Why financial services brands should care about social commerce

By Melissa Murray Bailey, CRO, Hootsuite

The pandemic has led to a significant increase in online commerce, across all demographics and industries, meaning financial services brands globally have been placed in a new strategic position to make the most of this opportunity by ensuring that their digital commerce experiences are unique and of value, memorable and engaging.

That’s where social commerce comes in [already an $89.4 billion market and projected to grow to $604.5 billion by 2027], this new social evolution of digital commerce is one trend that financial organisations simply can’t afford to miss out on—and one that won’t be going anywhere, anytime soon.

Why social commerce?

Social commerce provides a wealth of opportunities for financial organisations looking to improve their customer experience, engagement, and consequently, brand awareness and sales on social media.

It’s more interactive than traditional e-commerce, as consumers can easily consult with their friends on the very same platform that they discover a product or service. Financial organisations can also collect feedback from and directly chat with customers through social media messaging, further facilitating an interactive, and tailored experience.

Recent research shows that social media has transferred the power to shape a brand’s image from the advertiser to the customer. Luckily, this works both ways. Potential customers will be more likely to trust and purchase from an organisation for which they can see genuine, positive customer experiences.

Financial organisations can also achieve a customer-centric social commerce strategy by leveraging conversational AI. This ensures customer enquiries are dealt with much more efficiently than with a purely manual response.

Financial brands can also now benefit from tools that provide oversight and management across all their customer care channels–from social media to SMS, and branded apps – ensuring all-round customer care.

Most importantly, social commerce streamlines online commerce with an easy to navigate ‘see it, click it, buy it’ process. Overall, social media is optimised to ensure maximum user engagement and screen-time, and provides organisations with consumers that are already engaged and, oftentimes, prepared to make a purchase.

Target your audience

Social media is an especially effective marketplace for financial brands whose prime audience is a younger demographic – such as Millennials and Gen Z’s. These generations are true social media natives – in the UK, the majority of users on Facebook, LinkedIn, Twitter and Instagram are aged 25-34, and 18–24-year-olds are the largest group on TikTok.

In fact, Hootsuite’s 2021 Digital Trends report found that 16–24-year-olds are the first generation to prefer social networks to search engines when researching brands. And 28% of UK users overall use social media to research brands.

Newer, digital-focused start-up banks like Revolut, Starling, and Monzo, have had great success in the UK, particularly with younger customers. For example, Monzo’s app was immediately popular with millennials because it focused on features that were most relevant to them – such as peer-to-peer payments complete with emojis. Today, 72% of all Monzo customers are under 34 years-old, and the company continues to thrive, achieving record revenues even despite the pandemic.

Monzo and Starling together took around 30,000 UK customers from traditional banks in the third quarter of 2019 alone, and in the same year Revolut had the most-downloaded online banking app, with an impressive 8.36 million downloads. A successful social commerce strategy therefore cannot ignore the opportunities presented by this digital-first, social media-savvy audience.

But fear not – whatever your target demographic, social commerce is a highly lucrative way to connect with customers. The pandemic, and consequent lockdowns, have seen both online shopping and internet usage increase across all age ranges. According to GlobalWebIndex, over 25% of Baby Boomers are spending more time on social platforms now as a result of the pandemic. Furthermore, Hootsuite’s Digital 2020 data found that 70% of Baby Boomers had bought something online in the past month, and 37% said they would continue to do so regularly post-pandemic – making this demographic no longer one to be ignored on social media.

How to use social commerce to future-proof your business

Social commerce is a big upcoming trend in the UK. In order to stand out from the crowd, financial organisations should turn to new, unique approaches that will not only promote greater brand memorability and engagement, but also ensure success by emphasising trust and confidence in this newest form of commerce.

One such approach is livestream events. These provide a much more informative and interactive experience than traditional e-commerce ever could, particularly with the sheer influence and popularity of social media. Some financial organisations are already seeing the benefits of this tactic. Experian, for example, hosts a Livestream every Wednesday on Twitter – #CreditChat – which helps the general public better understand their personal finances. According to Mike Delgado, director of social media at Experian, #CreditChat receives around 4,000 comments and questions every month, which provide the company with invaluable insight into what its audience needs most help with.

