L’Oréal, Instagram Lead Late-Year Social Commerce Push

The social commerce category is finishing the year with a flourish. New announcements from Instagram, L’Oréal and Snap lead the way, as consumers find new ways to shop from shared videos and social posts.

Instagram’s announcement that it will make its Reels feature shoppable is a clear response to TikTok’s popularity and the latest in Facebook’s corporate push toward more commerce and video. After announcing a test of shoppable Reels in October, the company has formalized the effort with a global shoppable video rollout. It’s also a play to capture TikTok’s Gen Z and millennial audience. Comscore data says the share of U.S.-based TikTok users between 25-34 years old increased from 22.4 percent in January to 27.4 percent in April, while the 18-24-year-old bracket fell from 41.1 percent to 35.3 percent.

“So it’s no surprise that Instagram is making moves to replicate TikTok’s most popular features — especially in areas where TikTok hasn’t already amassed a strong foothold, like Brazil,” says social media fan site Later. “In fact, this isn’t the first time that Facebook, Instagram’s parent company, has attempted to launch a TikTok alternative. Facebook previously launched a short-form standalone app Lasso, but it has failed to take off as yet. Reels, however, could have a much higher chance of success thanks to its prime positioning in the Instagram app — and all of the exposure and familiarity that comes with it.”

It’s that exposure that has driven L’Oréal to make a major but undefined investment in social selling platform Replika. The New York- and Paris-based company has been a favorite of several high-end brands, and bills itself as a “social selling solution (B2B) enabling brands to activate their network of social sellers with a turnkey business to inspire on social media, sell online and connect with consumers anytime, anywhere.” This multifunctional platform includes curation tools, allowing social sellers to build inspirational, personal web pages connected to the brand’s website, and a marketing platform where sellers can create optimized, brand-safe social posts that lead to transactions. Additionally, Replika has a platform for brands to expand and manage the relationships with these social sellers.

In practice, that means turning customers into influencers via a social selling technology platform. For example, Sephora is using Replika to provide its in-store personnel with a turnkey social selling “My Sephora Store” to encourage online sales and forge stronger customer relationships.

According to MarketWatch, L’Oréal is making a “minority investment” in Replika via its venture capital fund, BOLD Business Opportunities for L’Oréal Development. Its specific use will be to enable new sales channels for live shopping or livestreaming, said Lubomira Rochet, L’Oréal’s chief digital officer. “Our ambition is to crack this new channel and create a healthy and dynamic ecosystem of social sellers for the beauty category,” Rochet said. eCommerce currently makes up around 25 percent of L’Oréal’s revenue, she noted.

“The platform was conceived with the three stakeholders in mind: the brand, the social seller and the consumer,” Replika Co-founder Kareen Mallett told AlleyWatch recently. “With retail foot traffic declining and the commoditization of online shopping rising, there is a loss of consumer loyalty online. Replika Software enables brands to activate a new selling channel while controlling the brand identity/messaging and having complete oversight of the experience.”

Snap is also getting more seriously into social commerce. It recently introduced Spotlight, a video feature on its app that seeks to avoid some of the controversial video content that appears on TikTok but still maintains the shoppable element. “We designed Spotlight to entertain our community while living up to Snapchat values, and we can’t wait to see what our community creates,” said the company in a statement.

Smaller brands are also making a play for the market. In the EU, makeup and beauty social selling app AGORA claims 50,000 registered users who have produced in excess of 50,000 videos to date. In 2021, the company plans to scale its platform, allowing global and independent brands to launch flagship stores on the platform. It will also roll out more advanced tech solutions such as livestreaming and artificial intelligence (AI)-powered personalization.