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Snapchat, Facebook or Instagram: Who Is Winning the Social Media Shopping Race?

As fashion brands allocate more of their ad spend to social media, BoF examines which platforms are most efficient at delivering actual sales.
Source: Shutterstock
By
  • Chantal Fernandez

NEW YORK, United States — Just days after staging its 75th anniversary runway extravaganza in New York City, filling Instagram streams of fashion fans across the globe, American leather goods maker Coach announced that it had signed Selena Gomez as the face of the brand in a deal that will reportedly net the 24-year-old entertainer $10 million.

It's a strategy not unlike that of Tommy Hilfiger, which collaborated with supermodel Gigi Hadid this year on a multi-season collection. An image of Hadid — or even mere mention of the model, who boasts almost 27 million Instagram followers — amplifies a post by 46 percent, according to research firm L2, while Gomez — the single most followed person on Instagram with 104 million fans — amplifies it by 55 percent.

Amplification Versus Conversion

But while these partnerships can achieve increased engagement, actual conversion to sales is no slam-dunk. L2 reports that only about 1.5 percent of online sales in 2016 can be attributed to social media, even if 75 percent of shoppers discover products there. Brands therefore consider Facebook, Instagram and Snapchat as media and advertising plays, with the hope that they will be well positioned when retail on social platforms becomes common practice.

But will this ever really happen? Right now, users do not shop at scale on social media. And even if a user does want to make a purchase, the process is often clunky, requiring input of shipping and payment information each time. In turn, platforms are keen to preserve the content-driven, community-led experience that made them popular in the first place.

Instagram, which was acquired by Facebook in 2012 for $1 billion, and has 600 million monthly active users, has launched several shopping-friendly features in the past year to facilitate the process. As of December 14, users can save posts to private feeds that look like visual shopping lists, and in November it introduced ‘tap to view’ tags that allow users to learn more about products from 20 brands, including Kate Spade and Warby Parker. Customers can use an in-app browser to view the brands’ e-commerce sites.

“Our overall strategy is not to reduce the steps in shopping, but reduce the friction between them and make them more connected,” says James Quarles, Instagram's vice president of monetisation. “The number one principle for us in [the ‘tap to view’] product is what we call ‘design for intent,’ which means that we expose more of the information — particularly the commercial information — as you express more interest. It should feel like it always belonged within Instagram.”

Shoppable video was the highest performer of all our shoppable social content, across all of our platforms.

But while it may become easier to shop through social media, will consumers want to do it? According to Bringhub, a content-to-commerce technology company, less than 14 percent of people who see a fashion item on social media buy it immediately and, according to Instagram, people take a day or longer to complete a fashion-related purchase.

While it’s too early to tell how well Instagram’s new shopping functions are working, it’s also clear that the platform is committed to harnessing the potential of its catalogue-like feed. When it launched its own version of Snapchat Stories, a stream of content that disappears after 24 hours, Instagram made the tool more brand-friendly by enabling tagging. And according to L2, Nike’s first Instagram Story earned 12 times more views that the brand’s previous best Snapchat story.

However, neither platform comes close to Facebook’s user base — 1.79 billion monthly active users — which gives the network an advantage in turning brand awareness into sales. When Tommy Hilfiger debuted its direct-to-consumer Tommy x Gigi collection in September, the brand made its social media accounts as shopping-friendly as possible. The highest conversion came via Facebook’s new 360-degree runway video ad solution, which allowed users to add the products in each runway look to their carts. “[The shoppable video] was the highest performer of all our shoppable social content, across all of our platforms,” says Avery Baker, chief brand officer for Tommy Hilfiger.

Conversation Commerce

The Tommy x Gigi collection also utilised Facebook's first conversational commerce experience, an artificial intelligence-powered bot that answers questions about the collection on Facebook Messenger, adds items to the user's cart, and sends them to Tommy.com to complete the purchase. The brand is one of several including Everlane (an earlier adopter), Shopify and Sephora investing in the tool, which mimics some of the features on China's massively popular and sales-driving app, WeChat.

“It really combined, in one experience, the ability to have more a personal dialogue driven not by us, but driven by the consumer,” says Baker. “The fact that the bot was built with artificial intelligence to be able to respond to what a consumer is looking for, rather than it being a push model, for us, that feels like a reflection of the best experience you have when you go actually into the store, which we haven’t always been able to bring into the online experience.”

Consumers spent an average of almost five minutes chatting with the bot, 25 percent more time than they did interacting with the brand’s other digital commerce channels. Yet L2 reports that only 4 percent of the fashion brands it surveys even have a chat bot enabled on the platform.

