Social Proof is defined as a herd-psychology mechanism, whereby people tend to follow what others in their ‘tribe’ have already done. More succinctly, it is a ‘strength in numbers’ idea.
In the digital world, specifically eCommerce and local business, it means that people are more likely to trust something that has already been verified by others before them.
Reviews have become the focal point of much of the digital economy in this regard, as we now see many businesses proudly displaying “5 Star Reviews” as the main component of their marketing.
In Local Search, reviews are a major SEO-ranking factor. Businesses actively curate reviews from satisfied customers, and Google displays those with good reviews at the top of the ‘Map Pack.’
If we think back to the time before the internet, businesses used to build trust ‘live,’ either in-person or on TV/radio. We had trusted intermediaries like the Home Shopping Network (HSN), or local media to advertise, but there were no search engines and ‘reviews’ were almost unverifiable.
How does that translate into a world of digital commerce where video becomes an increasingly dominant medium of both advertising and live commerce?
Remember that Google is testing integrations of TikTok into its new SGE (GenAI) Search. ‘Social Search’ around video will become more prominent in the future.
Social Proof, Reviews, and Video Commerce
- Reviews Dominate eCommerce
- What Will Happen in Video Commerce?
- Authenticity Sells In Video Commerce
- How Do We Measure Authenticity?
- More Social Proof + Video Commerce Posts
Reviews Dominate eCommerce
Hard to argue with the importance of reviews in eCommerce. The vast majority trust reviews as much as they do personal recommendations.
That’s why we see them front and centre of most homepages for major eCommerce and DTC brands.
The average customer reads 10 reviews online before making a purchasing decision.
And it’s not just eCommerce. Most of what happens in a local market is dictated by reviews. That’s why Local SEO is so important.
Think what happens for a Google Search, let’s say for something like ‘Hair Cuts in X City.’
Obviously in this purely hypothetical example, we can see that the 4.9 Star and 4.7 Star rated entities (Jimmy’s Hair Salon and Alberto Hair Care) would be the best, while the 3.9 Star entity (Angel Quick Cuts) would be the worst.
Getting over the 4 Star hurdle is an important psychological hurdle for the majority of consumers.
But what about the four in the middle (4.1 to 4.5 stars)? Are the small fraction of ratings difference enough to sway consumers towards one place or another?
We know that from there, most people will click on the place(s) they are interested in, read the comments, and look for any other signals that help them decide whether or not to purchase from the business.
Despite how important reviews are for eCommerce and local businesses, there is obviously more that can happen to sway purchasing decisions in favor of one business vs. another.
What Will Happen in Video Commerce?
As we start to see the many manifestations of social commerce emerge, there are a few different prominent models:
- #1 Brands use TikTok Shop or equivalent platforms, where all the activity (including payments) happens on the social platform (TikTok, Facebook, YouTube, etc.)
- #2 Brands drive their customers + social networks to livestream and then embed the experience into their own branded channels; the transaction comes back to their own platform
- #3 A modified version of the above, except the transaction is driven to a 3rd party eCommerce platform like Amazon for conversion into a sale
In all of the above, reviews can play a factor in the purchasing decision.
TikTok Shop indexes reviews from verified buyers on their platform.
In models #2 and #3 mentioned above, it can look like the below, depending on the the specific software a brand will use.
In this case, we see see it as if the Livestreamer is presenting the product to an audience. Part of the video commerce software is to offer a ‘Want’ or ‘Buy’ button that can direct seamlessly to the brand’s checkout page.
As we can see in the above example, reviews remain part of the live shopping experience.
Yet if we think back to the days of The Home Shopping Network – a pre-Internet brand – there were no reviews on the platform.
How do the two elements – reviews + a livestreaming host – dovetail together?
Livestreamers have the ability to influence consumers into purchasing without any reviews. This deals with behavioral psychology and other elements of sales.
Reviews vs. Livestreamer Influence
Nevertheless, reviews add an additional layer of ‘social proof’ to livestreaming. How much additional weight and influence in the social commerce era remains to be seen.
Typically when people see an Influencer of Creator they relate to from a values perspective, they are likely to take their ‘suggestions’ as a personal recommendation much in the way they would from a family member or friend.
Taking the example again of the hair salons on the map, the four hypothetical salons with ‘average’ ratings (relatively speaking). If there was a livestream done by the business owners or an Influencer in the space, it would obviously have the ability to sway the purchasing decision of consumers in some way.
How much so is unknown.
This same logic applies to both products and services. While reviews remain cemented in the consumer logic, there will be opportunities within the era of ‘social commerce’ for brands to catapult within categories.
Authenticity Sells In Video Commerce
By all accounts, authenticity is what sells when on a livestream. Authenticity encapsulates multiple elements including:
- knowledge/expertise in the subject area
- a following of some kind (Micro-influencers can be very good Livestreamers too, it is not just celebrities)
- a level of professionalism in both physical aesthetics and preparation/delivery of the stream
When these elements are in place, both existing and potential customers feel a connection to the Livestreamer, and in some cases they feel like they start to get to know them.
Converting Social Capital to Video Commerce
The trust built between the Livestreamer and the audience becomes a way to – in the context of social commerce – turn the social capital into commerce for the brand.
We can look back to both the Home Shopping Network days for inspiration on this.
The more recent example was where a Livestreamer in China sold $2 billion worth of lipstick on a single day via social commerce channels.
But the West is not China. We can’t expect the same results in the West, but lessons can be learned. Naturally, the point is there is more than reviews when it comes to selling online.
Critical to the overall success in anything to do with video commerce is aligning the values of the brand with the content created for the audience.
The research shows that if viewers feel they can relate to the values of the Livestreamer, the connection builds and that’s where the real conversion can come in.
How Do We Measure Authenticity?
This is a very difficult question to answer because it encompasses so many subconscious factors relative to how we build trust with other humans.
In a sense, a lot of livestreaming is giving others a ‘window into your world.’
While social media is highly polished and edited, livestreaming exposes those hosting to errors, embarrassment, and criticism.
Those same vulnerabilities can be used to storify products and services, and build a connection with the audience. This is what live shopping is about.
A New Advertising Mechanism
Many in society are saturated with various forms of advertising across the Internet and social media.
Livestreaming is different in that it is part entertainment, part selling. There is an art to making it natural and subtle, it is supposed to bring the high-touch human factors to the surface.
As the market activity in this space heats up, we will see how brands approach it, how Influencers and Creators are leveraged, and how consumers respond.
In terms of success, most of what we see so far in the American market is brands experimenting across different channels.
As the year progresses, and we move towards more seasonally-strong periods of eCommerce sales, we will likely see these experiments ramp up.
From there, we will start to see the winners and losers in the market. In all likelihood, however, social commerce will no longer be a ‘niche’ in the West, but a rapidly-evolving, high stakes market.