Role of social media

in e-commerce
Introduction

E-commerce is the process of buying and selling goods or service virtually using the

internet. For the last couple of years, global e-commerce industry has seen a boom in growth

especially after Covid-19 pandemic. Thanks to social media platforms which has influenced

greatly to the purchasing pattern of buyers and a shift towards online shopping. Here comes the

new term social commerce, a process by which products are promoted and sold through social

media platforms like Facebook, Instagram, LinkedIn, YouTube or Twitter (Dollarhide, M.,

2021). In this research, the correlation between usages of social media to boost sales in e-

commerce has been analyzed. To get a more focused result, we have considered a specific social

media platform to have impact on a particular e-commerce industry. We have chosen Instagram

as a social media platform and fashion & apparel industry as the e-commerce segment. Then the

hypothesis statement of this research is developed as: How Instagram has played a vital role in

effective sales boost for e-commerce fashion and apparel industry in major western countries.

Study description

E-commerce fashion and apparel industry has been selected in our research due to large

sales volume and high level of consumers. There has been shift towards online apparel shopping

due to digital innovation, rising globalization and also changes in consumer purchase habits

(Orendorff, A., 2021). Also need to mention the high impact of Covid-19 pandemic after which

consumers have to purchase through online channels due to social distancing. But forecasts

suggest that this purchasing habit will continue to rise in the long run. The online fashion

industry is set to hit $672.71 billion globally by 2023 despite a slightly slow growth due to

corona virus and financial crisis (Orendorff, A., 2021). In the USA, the e-commerce fashion
industry has accounted to 29.5% of retail apparel sales during 2020 and is expected to rise.

(Orendorff, A., 2021). The US online fashion market is projected to have revenue of $100 billion

by 2021 (Orendorff, A., 2021). As the apparel market is extremely huge and results in repeated

purchase, we assume judging e-commerce fashion industry to justify the hypothesis will cover a

significant proportion of online retail shopping.

To justify the hypothesis, a literature review has been conducted as part of primary

research. In the literature review, a past survey over 6,000 participants as well as an observation

of customer conversation about fashion in Instagram posts and Facebook groups has been

covered (Facebook IQ, 2017). Both the survey and observation was done by Facebook IQ using

machine learning and conducted on participants’ aged 18-64 from USA, UK, Germany, France,

Italy and Spain (Facebook IQ, 2017). A secondary research has also been developed using data

and description from web articles, documents and academic papers to justify the hypothesis.

Later, witness from real life example has also been derived that involves two e-commerce

fashion shops named ‘Magnolia Boutique’ and ‘Natori’ of USA. In all the study method, the

result is positive to support the argument.

Analysis

The survey by Facebook IQ revealed that more than half of over 6,000 participants who

use Instagram inspired to be fashion conscious using the platform in the last three months

(Facebook IQ, 2017). It has been identified that Instagram is a great source of fashion

inspiration for people ages 18-64. The reason is especially young people are influenced by

celebrities and influencers they follow on Instagram. In the survey, three out of five people said

that they had been tempted to purchase a fashion item due to the influence of celebrity lifestyle
on Instagram along with Facebook (Facebook IQ, 2017). It has been found that Instagram

remains the number one platform for new fashion item discovery. In the survey result, 56% of

the respondents said they got fashion inspiration from Instagram, followed by 53% from

Pinterest and 46% from Facebook (Facebook IQ, 2017). Another survey was conducted on

observing conversations about fashions at Instagram as well as Facebook. Here the trend around

sustainable fashion and distinct fashion priorities was analyzed and involved users from USA,

UK, France, Spain, Italy and Germany. With about 13M monthly mentions of Fashion hashtag,

the research found that 45% of Instagram users in these six countries follow a fashion brand for

inspiration to purchase an outfit (Facebook IQ, 2017). There was also a comparison of #fashion

hashtag users of women with who does not use. The result revealed that #fashion hashtag users

tend to be more engaged, have 3.63x more followers and 2.21x more following brands

(Facebook IQ, 2017). A very recent hashtag update on Instagram, we have found that the

#fashion is the 4th among top 40 most popular used hashtags on this platform globally (Influencer

marketing hub, 2021).

