Halo insight 22
June 2020
5 Mins
Paul Bailey Brand Strategy Director

E-Commerce: From Transaction To Experience

Online shopping is generally a solitary activity – more about the purchase result than the experience. But is that all about to change?

The Shopping Trip

One thing physical retail still has over ecommerce is shopping as a shared experience. The act of going for a shopping trip with friends is one which is embedded in our culture. Your first shopping trip with friends is a rite of passage, and a totally different experience to being dragged around the shops with your parents. Showing items to friends, getting valued opinions and recommendations (and maybe even friendly abuse, ‘you like that?’).

A day out shopping is a social activity – the value of which is so much more than the products you might return home with.

Physical retail has taken a pounding from ecommerce, but it has always had ‘shopping as event’ as its ace card. A shared, social experience that ecommerce, as a more solitary activity, has been nowhere near replicating. But in China, this isn’t necessarily the case.

Social eCommerce

In China, group online shopping is a popular activity. It’s estimated more than $413 billion of goods will be sold through social ecommerce in China by 2022, an almost fivefold increase from $90 billion in 2017. One of the major platforms for this is Pinduoduo (pictured), translated as ‘Together. More savings. More fun.’ The platform encourages users to form ‘shopping squads’ on social media to group-buy items — the more buyers, the lower the price. As the second most popular ecommerce platform in China, Pinduoduo is designed for people to ‘share, explore, and purchase together’. The format is designed to be more experiential than transactional – encouraging the ‘fun of discovery typically associated with offline shopping’.

Although popular in China, western cultures have been slow to pick up on this trend. However, with the enforced COVID-19 lockdown we’ve seen across a number of countries, people have become more used to virtual group activities. Whether it’s pub quizzes on Zoom, watching films together with Netflix Party, or listening to a music album on Tims Twitter Listening Party, we’re becoming more accustomed to doing things together, apart. So why not shopping?

A newly launched app, Squadded Shopping Party is one new attempt to bring this shared shopping experience to a Western audience. From encouraging people to shop with friends, to interacting with a brand’s community, the app is an attempt to make online shopping social.

Win Win?

There is value to both parties here – businesses and people. The value to businesses may be in increased purchases. According to a recent article on this topic, ‘54% of individuals interviewed by research firm Nielsen said they increased expenses in unplanned shopping in 2019, 80 per cent of which said social recommendations like friends’ suggestions and social media groups stimulated those impulse purchases.’ This seems fair. People may be swayed to purchase if encouraged by friends they are with. One value to people is in the shared social experience, but there can also be a transactional value in getting better deals. An element of the offering of Pinduoduo is that people can reduce the unit price of an item by increasing the quantity purchased (ie getting friends to buy too).

From Solitary To Social

So, now we are all more comfortable with shared online experiences, is it time for online retail to take advantage of that?

If a brand is in part shaped by the customer experience, then social ecommerce is a huge opportunity to change the online experience of a retail brand.

In moving online shopping from a transactional activity to a shared experience – from solitary to social – retailers can help create shared moments people can remember, and associate with the brand.

Maybe we’ll be seeing more of people enjoying social ecommerce – shopping together, apart.