“There’s a ton of potential there since Facebook can so easily transition to Messenger, and can start to train users to interact with chat bots and get more used to that automated service,” says Ankita Dhawan, L2’s client strategy senior associate. “It still feels really high touch but is much more automated and has the potential to drive the consumer to where the brand wants them to go.”

Facebook is also currently the main social media sales driver for Kate Spade, which posts straightforward, product-driven content for customers scrolling through feeds very quickly. And it is Warby Parker’s most effective paid customer acquisition tool, even though behaviour has changed over the company’s six-year history.

Facebook can start to train users to interact with chat bots and get them more used to that automated service.

“We still find that a huge portion of our customer base spends a lot of time on Facebook,” says Warby Parker co-founder and co-chief executive David Gilboa. “But there isn’t as much engagement [as there used to be] in terms of posting photos and getting feedback. And a lot of that behaviour has shifted to Instagram.”

Meanwhile, Snapchat is by far the best place to reach the under-20 set. “The Generation Z demo is very fragmented and private in terms of their media consumption,” says Jessica Kia, co-founder of digital marketing consultancy RJK Project. “It’s hard to infiltrate that bubble.”

Snapchat remains secretive about its goals, but Hearst executive and Snapchat board member Joanna Coles revealed in February that it “will morph into an e-commerce platform” at some point. In 2016, it launched the highly anticipated Spectacles camera glasses, establishing itself as more than a software company, and opening the door to untapped commercial potential of future iterations.

While all social media platforms aim to keep users within the app (both Facebook and Instagram have in-app browsers) Snapchat is unique in that it doesn’t allow any exterior links. Users can sometimes swipe up on ads to visit mobile sites, a feature Tommy Hilfiger and L’Oreal have experimented with, but shoppable ads are still uncommon and require the user to input payment and shipping information to complete any resulting transaction.

For now, however, Kia argues that Snapchat is best for building general buzz, not conversation. “Unless you are investing in a branded campaign and it’s just purely for awareness, and that awareness does not need to be quantified with result-driven KPIs, I don’t recommend my clients invest in Snapchat as a direct-response vehicle,” she says. Kylie Jenner, whose beauty products often sell out in minutes when she announces a restock on Snapchat, is a notable exception. She is the most followed person on the platform.

To Target, or Not To Target

Another challenge for brands is that Snapchat is not forthcoming with user data. Founder Evan Spiegel has previously spoken publicly about wanting to maintain the privacy of users. But in September, the company released a new ad platform that allows targeting based on e-mail lists, interests and user characteristics, even if retargeting users who have already seen and interacted with an ad is still not an option. "We want to understand what's relevant to you and your life, and we want to show you things that you'll care about," reads Snapchat's privacy policy. "At the same time, we don't want to serve ads that are so custom-tailored that they feel invasive or uncomfortable."

What does ad targeting have to do with social commerce? The less a brand knows about the type of content users are clicking on before making a purchase, the harder it is to understand what influences them to actually complete a purchase — and how to best spend ad budgets.

While Facebook’s ability to track users on multiple devices (and Instagram) is extremely valuable for brands trying to target the right user on the right device at the right time, Facebook admitted in November that it had miscalculated and inflated ad metrics. And since users are in and out of Facebook and Instagram all day long, the company has set a very wide net for what it considers a conversion. It has promised to allow third-party firms to vet some of its data moving forward, but the discrepancy between Facebook’s tracking and third-party analytics providers, such as Google Analytics and DoubleClick, makes optimisation tricky for brands.

It's such a shame to see all this inspiration happen on Instagram and not translate it into some sustained relationship with the business and the brand.

Despite the challenges in understanding its metrics, “Facebook and Instagram have provided unprecedented amounts of data that allow you to reach those people in a way that is really efficient and can be really personal,” says Kia. “You can really create hyper-relevant content for very specific people at scale.”

“People are going to demand and expect a personalised experience because the data is there to support it,” says Mary Renner Beech, Kate Spade & Company executive vice president and chief marketing officer. “Now it’s about these amazing networks turning on that data to allow for personalised shopping and viewing experiences.”

The networks also need to turn on mobile wallets. While both Facebook and Snapchat have their own payment systems — Facebook is integrating PayPal and other payment providers in the US — they are not seamless or popular enough to encourage social commerce on the scale of WeChat. “People are on their phones and don’t want to have to spend the time to enter a bunch of different fields [each time they make a purchase],” says Gilboa.

“Maybe we’ll partner or find a way to reduce friction through the purchase process, but what we’re trying to do right now is not have people get lost,” says Instagram’s Quarles. “It’s such a shame to see all this inspiration happen on Instagram and not translate it into some sustained relationship with the business and the brand.” In the crowded and disparate worlds of social media, that’s easier said than done.

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