Smaller Brands Are Struggling with Social Commerce. Here’s Why

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Social commerce sales will reach $45 billion this year, but midsize brands aren’t expecting a windfall. Despite explosive growth in social media and e-commerce in the last two years, smaller companies and boutique brands have largely been locked out. Billions of dollars in social commerce sales are mostly flowing to the biggest brands.

Global powerhouses like Clinique, Nike, and PepsiCo are partnering with some of social media’s biggest influencers on multi-million dollar campaigns designed to provide credibility and validation for their products. They’re also providing incentives to Gen Z and millennial consumers to share their content in exchange for coupons and giveaways.

In a world where appearing in social media algorithms is largely determined by advertising budgets and engagement, where do boutique brands with regional footprints fit in?

Social Commerce Beyond the Biggest Players

Social commerce is expected to grow 3x as fast as traditional e-commerce, according to a report by Accenture, to reach $1.2 trillion by 2025, but that doesn’t mean savvy marketers from smaller brands can’t find their own points of entry. By thinking outside the box and looking beyond Instagram and TikTok for attention, some midsize brands are finding opportunities to shine.

“Social commerce includes more than just Instagram, TikTok, or other social media platforms. It’s driven by digital word of mouth from friends, friends’ friends, and everyday people in similar situations to an individual consumer’s,” says Mya Papolu. “Maximizing social commerce’s value means producing social proof and promotion by everyday creators so that consumers can buy online from brands they trust.”

As CEO at Brandbass, a company that connects content creators and SMBs, Papolu helps businesses hire creators who can help them tap into social commerce. She says smaller brands have the tendency to only think of the influencer marketing aspect of social commerce, which is all about the follower game, rather than looking into other avenues they can leverage.

“If influencer marketing is all they’re thinking about, then some of the top-tier influencers with higher follower counts and bigger fees are going to be out of reach,” Papolu says.

What started as something purely contained to social channels is now much more than that. Social commerce now includes assets such as videos that drive sales on e-commerce storefronts, like Amazon pages. It also includes offline conversations sparked by social media as a point of discovery. Anyone can put up a Shopify page or an e-commerce storefront, but that’s not enough for small and midsize brands to really make a splash. In order to get people to start talking about their brands, Papolu says companies must find a way to carry out an effective social commerce strategy. 

“Instead of stressing over not being able to afford high-level influencers with massive follower counts, smaller brands need to find the right brand ambassadors who can relate to their target customers,” Papolu says. “Once enough content is generated with them, that content can then be leveraged to bring in new customers and build brand loyalty.”

Midsize brands can obtain greater control of their products by finding the right brand ambassadors with the correct attributes to connect with their target audiences. For a boutique fashion brand or a regional restaurant chain, that might mean seeking out online influencers with niche audiences, based on a certain style or geographic location, or influencers with a strong presence on up-and-coming social platforms that haven’t gone mainstream.

That’s not just true for small and midsize brands but also larger retail chains and CPG brands looking for more success in the social commerce space.

“The industry as a whole needs to have a mind shift when it comes to social commerce,” Papolu says. “All brands, regardless of size, can find ways to implement a successful social commerce strategy without being completely at the mercy of influencers.”

​​Stephanie Miles is a senior editor at Street Fight.

Stephanie Miles is a journalist who covers personal finance, technology, and real estate. As Street Fight’s senior editor, she is particularly interested in how local merchants and national brands are utilizing hyperlocal technology to reach consumers. She has written for FHM, the Daily News, Working World, Gawker, Cityfile, and Recessionwire.