Discovery Commerce – when products find customers

what is discovery commerce

Social commerce is an enduring trend in marketing and e-commerce. But discovery commerce is even more important than searching for and recommending products via social media channels. It turns the interaction axis between customers and brands by 180 degrees. In this article, you will learn what exactly discovery commerce is, what advantages it has, and how you can implement it in practice.

Discovery Commerce: What’s behind it

Discovery commerce refers to a sales method used in e-commerce to draw customers’ attention to a particular product and encourage them to buy it. This can be done through social media channels such as Facebook and Instagram.
Traditionally, customers would search for products online, for example via Google Search or Google Shopping. Information that Google collects on the customer’s search history can then be utilized for specific search marketing and Google Ads can be used to target the customer based on the data generated.

Discovery commerce, on the other hand, changes the interaction between customers and companies’ products. It turns the interaction to 180 degrees around. In other words, instead of customers actively searching for products, potentially interesting products find the customer on social media platforms. Discovery commerce is primarily intended to inspire customers and convert them step by step from prospective buyers to actual customers.

Pioneer Facebook

Facebook is considered the pioneer of discovery commerce on social media platforms. However, Facebook parent company Meta has not only integrated it into Facebook, but is also making progress in establishing it on Instagram. The goal: to focus on the interests of customers on social media. Social media platforms such as Facebook and Instagram are thus basically becoming what the long-running commercials used to be – only in this case, the long-running shopping experience is online. Shopping should therefore become even more deeply rooted in social media and increasingly inspire customers on the internet instead of making them search.

Being found instead of searching – that’s how discovery commerce works

But how exactly does Discovery Commerce work? The principle is simple, but effective. Facebook collects data from its users and draws on their existing information – a point that not only has advantages, as we will show in the next section. Based on the user data, Facebook learns what interests users have. The analysis is the basis for displaying potentially suitable products in the user’s feed. Brands and products are therefore displayed occasionally in the feed, based on the interests of Facebook and Instagram users. Users “stumble” across these advertised products while scrolling through their feed.

The Facebook algorithm is constantly learning which products might be suitable. When users click on an advertised product in the feed, Facebook collects further information. For example, how much time users spend on the post or on the company’s store website on Facebook. And also whether they end up buying a product or not. With the ongoing analysis of the generated data, the Facebook algorithm then optimizes further product suggestions for users.

The Facebook algorithm does nothing else with this than what is already crucial for companies to be successful: Personalize content. What is illustrated on Facebook through the algorithm can be realized in the marketing of companies, for example, by using automation tools. They also have analytics functions that align content presentation with the needs of customers. You can find an overview of 23 marketing automation tools providers in our market overview.

Challenges and benefits for companies

Crux: Data protection

Discovery commerce thrives on user data, as does any personalization of content. Data protection is therefore the biggest challenge for companies that want to use discovery commerce for their own purposes. Facebook, in particular, is repeatedly criticized for data protection after the scandal involving the data analysis company Cambridge Analytica in 2018. However, this also applies to other social media platforms. It is therefore important for companies to always keep an eye on the data protection aspect when they rely on discovery commerce, because new regulations could also become a hurdle for Facebook here.

Advantages: Personalization at its best

The biggest advantage of Discovery Commerce is the personalization of product suggestions. The Facebook algorithm already delivers very good results, so that the chance of an increasing conversion rate is high. But that’s not all: Discovery Commerce also supports spontaneous purchases and higher shopping carts through the idea of inspiration. As customers scroll, their attention is sporadically drawn to products. The inhibition to buy is lowered because the shopping experience takes place alongside the actual activity – the entertainment on social media platforms. In the end, customers buy an interesting product more quickly or even put more in the shopping cart than they might have originally wanted. Discovery commerce can be an important sales driver.

Discovery Commerce also supports companies in other ways:

  • Easier retargeting: It is easier to pick up customers at the last stage of the customer journey. For example, if products have already been added to the shopping cart but the purchase has been cancelled, Discovery Commerce can reach customers more quickly at this point and motivate them to complete the purchase – e-mails are no longer necessary.
  • Brand discovery: Younger companies in particular benefit from discovery commerce, because potential buyers find their products on social media. This increases awareness, raises the profile of the brand or brands, and ideally leads to more conversions for new companies and products.
  • Optimization in e-commerce: It is easier to optimize the product range and catalogs in particular. Based on the clicks on products in the feed, companies can see which are particularly popular with customers and which are “doing well”, so that they can make adjustments more flexibly.

In practice: Possible applications

Companies can use discovery commerce in retargeting, as we have already described above. But also dynamic ads can be better created and played out for potential prospects using this sales method. One of the most important uses, however, is the development of a Lookalike Audience. Companies can expand their core audience more easily by using discovery commerce. New target groups with similar characteristics can be identified and taken into account in marketing.

Conclusion: Discovery Commerce is one of the central marketing trends

Discovery commerce is of central importance among the marketing trends of 2023. Not least because Meta is constantly driving it forward on Facebook and Instagram. The new way of interaction between customers and products offers companies more opportunities to increase sales in different ways. It is therefore conceivable that discovery commerce will also establish itself on other social media channels such as the TikTok platform in the future.

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