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Amazon Takes a Huge Step into Social Commerce

January 12, 2023

Recent attempts have been made by Amazon, the biggest online retailer and marketplace, to expand into social commerce. The term "social commerce" describes the practice of making purchases and sales using social media.

Amazon has tried a few other forms of social shopping on its site in the past, with mixed results. The marketplace has now launched Inspire, a shopping stream similar to TikTok that allows users to upload photographs and videos to promote their wares.

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Examining Amazon's Role in the Rise of Social Commerce is a Must

Previously, Amazon has dabbled with live broadcasting, letting customers see influencers demonstrate and sell things on the spot while fielding questions from viewers. These projects are part of a larger effort by Amazon to make its site more interesting and easy to use.

Amazon's entry into social commerce is complicated by the company's need to compete with established platforms like Facebook, Instagram, and TikTok. As well as attracting a large user base, these platforms also have in-built resources for finding and purchasing products, as well as completing purchases. 

Businesses are beginning to see the benefits of social commerce, which is expected to account for 17% of all e-commerce by the year 2025. Furthermore, by 2021, 64 percent of social media users, or 2 billion people, would have shopped through social commerce. For this reason, the potential is staggering.

Amazon, though, has a variety of benefits that might put it ahead of the competition. To begin with, it has a sizable following of its own, with more than 310 million monthly active users. It also has an advanced delivery system and is spending a lot of money on AI and ML to enhance the quality of service it provides to customers and make its platform easier to use. 

Possible Competitive Advantage in the Social Commerce Sector

Amazon's foray into social commerce is indicative of the company's desire to broaden its customer base and take advantage of emerging markets. Together, Amazon and TikTok provide the optimal digital entertainment experience for today's millennials.

Consumers often consult many different sources before making a final purchase. Shoppers, particularly those in Generation Z, increasingly rely on social media in order to get the best prices, even during major sales events like Amazon's Prime Day.

Video content on TikTok, including the hashtag #primeday2022, was seen 52 million times in the United States, up from 30 million the year before. This demonstrates the significance of social media as an inspiration for today's youth. Some 87% of millennials and Gen Zers say they go to social media for gift ideas each year.

On the other hand, more than half of Generation Z respondents named Amazon as their preferred online retailer. When asked which social media network they preferred, 38% said TikTok.

Since many members of Generation Z are avid Amazon shoppers and TikTok users, it would make sense to provide direct Amazon product purchases inside the app. For modern shoppers, this would provide an unprecedented level of convenience. As it turns out, Amazon has precisely the thing to fix it!

Amazon's "Inspire" is an Attempt at Social Commerce.

Amazon released Inspire, a new shopping feature inside the Amazon app that lets users browse content produced by other users, industry influencers, and companies to find new things, be inspired, and make purchases. 

Consumers may browse an infinite stream of photographs and videos in a manner reminiscent of TikTok. They may quickly and simply make a purchase from inside the app if they see anything they want.

Amazon is hoping that this new addition to the app will get users to spend more time in the Amazon system, even when they aren't actively shopping. Weaknesses in most e-commerce platforms are being addressed here, including the fact that customers only shop online when they have a specific need in mind. 

Contrary to popular belief, kids do not use these applications in the same way that they use social media apps like TikTok. This implies that online shopping is often fairly transactional and does not provide the same opportunity for exploration as traditional brick-and-mortar stores. Amazon's goal in implementing TikTok-like features is to transform the site from a shopping mall into a destination in its own right.

Amazon has stated that the shopping function would launch with a limited number of users in the United States in December 2022 and then expand to all users in the United States in the months that follow. There will be a delay until the functionality is accessible to European customers.

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