Another company quick to catch on to this trend was Avidia Bank. Its team ran several livestream videos alongside its social media strategy, which resulted in a 13% increase in mobile app enrolments and an 83% positive sentiment for Cardless Cash, as well as doubling its Twitter following. The figures speak for themselves – live stream content is one social commerce strategy that financial organisations can’t sleep on.

Once again, this trend proves particularly crucial for financial organisations that wish to target a younger demographic. Millennials are the biggest consumers of live video, with 63% having watched live content. And live streaming is most common on TikTok, of which 60% of users are Gen-Z. This form of social commerce also takes advantage of the increasing popularity of streaming services over TV – a trend which shows no signs of slowing down in 2021 and beyond.

In a similar vein, financial brands should consider the opportunity provided by the monetisation of short-form video content. On Taobao (China’s largest e-commerce platform) 42% of product pages already include short videos. This shows that, already, e-commerce must mimic the offerings of social media, and therefore social commerce, in order to stay ahead. Across the pond, Walmart has made multi-billion-dollar investments into TikTok, which has recently begun experimenting with in-app purchases according to the Hootsuite 2021 Social Media Trends report. Short-form video isn’t just popular on TikTok either, with Adam Mosseri, the Head of Instagram, recently announcing that the company is aiming to lean more into video, to compete with TikTok and YouTube, and emphasising that Instagram is no longer just a “square photo-sharing app”.

Understanding customer needs for better customer experiences

In order to ensure that these new approaches click with customers, financial brands must take the time to fully understand what their own customers want – simply following trends will not be enough. Fortunately, there’s no more effective and insightful way of doing this than through the abundance of information that is available through social media.

Through careful social listening, financial brands can track, analyse, and respond to conversations about them (and subsequently track competitor sentiment) on social media. Far from the days of traditional forms of audience trends analyses, social listening has become a crucial component of audience research. For example, a study by European Central Bank found that high Twitter bullishness predicts increases in stock returns.

By leaning into social listening to level-up social commerce efforts, financial services brands can use social media data to find out who their customers are, listen to their needs and requirements, and suggest products and services accordingly on the very platforms that their consumers use and love most.

By Melissa Murray Bailey, CRO, Hootsuite

The pandemic has led to a significant increase in online commerce, across all demographics and industries, meaning financial services brands globally have been placed in a new strategic position to make the most of this opportunity by ensuring that their digital commerce experiences are unique and of value, memorable and engaging.

That’s where social commerce comes in [already an $89.4 billion market and projected to grow to $604.5 billion by 2027], this new social evolution of digital commerce is one trend that financial organisations simply can’t afford to miss out on—and one that won’t be going anywhere, anytime soon.

Why social commerce?

Social commerce provides a wealth of opportunities for financial organisations looking to improve their customer experience, engagement, and consequently, brand awareness and sales on social media.

It’s more interactive than traditional e-commerce, as consumers can easily consult with their friends on the very same platform that they discover a product or service. Financial organisations can also collect feedback from and directly chat with customers through social media messaging, further facilitating an interactive, and tailored experience.

Recent research shows that social media has transferred the power to shape a brand’s image from the advertiser to the customer. Luckily, this works both ways. Potential customers will be more likely to trust and purchase from an organisation for which they can see genuine, positive customer experiences.

Financial organisations can also achieve a customer-centric social commerce strategy by leveraging conversational AI. This ensures customer enquiries are dealt with much more efficiently than with a purely manual response.

Financial brands can also now benefit from tools that provide oversight and management across all their customer care channels–from social media to SMS, and branded apps – ensuring all-round customer care.

Most importantly, social commerce streamlines online commerce with an easy to navigate ‘see it, click it, buy it’ process. Overall, social media is optimised to ensure maximum user engagement and screen-time, and provides organisations with consumers that are already engaged and, oftentimes, prepared to make a purchase.

Target your audience

Social media is an especially effective marketplace for financial brands whose prime audience is a younger demographic – such as Millennials and Gen Z’s. These generations are true social media natives – in the UK, the majority of users on Facebook, LinkedIn, Twitter and Instagram are aged 25-34, and 18–24-year-olds are the largest group on TikTok.

