How Social Media Is Bolstering an Online Spending Boom for Retailers in Canada [Analysis]

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We’re in the midst of a two-to-three year period in human history that has no doubt already been marked indelibly by the pandemic and its impacts. In future, textbooks within the halls of academia will denote these years with an asterisk as a time unlike most others when our traditional ways of doing things were usurped by a new normal and when uncertainty was the only absolute. For the retail industry, by and large, these years will be remembered for the turbulence and disruption caused by a global virus that forced an overturn of the industry’s status quo. However, increasingly, it seems that the early twenties may also be noted in the years and decades to come as a moment of pivot and shift that ushered in the true age of digitization.

Represented most predominantly by the abrupt and intense escalation of online spending by Canadian consumers and the simultaneous escalation of retailer e-commerce efforts, the past twelve or so months have yielded significantly altered shopping behaviour and preferences that have resulted in a revised retail landscape. And, as many pundits within and around the industry ponder whether or not these alterations will be sustained through to a post-pandemic world, their significance continues to grow, opening up new opportunities for retailers to expand their services in order to deliver and support the choice and options that today’s digital consumer is seeking. One of those opportunities for expansion is in the leveraging of social media as an influential and potentially powerful tool for commerce. It’s an area of growth that’s recognized by David Nagy, Co-Founder of eCommerce Canada, but one that he says is simply reflective of the progression of e-commerce and the continued development of retailers’ omnichannel strategies.

“Traditionally, social media has been an incredibly effective platform to build awareness for brands,” he says. “It’s most typically been used to reach and intercept users to make them aware of something that they may not have ever heard of before. It has for years now served a very important function in helping to fill the marketing funnel. However, this is a function that’s slowly been changing over the past few years. We’ve experienced the recent evolution of commerce in social media with more and more retailers employing a click-to-buy philosophy and the increasing inheritance and use of product data feeds to make product shoppable on social media. Social channels are becoming more attune to the data that they possess and the power and potential of that data. And, as people become more comfortable using these channels, and a trust is developed in them, it stands to reason that they’ll also become more comfortable with direct conversions through social media.”

Rise of Social Commerce

According to, the global social commerce market is projected to grow in excess of $762 billion by 2027, an increase of nearly 700 percent from it’s currently estimated $113 billion. And, it’s no wonder given the popularity of social media networks and the ever-expanding activity among their users. A report published by the Ryerson Social Media Lab in July of last year titled The State of Social Media in Canada 2020 indicates overwhelming use by Canadians, suggesting that 94 percent of adults in the country are active on at least one social media account. PayPal Canada revealed similar findings in its inaugural Social Commerce Trend Study. Conducted and released pre-pandemic, the study reflects the growing movement, stating that an estimated 47 percent of social media users in the country had already completed purchases via the various platforms, spending an average of $924 via social channels each year.

As a result of this undeniable activity, according to Canada Post’s 2020 Canadian E-Commerce Report, retailers in the country are responding. The report shows that 55 percent of retailers with e-commerce capabilities are actively selling product through the channel, with the majority leveraging Facebook (95%) to do so, followed by Instagram (69%), Twitter (14%), Pinterest (11%) and Snapchat (3%). The combination of these statistics goes a long way toward highlighting the momentum the trend is gaining. And, according to Nagy, the results of increased adoption of social media by retailers as a channel of commerce are likely inevitable, broadening the opportunities available to merchants online and the e-commerce ecosystem as a whole.

“E-commerce continues to become infinitely more complex than it once was,” he explains. “What’s so interesting about it is the diversity of the channel. Retailers are beginning to recognize that e-commerce is not just the checkout on their store. It’s not simply their deployment of Shopify or Magento or LemonStand. Today, it is any and all channels where revenue can be generated. So, e-commerce now becomes that checkout on Instagram, the product data feed that’s going to Google Shopping and activity on Amazon. Most good businesses today, if they have the opportunity, are promoting and selling product through their customer’s channel of choice. And at the moment, that could be five, six or even seven selling channels. Selling online is quite complex from that perspective, and I believe that social media is here to grab a larger piece of that pie. My expectation is that the platforms will continue to evolve and drive more sales, resulting in a larger percentage of overall retail revenue generated through the social channels.”

