Amazon goes social shopping

Amazon has announced plans to roll out a TikTok-like feed to its e-commerce app, with the aim of attracting new shoppers through influencer photos and videos. Called Inspire, it allows customers to purchase products from a personalised feed of videos and photos via the app.

FACTS

• Amazon's new "Inspire" feature will be available to select users this week in the form of a continuous stream of photos and videos of products that customers can purchase via its app.

• Customer journey:

  • To use the new feature, customers must first open the Amazon Shopping app and tap the "Inspire" icon.

  • They are then prompted to choose different categories such as make-up, pets, running etc. to best personalise their profile and be directed to individualised content.

  • From there, the products are linked to Amazon and users can purchase the items directly from the videos and photos that appear in the feed.

• To make this feature more attractive, the online retail giant has enlisted the help of influencers who will be able to earn money from customer purchases as part of the Amazon Influencer programme.

CHALLENGES

• Adapting to changing usage and competition: The launch of this new feature seems to be part of Amazon's strategy to compete with TikTok. As such, the Seattle-based company is potentially one of the only companies that can play in the same league as the short-form video app as it brings product discovery as well as shopping under one roof. Currently, many Tiktokeurs offer items that are already available on Amazon, so it hopes to capture some of the user engagement.

• Compensating for a drop in consumption: This new feature will give Amazon the opportunity to increase its profits, as the company has forecast sales of between $140 billion and $148 billion in the fourth quarter of 2022, up from $155 billion.

MARKET PERSPECTIVE

• Other companies, including Meta, Google's Alphabet Inc. and Instagram, have launched similar social features in recent years to promote products available through their respective apps, while more than $226 billion was spent on social media advertising last year.

• TikTok, meanwhile, is thinking bigger and looking to expand its business to be more like Amazon. According to online media outlet The Verge, the short-form video app published job postings this fall that suggest the company is working to create its own distribution centres in the US.

Key figures

• 1.2 trillion. That's the projected total amount of global social commerce sales in 2025, according to a study by Accenture. In 2021, global social commerce sales totalled $492 billion.

• According to Forbes, social commerce sales represent 10% of e-commerce sales, but are expected to grow to 17% in the next three years.

• 4.5 billion people are active on social media, while each user spends an average of two and a half hours on preferred platforms, according to Statista.

• TikTok has reached the same number of active users as Instagram in less than 3 years.