In fact, Hootsuite’s 2021 Digital Trends report found that 16–24-year-olds are the first generation to prefer social networks to search engines when researching brands. And 28% of UK users overall use social media to research brands.

Newer, digital-focused start-up banks like Revolut, Starling, and Monzo, have had great success in the UK, particularly with younger customers. For example, Monzo’s app was immediately popular with millennials because it focused on features that were most relevant to them – such as peer-to-peer payments complete with emojis. Today, 72% of all Monzo customers are under 34 years-old, and the company continues to thrive, achieving record revenues even despite the pandemic.

Monzo and Starling together took around 30,000 UK customers from traditional banks in the third quarter of 2019 alone, and in the same year Revolut had the most-downloaded online banking app, with an impressive 8.36 million downloads. A successful social commerce strategy therefore cannot ignore the opportunities presented by this digital-first, social media-savvy audience.

But fear not – whatever your target demographic, social commerce is a highly lucrative way to connect with customers. The pandemic, and consequent lockdowns, have seen both online shopping and internet usage increase across all age ranges. According to GlobalWebIndex, over 25% of Baby Boomers are spending more time on social platforms now as a result of the pandemic. Furthermore, Hootsuite’s Digital 2020 data found that 70% of Baby Boomers had bought something online in the past month, and 37% said they would continue to do so regularly post-pandemic – making this demographic no longer one to be ignored on social media.

How to use social commerce to future-proof your business

Social commerce is a big upcoming trend in the UK. In order to stand out from the crowd, financial organisations should turn to new, unique approaches that will not only promote greater brand memorability and engagement, but also ensure success by emphasising trust and confidence in this newest form of commerce.

One such approach is livestream events. These provide a much more informative and interactive experience than traditional e-commerce ever could, particularly with the sheer influence and popularity of social media. Some financial organisations are already seeing the benefits of this tactic. Experian, for example, hosts a Livestream every Wednesday on Twitter – #CreditChat – which helps the general public better understand their personal finances. According to Mike Delgado, director of social media at Experian, #CreditChat receives around 4,000 comments and questions every month, which provide the company with invaluable insight into what its audience needs most help with.

Another company quick to catch on to this trend was Avidia Bank. Its team ran several livestream videos alongside its social media strategy, which resulted in a 13% increase in mobile app enrolments and an 83% positive sentiment for Cardless Cash, as well as doubling its Twitter following. The figures speak for themselves – live stream content is one social commerce strategy that financial organisations can’t sleep on.

Once again, this trend proves particularly crucial for financial organisations that wish to target a younger demographic. Millennials are the biggest consumers of live video, with 63% having watched live content. And live streaming is most common on TikTok, of which 60% of users are Gen-Z. This form of social commerce also takes advantage of the increasing popularity of streaming services over TV – a trend which shows no signs of slowing down in 2021 and beyond.

In a similar vein, financial brands should consider the opportunity provided by the monetisation of short-form video content. On Taobao (China’s largest e-commerce platform) 42% of product pages already include short videos. This shows that, already, e-commerce must mimic the offerings of social media, and therefore social commerce, in order to stay ahead. Across the pond, Walmart has made multi-billion-dollar investments into TikTok, which has recently begun experimenting with in-app purchases according to the Hootsuite 2021 Social Media Trends report. Short-form video isn’t just popular on TikTok either, with Adam Mosseri, the Head of Instagram, recently announcing that the company is aiming to lean more into video, to compete with TikTok and YouTube, and emphasising that Instagram is no longer just a “square photo-sharing app”.

Understanding customer needs for better customer experiences

In order to ensure that these new approaches click with customers, financial brands must take the time to fully understand what their own customers want – simply following trends will not be enough. Fortunately, there’s no more effective and insightful way of doing this than through the abundance of information that is available through social media.

Through careful social listening, financial brands can track, analyse, and respond to conversations about them (and subsequently track competitor sentiment) on social media. Far from the days of traditional forms of audience trends analyses, social listening has become a crucial component of audience research. For example, a study by European Central Bank found that high Twitter bullishness predicts increases in stock returns.

By leaning into social listening to level-up social commerce efforts, financial services brands can use social media data to find out who their customers are, listen to their needs and requirements, and suggest products and services accordingly on the very platforms that their consumers use and love most.