In the coming years, social media like Instagram will be more relevant as sales and

marketing tool in the e-commerce market. Instagram is changing the total e-commerce fashion

industry. A strong presence on Instagram is necessary for a fashion brand to showcase success in

the business world. A data revealed that 70% of the Instagram users follow a business on this

platform, and 75% of them mentioned that they search further after witnessing any new

Instagram post from an e-commerce like checking details, choosing among alternatives,

purchasing or sharing to others (Blastup, 2020). With over 500 million active users, this

platform has already shown much potential for social commerce industry like online apparel. In

the coming years, more brands use join platforms like Instagram to shift their product and gain
more consumers (Aleksandra, 2018). Another strong part of social media is influencing and

reviewing. The influencer marketing of Instagram is thought to be one of most effective methods

to create awareness and foster online sales (Mau, D., 2018). The power of this platform lies in

the Instagram live option, high graphic images, valuable reviews and Ad content which is highly

influential and visual at the same time (Svirskis, A., 2020). At present, most of the B2C products

are running ads on Instagram to remain competitive in the market. The visuality of ads stimulates

passive desires among users to purchase the product. Brands develop Instagram account to

introduce their products and offers as well as to create awareness. Merchants can tag products on

Instagram with pricing and detailed information accessible to consumers with just one click.

Whenever users of Instagram enter the Instagram account for general browsing, they go through

several product ads alongside browsing (Svirskis, A., 2020). If someone views the full Ad and

the visuality of the Ad stimulates him/her to purchase the product, then the customer is directed

to the main company website like M&S, Calvin Klein, Amazon for example, where the final e-

commerce purchase are done. Instagram Ads and lives shorten the time to choose among variety

of alternative brands and most of the time it results in a happy shopping (Svirskis, A., 2020).

If we want to look at a specific brand to justify our hypothesis, we can consider the

example of Magnolia Boutique. According to the owner of the boutique company, they started

Instagram account for marketing and promotional purpose (Blastup, 2020). They provided

instruction on how to shop in the news feed, introduced live video about the product, run several

ads and posted creative stories in the Instagram account as well as other social media channels.

This resulted in a revenue growth of 20% mainly due to Instagram marketing (Blastup, 2020).

Another apparel online brand, Natori, mentioned that they witnessed 100% increase in revenue

and a huge 1,416% increase in referral traffic to its official website just after few weeks of
launching Instagram account to showcase its variety of apparels and accessories item. The

shoppable posts in Instagram helped to promote Natori’s brand image, created awareness about

their product among shoppers and the apparel company eventually got some valuable customer

base, thanks to Instagram (Blastup, 2020).

Implications and conclusion

From our study, we can say that Instagram is playing a vital role in stimulating consumer

buying behavior on e-commerce fashion industry, thus raising sales revenue. Other social media

platforms also have vital implications to influence fashion shoppers, be it Facebook, Instagram,

YouTube, Pinterest or WhatsApp. According to a study by Mintel from USA, social media is the

first choice for women fashion shoppers aged 18-24. About 20% of all participants keen to

purchase apparels directly from a social media platform while the figure is 32% for women aged

18-24 (Facebook IQ, 2017). If we look at a broader view, the same consideration and hypothesis

outcome will apply for other e-commerce industries as well. E-commerce companies require

social media presence with a view to creating community base, driving website traffic, better

understanding of customers, influencing buying decision as well as generating higher revenues.

Due to covid-19 pandemic and social distancing, companies having social media presence are

expected to perform better through customized social shopping and visual social storefront.

According to Insider’s forecast, US retail social commerce may witness an increase of 34.8%

with $36.09 billion in 2021 where fashion and apparel remains to be the key player followed by

electronics and home decors (Phaneuf, A., 2021). Finally as per the hypothesis evaluation, we

can reach at a decision that e-commerce has converged with social media to develop social

commerce, where clicking links on a social media page that transfer directly to the seller’s

product website will give more revenue as well as enhance brand awareness, trust and reputation.
Reference

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https://www.investopedia.com/terms/s/social-commerce.asp
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