Business expansion: how social commerce and revenue-based finance fuel growth

Business expansion is a target for many business owners. The reasons are clear: growth paves the way for increased revenue and profitability, market competitiveness, and the opportunity to explore new markets and recruit top talent.

Business expansion isn't a stroke of luck – it's about strategic moves like leveraging social commerce and revenue-based finance.

In this article, we’ll explore how combining social commerce with revenue-based finance can act as a powerful catalyst for business expansion and help you grow, focusing particularly on:

• What social commerce is and how it can support growth
• Strategies for customer acquisition through social commerce
• How revenue-based financing can fund your strategy

What is social commerce - and how does it support business expansion?

eCommerce is an economic titan, with global sales reaching $5.8tn in 2023 and poised to surpass $8tn by 2027.

While eCommerce has an established role in helping businesses grow, social commerce is also invaluable in fuelling success and subsequent growth.

What is social commerce?

Social commerce is selling products directly via social media platforms: Facebook, Instagram, Twitter, TikTok, and more.

This can be as easy as browsing your social site of choice; spotting a product you love, and clicking a ‘Buy now’ button.

The power of social media lies in the conversation it creates. That’s what makes shopping direct unique: users discuss, like, share, and swoop for the hottest items. Social commerce thrives on inspiring shoppers, seizing on trends, and fuelling demand for products people don’t always know they need.

Its potential to increase sales is so huge that some startup companies are abandoning plans for physical stores and focusing their attention solely on digital trade.

How do social commerce and eCommerce differ?

A key distinction lies in the customer’s purchase journey. With eCommerce, a customer mostly begins with a search engine query. Their browsing experience is structured when they visit your online store. Products are easy to find and checking out is easy.

Because eCommerce takes a transactional focus, sales rarely rely on social interaction. Of course, shoppers find customer reviews helpful – but you can moderate them to your guidelines: you’re in control.

With social commerce, it's a whole different ballgame. Success hinges on social interactions and discovery across a myriad of platforms. Social commerce allows you to increase or decrease your presence across all social channels.

You can also team up with influencers and armies of followers, who’ll do a product marketing job for you. User-generated content is a significant contributor to the success of the biggest social commerce brands, as shoppers create promotional material to praise products and spread the word.

Which social commerce tools support business expansion?

There’s a breadth of platforms you can use to support your business expansion:

Facebook Marketplace/Shops

Facebook leads the way in social commerce with 64.6 million US consumers expected to buy on it in 2024. Marketplace is a popular peer-to-peer, hyperlocal channel; a digital marketplace where people can buy, sell and trade items with others in their location. Shops help businesses set up a media-rich digital storefront, so consumers can discover and purchase products without leaving Facebook.

Instagram Shopping

Instagram will attract nearly 47 million US social buyers in 2024. Tools allow businesses using the platform to tag products in posts and stories and allow other users to shop directly from the app.

TikTok Shopping/Shop

TikTok had more than 35.3 million social buyers in 2023. Shopping integrates with eCommerce platforms so users can buy products directly from TikTok videos and live streams.

Shop, however, gives sellers an entire suite of solutions, features, and tools that enable consumers to buy in-app, without opening a web browser. TikTok Shop’s doubled in growth every two months since launching.

Pinterest Shopping

This platform offers Shopping Ads and Buyable Pins, boosting sales of popular items showcased on, and buyable directly from, the platform.

Snapchat Stores

Brands can create a new sales channel in their public profile, so users can discover, browse and buy in the app.

X

The platform formerly known as Twitter launched Shops in 2023. Businesses can showcase collections of up to 50 products via their profile – with customers just one click away from purchasing.

YouTube

Includes shopping features in videos so creators can tag products in their content.

Depop

A social commerce app that’s focused on buying and selling vintage and pre-loved fashion. It began life as a creator social network for sharing ideas and selling products and retains its social media elements.

Poshmark

The site is used to buy, share and sell apparel, while also allowing its 80 million members and 7 million sellers to share, follow, like, and comment on listings.

How social commerce supports customer acquisition

Repeat purchases and positive reviews from loyal customers and brand advocates play a key role in your business expansion and growth.

Social commerce is rapidly growing, with a penetration rate expected to reach nearly 25% in 2024 and increasing across all age groups. A smart customer acquisition strategy using social media and other digital channels is essential in attracting customers.

Customer acquisition tips to spark growth

A customer acquisition strategy helps identify, engage, and convert prospects essential for your eCommerce business, whilst leveraging numerous digital channels. These include websites and blogs, newsletters, live shopping events, organic social media, paid ads, and customer-generated content to boost sales.

Social proof is the lynchpin of growing your business through social commerce. It helps you garner trust, engagement, conversion, and loyalty amongst your customers, and can be supported by following the following best practices:

• Sharpen your storytelling – use history, emotion, values, and key information to connect with your audience. Set clear goals for your content, making sure each piece nudges towards a purchase.
• Find partner influencers – collaborate with social media influencers to quickly reach a large audience. Use platforms like Shopify Collabs to find the right influencers who are genuinely interested in your product.
• Dial-up customers’ content – encourage customers to create content, such as Instagram reels or TikTok reviews, to boost authenticity. Share this User Generated Content (UGC) on your channels and use it in your marketing campaigns for wider reach.
• Seek referrals - set up a referral program to make it easy and rewarding for loyal customers to refer new ones. Offer points, discounts, and exclusive content as incentives, using tools to manage ‘loyalty levels’ for additional rewards.

How revenue-based finance can support business expansion and social commerce strategy

While social commerce can help you grow, it may well be the case that you don’t have the capital needed to set the ball rolling.

Financing can be a true accelerator of your social commerce strategy. From buying inventory and controlling stock to managing logistics and driving marketing activity, your eCommerce business will require regular, significant capital investment and cash liquidity as you seek to steal shares from your rivals and target growth.

There are many options to keep your eCommerce company on an even keel, but many are complex and take up precious time. However, revenue-based financing is an alternative that makes things easy.

What is Revenue-Based Financing (RBF)?

With revenue-based financing, you receive capital in exchange for a percentage of your future revenue.

This means you can retain ownership of your business and control of your operations without the oversight of investors. Forget about fixed repayments and equity dilution.

With RBF, your focus stays on growth. It’s a win-win for you and the people backing your business. It allows you to inject cash into inventory, marketing and other parts of your growth strategy, such as social commerce initiatives.

You can make the most of emerging opportunities, like new social media platforms, target markets, and product categories, without overextending your finances. You can scale up – or down – as your revenue fluctuates. It offers a unique, attractive alternative for eCommerce companies seeking growth capital while trying to minimise the drawbacks that are frequently associated with debt or equity financing.

Spark your social commerce strategy and support your business expansion with revenue-based financing from Stenn

Revenue-based financing from Stenn can be the catalyst for your social commerce strategy and business expansion needs.

With flexible funding options tailored to your revenue streams, you can focus on scaling your business and capturing new market opportunities without the burden of traditional financing constraints.

Reach out now to see how revenue-based finance can boost your growth and propel your business forward.

Unlock funding now.

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