by Tencent Market Insight, 77.8% of users indicated their motivation of video creation was wanting to try by themselves when seeing funny videos.

From creation mimicry to purchase mimicry

To go from the imitation of concepts, established as a rule in the creation process, to imitation in purchasing behavior, there is only one step.

We then understand the potential power of influence of TikTok, and the extreme efficiency that a shop marketplace directly implemented on the platform, like Facebook Shops or Instagram Shop, could have.

By the time I write, more and more potential buyers are positioning themselves for the acquisition of US TikTok, the lucky one will have in his hands an extraordinary potential social e-commerce product.

We can easily imagine inserting a shop icon on the main interface leading to an in-app shop store:

TikTok main interface (in French) with an added shop tab

The “TikTok Shop” would have the significant advantage of pushing relevant items recommendations since the store recommender system would benefit from the numerous data points retrieved by the app and from its high-performance algorithms. The first items shown would be the most liked by the people I follow (and would obviously take my preference criteria into account with equal weighting — criteria captured by the app’s algorithms while I’m browsing, like the hashtags I engage with the most).

To leverage the mimetic desire, allow me to introduce what I call the “mimeffect” feature. It’s about making visible the people I follow who liked (or bought, or recommended) the item I’m looking at to convey signals:

As you can tell, I’m not a Designer, but you get the idea

On the user profile pages, we can imagine adding the same shop tab leading to a screen listing all the items in the user’s wishlist, but also items that the user is selling on the platform. This tab would be the ideal place for influencers who would like to integrate the sale of their own merch directly on the platform or for DTC brands:

Having everything in one place could be very powerful for Tiktok. Trends could be more correlated to brands : to perfectly replicate X viral video, you have to wear Y particular hat of Z particular brand, which you can find and purchase directly on the platform.

Premium mediocrity: building social capital through signaling

What type of Persona will fall prey the most to mimetic desire? To answer this question, I refer to the term coined by Venkatesh Rao in The Premium Mediocre Life of Maya Millennial: the premium mediocrity.

According to Rao, premium mediocrity is a social class (“premium medium class”) composed of people who signal the appearance of striving upwards, while also being aware that it does not indicate actual upward mobility. This social class is a 2.0 version of the “middle class” affected by a tense and fragile social order, in which having a degree no longer guarantees having a good job, and having a good job no longer guarantees lifetime stability. Within this class, people are anxious about the now uncertain character of social mobility. To overcome this anxiety, these people adopt an attitude of “fake it til you make it”, or in the words of Venkatesh Rao:

“Premium mediocrity is dressing for the lifestyle you’re supposed to want, in order to hold on to the lifestyle you can actually afford — for now”

Premium mediocrity is particularly expressed on social networks, where we have an attitude of social demonstration, in which we imitate the behavior of the social category to which we aspire to belong. Mimicry take an important place in the signaling mechanism prevailing on social networks. To pretend, one must first learn, and to learn, one must imitate. And then, anxiety is ease with the Likes & Followers dopamine shots or increased by the lack of those elements.

The “mimeffect” feature as a potential Killer Feature for Instagram Shop

The “mimeffect” feature on Instagram Shop could be similar to the one sketched above about Tiktok. In the “Suggested For You” section, an item bought by a person I follow and who doesn’t follow me back, would be a data point with an important weight in the recommendation system. The same goes for a person with whom I generate a lot of engagement such as Likes, photo comments or DM, or a person with a large number of followers. And above all, the purchases of these people would be made visible on the interface. On each item presented in the “Suggested for you” category, the number of people I follow who have purchased that item would be displayed.

Instagram Shop would then have a hybrid recommender system. The products presented in the top of suggestion would be those that would match with my browsing activity and the brands I follow (content filtering), but also the products bought by people I follow who cumulate to them all the most important sum of followers, as well as the products bought by those with whom I interact the most (collaborative filtering).

Let’s simplify the idea with a basic example of a scoring system:

User-Item based filter : distribution of recommendation scores by criteria

The user would have a disable function on each of these purchases for the feature if he does not want his followers to know that he has purchased a particular item. His purchase will then be taken into account in the recommendation of this item to his most assiduous followers, but his profile would not be displayed

Impact on brands

This kind of weighting would lead to a new form of brand-influencer partnership to bring products higher up in the personalized suggestions and increase their visibility on the shop store. Influencers would therefore be encouraged to consume themselves directly on the platform, allowing Instragram to promote products on the shop marketplace while promoting the marketplace itself.

It is also important to note that for brands, the shift from a search-based world to a browse-based world represents a redistribution of traction power. The players who will be best able to capture the audience’s attention will win the game. A completely social product discovery experience redistributes the cards.

This mimeffect feature would have the potential to activate: