Instagram, Shoppable Streams & RED

The emergent ‘social commerce‘ market has a lot of moving pieces and key themes, which makes it difficult to distill into simplified strategies, especially for brands.

This post takes a look at Little Red Book (RED) in China and some lessons that might be relevant for brands who operate on Instagram in Western markets as to how to make content shoppable.

In some ways, this type of strategy is more Social Selling than Live Shopping, which may work well for certain types of brands.

Why create Shoppable Social Media “Streams?”

Shoppable Video looks like the following:

Compared to traditional e-commerce, the funnel essentially collapses and the customer goes from seeing the products in a video, clicking, and paying (or ‘Add to Cart’) in the same funnel.

This could happen on social media (via TikTok Shop) or on a brand’s own website via a suite of new tools.

Despite the launch of TikTok Shop and the hype around that, it is not for every brand.

First of all, TikTok Shop skews towards a younger audience (25 – 34) who are purchasing goods with an AOV (Average Order Value) of $40. These demographics are budget savvy, and are also typically incentivized by discounts and other measures that can hurt a brand’s margins.

We talked about how, after looking at the playbook of social commerce in China, that ‘flipping the funnel‘ and hosting Shoppable Video on the brand’s own website, a company could drive both conversion (avg. of 9% in Live Shopping) and loyalty (brand owns all data when on site).

Social Media Funnel – Live Commerce

Brand’s Website Funnel – Live Commerce

Nevertheless, the interplay between a brand’s own Shoppable content, and social media (whether with commerce capabilities or without), remains a key area of interest in the future of the social commerce market.

What is Little Red Book (RED, Xiaohongshu) and why is it relevant to the US Market?

Little Red Book, RED, or Xioahongshu is like the Instagram of the Chinese market. It has become a hub of launching engaging content for brands, big and small, and has a network of Influencers whose UGC (User Generated Content) has the ability to sway large segments of the consumer markets.

“Xiaohongshu is the most authentic platform for consumers to find real peer reviews and recommendations, which is very aligned with a softer approach, like the one ‘quiet selling’ suggests,” Roizen says.

Jing Daily

Approximately 5% of the total retail sales in e-commerce in the US market are from social commerce, while this same number is over 15% in the Chinese market.

Mckinsey

There are certain signals to look for as to how the market will evolve going into the future, which is why we look a little bit deeper at Little Red Book.

Explainer of ‘Little Red Book’ for Niche Brands

TLDR – Mostly young, female demographic. UGC is king, most major brands don’t create storefronts there, only profiles. It is a “great discovery platform for many brands.” Comparable to Pinterest and Instagram.

The predominantly female user base has comparisons to Pinterest, which is somewhere around 80% female.

Major brands like Zara don’t create e-commerce storefronts, they create brand profiles similar to Instagram.

Danish brand Ganni (no previous market presence) started to gain traction on Little Red Book, and eventually expanded into China.

How does this Case Study above relate to Instagram and the US Social Commerce market?

In the Intro section, we talk about Shoppable Video being the major feature in the market to drive conversion, loyalty, and repeat purchasing on a brand’s own website.

About a year ago, Instagram pulled Instagram Shop, a curious decision after what has transpired in the last six months with the launch of TikTok Shop.

Tactically, this means that the Instagram platform functions for brands as a social and advertising platform, there are no built in payment/e-commerce features.

The funnel revolves around driving the customer from Instagram back to brand’s website or 3rd party e-commerce platform (Amazon, etc.).

The Little Red Book Case Study above shows that despite early momentum by TikTok Shop, it is not guaranteed to run away with the market and take down Instagram.

User-Generated Content from Instagram will play a valuable role in the future of the social commerce ecosystem in Western markets.

Independent of whether Meta adds ‘Shop’ or Payments features back to the core of the experience (they are testing this with Amazon), the question will be how can brands turn this UGC content into ‘Shoppable Streams’ on their own website.

How can a brand turn Instagram content into a Shoppable Steam on their website?

In looking at the Shoppable Video market, there are a plethora of possible platforms a brand can use to add this capability to their website.

Some of the more prominent ones in the early stages of this market are Bambuser, Firework, and BuyWith.

What about tagging UGC content from Instagram to make it Shoppable?

There are many other platforms in the ‘Shoppable Video’ category to analyze, but let’s look at one concrete example.

Platforms like Tagshop.ai have emerged to leverage these same Shoppable capabilities into content from platforms like Instagram.

Brands can curate a mix of UGC and their own content onto a stream that displays on their own website, and then make that content Shoppable on their own website.

Instagram Social Commerce

Thus, the funnel here is focused on customers who are on the brand’s site and want to see content that other like-minded customers have used, reviewed, or are intrigued by, and buy it right there in the same frame.

These social-commerce markets are early-stage, but the consumer is looking for new ways to engage with the brands that they love.

These type of ‘Shoppable Streams’ are but one other way brands can test new strategies to increase engagement, conversion, and overall retention for their e-commerce strategies.

Either way you look at it, the future of e-commerce revolves around video and making it seamlessly shoppable.

*that’s a KaboomPics pic

Hover Over and See ‘Buy Now’ Option

Expandable Product Details Caption

Add to Cart, Stay in Video Frame