Social media offers retailers opportunity to shine
As retailers look to jump-start a new era of growth in 2025, they can ill afford to neglect the power of social media. But even while three-quarters of UK consumers say they expect to make purchases directly through social media sales platforms this year, fewer than half of online retailers are willing to allow sales via social media.
Recent years have seen retail businesses struggling to shore up their profits. With the supply chain shock of the Covid-19 lockdown months, and the heightened inflation after hobbling consumer spending power, companies have resorted to cutting production and raising their own prices.
But with wages finally rising at a rate which enables consumers to regain some of the spending power they lost to rampant inflation since 2022, research suggests retail is set for a shot in the arm in 2025. Research from McKinsey & Company, late last year, found that demand for non-luxury goods in particular would likely see an uptick over the coming months, driving growth not seen since the pre-pandemic era.
To make the most of that, though, retailers cannot simply rely on the same old tactics. Consumer behaviours have shifted dramatically in the last five years – with a particular move away from in-stoor experiences. This has been illustrated by a new poll from Retail Economics.
The consultancy found that the majority of shoppers are set to return to the high street in 2025, with 54% saying they planned to increase visits to physical shops. However, the researchers also found that many firms were squandering their digital opportunities. Speaking to 400 ecommerce businesses, the researchers found that while plenty of consumers are not prioritising in-store shopping – allowing 84% of ecommerce firms to grow in the last 12 months – that rate of growth averaged a meagre 5%.
There are means through which these retailers could still supercharge their growth, though. The Retail Economics study suggests that ecommerce firms ought to re-examine their relationship with social media, or risk “missing a significant opportunity”.
Recent years have already seen social media sites play a growing role in the sale of goods and services. The Love Island phenomenon in the UK saw a rapid growth in luxury consumer goods marketed on the show via Instagram, while another example is the trend for grocery store tourism which has exploded on TikTok, helping grocers cater to whole new international audiences via viral posts.
Tapping into this energy, new platforms such as TikTok Shop now let people buy products, while watching videos from brands and influencers, without having to even leave the app. Famous brands such as L’Oréal cosmetics and Karen Millen already have presences on the TikTok Shop, and according to Retail Economics, 25% of consumers – higher than the 21% globally – have already moved to interact with the experience there.
Looking ahead, 76% of UK consumers are planning to buy from the likes of TikTok Shop or Instagram Shopping in 2025, presenting retailers with a massive chance to cash in. But so far, just 46% of online retailers have enabled direct purchases on social media.
By the estimations of Retail Economics, this might be something ecommerce outlets should rethink – and quickly – if they are to avail themselves of rapid growth in the space. While social commerce sales are already around £7.3 billion in 2024, that is set to rise at a CAGA of 21.2% to £15.7 billion by 2028.