Accelerating the Trend

The rise in social commerce has been represented by a slow and somewhat steady curve in recent years. However, impacts of the COVID-19 global pandemic have resulted in a spike in activity, serving to accelerate consumer recognition of the channel and retailers’ leveraging of it. Driven primarily by lockdowns and social distancing protocols across the country and world, social media platforms have over the past number of months helped retailers everywhere bolster their e-commerce initiatives and offering and compensate significantly for the lack of physical retail footfall and decrease in overall revenue. In short, social media has quickly become an extremely viable channel for retail growth. And, according to Garrick Tiplady, VP & Country Director, Facebook & Instagram Canada, the need for retailers to intensify their online efforts has never been greater.

“There is and should be a strong correlation between retail businesses and social media tools,” he asserts. “People are spending more and more time online, so businesses need to be online, too. This was true before the COVID-19 pandemic, but it’s become even more important now. We’ve jumped forward by a decade. People all over the world are shopping online more than ever. And it seems as though this rapid rate of e-commerce adoption will likely be sustained even after the pandemic. Now, every business needs to be an e-commerce business. With the right tools, adopting a digital-first approach can open up a world of opportunity.”

Facebook Shop

To help retailers realize the opportunities available to them, Facebook recently launched Facebook Shop — a new tab on the Facebook app for daily shopping inspiration from sellers with shops on the platform, providing every merchant, from global brands to small independent businesses, the ability to set up a virtual storefront for free. The Shop browse feed helps surface multiple products, content and shops from a multitude of merchants. And, through its Commerce Manager, businesses can curate their own collections of featured products, allowing Facebook and Instagram users to discover their wares within a new, more engaging experience.

“We want to make shopping seamless and empower anyone, from a small business owner to a global company, to use our apps to connect with customers and establish their brand,” says Tiplady. “With Facebook Shop, for example, we’ve accelerated our work in commerce to build new solutions given the challenges businesses of all sizes are facing with the pandemic. We launched Facebook Shops to make it easy to set up a single online store for customers to access on Facebook and Instagram. It’s free and simple to create a Facebook Shop. Businesses choose the products they want to feature from their catalogue and brand the shop with customized colours and fonts. Shop makes it easier for businesses to set up their storefront to sell things online and creates a seamless experience from discovery to purchase, across Facebook and Instagram, and even through incorporating Messenger and WhatsApp. Many of our existing and new commerce products will now be part of Facebook Shop to help with the discovery, consideration, and purchase experience.”

Tiplady says that the speed at which retailers adapted their offering over the past year to move more of their product and services online was impressive, citing numerous examples of Canadian businesses that have started to sell, to great effect, through Facebook’s social media platforms. Bollywood Body, a Brampton-based semi-private gym, pivoted to offer virtual workouts to their online community and expanded their reach by providing online coaching to their clients globally. Vancouver-based and Indigenous-owned, Sisters Sage, relied heavily on in-person sales prior to the pandemic to sell their hand-crafted wellness products. Shifting their business online through the development of an online storefront and utilizing personalized ads to target new customers, its sales increased by more than two-and-a-half times. Based on examples like these, there seems to be little doubt as to the size of the commerce pie that social media is carving out. And its growth is rooted to a consumer shopping trend that’s only now beginning to burgeon.

Putting a Pin in it

In addition, Pinterest, one of the fastest growing social media platforms, is also concentrating much of its focus toward consistently enhancing and improving its commerce offering and capabilities and the experience for retailers and consumers alike. The site, which gained an additional 100 million users in 2020, now boasts more than 450 million monthly active users. And, according to ComScore, 13 million of those monthly visitors are Canadians. The platform allows retailers to create Product Pins that are enriched with metadata and formatted to let people on Pinterest know that they’re shoppable, providing pricing info, availability, product title and description, enabling merchants to effectively get their products in front of people who are already looking for ideas and things to buy. And, according to Dan Lurie, Head of Growth and Shopping Product at Pinterest, the social media platform continuously strives to create a unique experience for users in order to elevate brands and the products they sell.

