Social commerce is revolutionizing the way companies do business and engage with their customers. By harnessing the power of social media, businesses are able to sell their products directly to consumers. This is often at a discounted rate. Various social media companies, including TikTok and Instagram, are ramping up their social commerce efforts. They are aiming to make e-commerce a core part of their business model.
One key driver of social commerce’s success has been influencer marketing. Furthermore, influencer marketing has developed naturally within the social media landscape. Additionally, it functions as an alternate—and effective—format of marketing. Social media influencers with large bases of followers can leverage their status to earn commissions by endorsing products in their videos and posts. What’s more, because influencer marketing takes place within the social media apps, consumers are making purchases via that channel versus a traditional e-commerce site.
As influencer marketing continues to pick up steam, Amazon is trying to keep up. In 2017, the e-commerce giant launched its own influencer program, which gives influencers a commission for linking to products on the Amazon website. Recently, it launched an app called Inspire, which has a feed that mimics TikTok and Instagram, showcasing short videos and photos.
Amazon’s Inspire has one core challenge, though. Its purpose isn’t to necessarily provide entertainment, like TikTok or Instagram does. But rather, it’s fully centered around advertising. However, whether people will actually be interested in that is an open question.
“Amazon and social media platforms have been fighting over who controls social commerce for years, with Amazon previously launching and sunsetting a social media-like feature on its app called Spark,” said Daniel Keyes, Senior Research Analyst of Merchant Services at Mercator Advisory Group.
“Amazon has struggled to create an engaging social media offering that draws in consumers, while social media platforms have found it difficult to create an appealing shopping and checkout experience that enables them to convert transactions that they inspire,” he added. “Social commerce has tremendous potential, but both Amazon and social media platforms will likely have trouble taking a leading position in the industry since they specialize in commerce or social engagement, and not both.”
