Social shopping is all the rage – but at what cost for retailers?

In recent years, social commerce has become a lucrative way for retailers to easily access new and existing customers through solutions that are easily integrated into a variety of social media platforms. Social commerce has grown quickly, with platforms such as Facebook’s Marketplace and Instagram allowing for a seamless shopping experience that enables customers to purchase items that they have seen on social media platforms  through the simple click of a button or swipe of the screen. 

Popular TV programmes and celebrity influencers can influence purchases through social commerce to soar – as has been seen with the ultra-on-trend UK show “Love Island” which has just wrapped up its winter season finale. The hype surrounding the show led to a rapid increase in impulse buying, with the Love Island app and social media making it super easy for consumers to buy an outfit that aired on the show. In 2018, UK brand Missguided, who sponsored that particular season of the show, reported a 40% jump in sales on evenings when the programme aired. 

The slippery slope of returns 

While social media platforms such as Facebook, Snapchat and Instagram can rapidly push up profits through this trend of social shopping in the short term – it is important to realise that a high number of returns will result. In fact, 63% of online shoppers buy a product before 

returning it due to buyer’s remorse, ordering the wrong item or changing their mind. 

When purchases can be made in a matter of seconds, it increases the chance that a consumer will buy something that ultimately does not meet their expectations. They are unable to feel or try on clothes or view products such as electronics or jewellery, as they would in a physical store and due to the ease of buying online often customers do not think to check about an item’s finer details. 

High rates of returns not only cause logistical problems for ecommerce companies, but massive financial losses too – it is estimated that UK online retailers lose £6.6 billion every year due to clothes being returned. With such a phenomenal amount of stock being sent back to warehouses that are already being filled with new merchandise – it is clear that unwanted overstock needs to be addressed quickly and simply to offset losses for retailers. 

Circular economy could be the answer

Utilising B2B online auction marketplaces, such as the ones hosted and managed by B-Stock, can be configured, integrated and scaled to meet the exact needs of the business to free up much-needed shelf space for new inventory and unlock a new revenue stream to offset the money lost in the returns cycle. 

By implementing this type of technology, retailers are tapping into an already strong secondary market, complete with an extensive buyer base of interested parties. This not only delivers higher pricing but can also rapidly speed up the sales cycle, automate the sales process and generate exclusive market intelligence in the form of real market data to decide a product’s worth.

With customers today increasingly returning items at a rapid rate, retailers need to reconsider the processes in place for the handling and remarketing of merchandise in order to maximise the profit margins available. Applying next-generation technologies to the returns process will have a huge positive impact on the bottom line for retailers whilst making the way that they deal with the huge influx of returns a much smoother and simpler process.

Ben Whitaker, EMEA Director at B-Stock