“We are living through unprecedented times,” he exclaims. “Retailers have experienced a lot of change in their businesses over the course of the past year. As a result, e-commerce has become more important than ever to their omnichannel strategies. It’s a critical part of the reason why Pinterest is working hard to replicate the offline shopping experience for our online users. Some of the most significant pieces of the customer journey are found within moments of inspiration. Right now, online shopping seems very transactional. We want to help retailers create those same moments of inspiration on our platform, providing them with the opportunity to increase their exposure and interest in their products and services.”

Considering those moments of inspiration, more than 4.5 million ideas in the form of Pins are saved on Pinterest every day by Canadian users. And, through its unique combined use of machine learning and computer vision, the platform supports those inspirations and the shopping experience for its users while providing retailers with the opportunity to capture their attention through organic search as well as prominently placed advertisements. In addition, the social platform is also busy innovating, developing tools like its augmented reality technology which allows users to try on makeup through its app, as well as others that are currently in development, in order to enhance Shoppable Pins even further. The innovations are impressive and, as Lurie points out, are all part of Pinterest’s intention to continue developing and improving its commerce experience.

“People are generally coming to Pinterest with the same or similar mindset,” he explains. “They’re visiting to be inspired or to help inspire. And, they aren’t often visiting with branded intentions. In fact, 97 percent of searches on Pinterest are unbranded, providing incredible opportunities for businesses to acquire customers that they didn’t currently have. To help support their social commerce efforts, we have a set of features that make it really easy to set up shop on Pinterest. We recently launched our integration with Shopify, a new merchant storefront to help merchants create their social commerce presence, as well as a number of tools to help scale sales. It’s becoming increasingly imperative for retailers to make sure that their omnichannel offering is as robust as their customer’s preferences. And Pinterest’s goal is to provide a seamless way for them to incorporate social media into their e-commerce strategies.”

Another Omnichannel Option

The growth of social media over the past twelve months as a channel of commerce for retailers has been remarkable. And, although it may not reach the loftiness of predictions and projections, it seems likely at some point to transcend its traditional role as the builder of awareness at the top of the retail marketing funnel to serve a greater purpose with respect to the generation of revenue and growth. It’s also serving to an extent to shorten the online customer journey in some cases and could potentially aid in increasing notoriously low e-commerce conversion rates. In some ways, it seems as though the true value of social commerce has yet to be tapped, presenting multitudes of opportunities for brands to realize going forward. However, when it comes to the social commerce payoff for retailers and the effectiveness of their efforts, E-commerce Canada’s Nagy suggests that it will be about aligning perspectives with that of the Canadian consumer.

“Industry types come up with nomenclature for everything in order to differentiate them from one another. Digital. E-commerce. Social media. They try to parcel and package in order to design customer journeys and experiences around all of these things. And the customer is unaware of any of it. They’re agnostic to it and really couldn’t care any less. They have a need, a point of pain, a desire. And they hope to have those things fulfilled. The process of discovery can come in a lot of different ways. And depending on the day, the conversion can also come in a lot of different ways. Consumers can choose to order online from their favourite local retailer. Or, they can hop on their bike or get in their car and pick it up. So, what it comes down to for retailers is the fact that they are obligated to provide their customers with as much choice as possible in order to service them wherever they are. Social media is increasingly becoming one of those destinations for consumers, and could start to provide a more substantial stream of revenue and growth for retailers going forward. As a result, merchants will need to be active on those platforms, combining that activity with strong content and messaging to realize the full potential of the channel.”

Article Author

Sean Tarry
Sean Tarry
Sean Tarry is an experienced writer who leverages his unique storytelling abilities to bring retail industry news and analysis to life. With 25 years of learning, including over a decade as Editor-In-Chief of Canadian Retailer magazine, he’s equipped with a deep understanding of the unique world of retail and the issues, trends, and innovators that continue to influence its evolution and shape its landscape.

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