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Why the UK is turning its back on in-app shopping features

iStock 1281297097 - Global Banking | Finance

172 - Global Banking | FinanceInterview with Justin Khaksar, Klaviyo’s Managing Director and Vice President, EMEA and APAC

Q: Why are social platforms struggling to convert traffic to in-app shopping features into sales?
A: We’ve seen a number of new features and announcements of pilots from social media platforms that enable various kinds of shopping activity for users. While it’s safe to say that these companies are going full steam ahead, we’re finding that consumers are not quite ready to entirely swap the mall or their favourite online shopping site for social shopping yet. 

One reason why platforms might struggle is that this form of e-commerce is relatively new and not frictionless. Social commerce is still in its early stages, and it will take time for consumers to adapt, gain trust and get used to the idea of using the in-app features. 

Similarly, it will take time for developers to create a seamless experience for customers and find the right approach to transform traffic into actual purchases. 

Q: Why is the UK audience in particular not receptive to social commerce? 

A: Consumer behaviour is influenced by many factors – and following the radical shift from in person to online shopping behaviours, it makes sense to predict that this will continue to spread to social media apps. 

But so far, for the most part awareness and adoption is low. For example, whilst TikTok’s live shopping is very successful in Asia, the platform struggles to gain traction with it in the UK and US. So much so, that the company actually stopped the plans to expand these features further in the west. Our stats showed that only 17% of UK consumers engaged with in-app shopping features in the UK – people are just not there yet. 

Fundamentally, it all comes down to the purpose of these platforms in the first place and how consumers are using them. Our research shows that over half of UK consumers use them to keep up with friends and almost a third read news and look for inspirational content – not shop. 

Q: Is the in-app shopping feature concept doomed? 

One of the most popular in-app shopping experiments is live shopping. This feature has been a huge success in China, so it’s no surprise that social media platforms are betting on the same for the UK and US too.

For anyone who watched QVC on TV,  live shopping on social platforms can be seen as a familiar concept. The concept isn’t doomed, but it all comes down to understanding that people don’t want to spend their time on these platforms for the shopping purpose. They will most likely find content and products that they like, but won’t immediately click to buy. 

TikTok and Facebook both faced setbacks with their efforts to roll out the live shopping feature for the western markets, and both of these platforms have reportedly shut down experiments with the feature.  

Q:How can in-app-shopping features be better optimised to convert social media users into a more reliable source of sales?

We believe that there is a shift happening. Consumers are no longer just interested in transactions, they’re interested in relationships, and businesses have the ability to forge those relationships. Just because customers might not be ready to buy now, doesn’t mean there isn’t an opportunity to nurture a relationship and get that customer to buy in the future. Brands should be focused less on just acquiring new customers to buy or “quick wins”, and more on fostering long term relationships to build loyalty and trust. 

In addition, while social commerce has had a slow uptake in the UK, we likely will see this increase over the coming years – but it’s one of many channels. 

Q:How can SMEs best utilise their advertising spend based on the results of this research? 

Whilst it’s clear that for generations like Gen-Z and Alpha, providing a new engaging and progressive shopping experience is necessary, we still have a long way to go until social commerce reaches its peak. 

Our research showed that TikTok is struggling to gain a foothold in the UK as a destination for shoppers. Businesses looking to attract more UK consumers may be better off exploring payment models that provide greater flexibility, rather than throwing cash at the latest TikTok dance and hoping for the best. 

Brits are sticking to traditional methods of shopping online and shunning in-app shopping features, and so smart marketers are responding by not jumping on the latest social media bandwagons and instead carefully considering their options, getting to know what their customers really want and then taking a blended approach to getting in front of them.

Similarly as earlier this year with the Metaverse, smart business leaders will be biding their time, listening to their customers and not jumping in head first on social shopping trends or selling in the metaverse. 

Q:What evidence is there to support your assertion that a blended approach to channel marketing would yield better results? 

We’ve seen this happen over and over again with our customers. For instance, Mixtiles’ goal is to build relationships – so they’ve tapped into text messaging to get closer with their customers. They use SMS to complement their email marketing – which now collectively drives nearly 40% of all revenue for the company. Guy Pessah, their Lifestyle Marketing Manager, has said of their strategy “customer journey should be holistic and span different channels.” 

Q: How can you explain the steady rise in popularity of buy now pay later schemes? And how does this affect businesses? 

We’ve seen a rise in BNPL services as a result of the cost of living crisis. In economic uncertainty, consumers are looking for flexibility so it’s no surprise that spreading the financial burden over a number of months is becoming more attractive to over a third (34%) of UK shoppers. 

For businesses, understanding consumers and their habits that are shaped by macroeconomic circumstances is key. 

Global Banking & Finance Review


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