Poshmark Report Examines Trends Toward Growing Social Commerce
Social-commerce company Poshmark released its first review of the social-retail environment in a report called “A Year in Social Commerce.”
By studying online interactions and transactions that occurred on the Poshmark platform, where people can buy and sell new and used clothing, footwear and accessories, the e-commerce company was able to identify the most important social-shopping trends and forecast how these consumer habits will affect the future of retail.
“Retail is not an isolated activity. Human interactions and socialization are the foundation of it.
Social and commerce are scaling together,” said founder and Chief Executive Officer Manish Chandra, whose company is headquartered in Redwood City, Calif. “That is what prompted us to research our own system, but also massive transaction volume, and combine it with some of the research in our industry data.”
With its users spending from 23 to 27 minutes each day on the platform, Poshmark has found that social interactions are involved in 78 percent of its transactions. Visitors to Instagram devote 28 minutes to the application, and Facebook and Snapchat users visit those sites for 27 minutes daily. Whether Poshmark members contribute to the platform’s 1.2 million likes, 18 million shares or 350,000 comments, these new online social cues help drive commerce.
“Generations of customers who have been part of Poshmark over the last seven-plus years—each generation is more loyal than the next,” Chandra said. “The loyalty is exponentially increasing, not just because of the merchandising but because of the social human relationships and connections that form on the platform.”
For retailers who have not yet invested in cultivating a social-commerce presence, Chandra outlines the opportunities for businesses to ease the shopping experience for customers who prefer different purchasing options.
“You could discover a product anywhere—a physical store, on Instagram or on Poshmark,” he said. “You should have the option to buy it when you discover it, buy it later on from the comfort of your home or buy it in the store and have fulfillment at your home or vice versa—buy it at home and fulfill it at the store.”
Current numbers from the report show that 40 percent of the world’s population uses social media and 69 percent of Americans are using these types of applications. As these numbers grow, Poshmark forecasts that approximately 70 percent of retail e-commerce sales will come through mobile by 2021, and Chandra believes this should inspire retailers to devote more resources to increasing social-commerce initiatives.
“Human interactions are absolutely critical to scaling commerce,” he explained. “By removing them from your experience and making it more sterile, while you might achieve a certain level of efficiency, it comes at the price of loyalty and engagement.”
Through social commerce, consumers are returning to the more traditional shopping experiences, during which they would shop at bricks-and-mortar locations with friends. Now, according to the report, friends take the form of other online users who are engaging through these platforms, as 74 percent of millennials say social influences shopping, 72 percent of shoppers buy due to inspiration from Instagram and 56 percent of buyers examine product reviews from other buyers prior to making a purchase.
These consumers also want more assistance from brands through social platforms, with 59 percent of shoppers expecting greater customer service than a year ago and 48 percent of consumers reporting that they would like brands to help them discover products.
“In a world where you have one online giant dominating the market, human interactions give you specific, long-term competitive advantage,” Chandra said.