Social media has evolved beyond simply being a means of communication for businesses and consumers. Indeed, in the last few years, social media has helped to usher in completely new models of consumer engagement, entertainment, and digital commerce.
By integrating fast-evolving technologies and placing a more central focus on mobile platforms, social media is now poised to see a new wave of transformation – one that will lead to the wider adoption of nascent technologies and more consumer-led innovation. As artificial intelligence (AI), virtual reality (VR), digital payments, and blockchain make headlines, let us take a look into how these technologies are set to reshape social media platforms.
AI to enable humanised interaction and hyper-personalisation
With a wide range of applications, AI has already empowered social media platforms on numerous fronts. From generating content and updates to personalised marketing and offering product recommendations, AI is enabling brands and retailers to achieve targeted outreach, optimise engagement and enhance their impact.
32% of industry professionals state artificial intelligence will have the greatest impact on improving customer engagements in the next 12 months
Source: Euromonitor International Voice of the Industry: Digital Survey, fielded in November-December 2022
The latest development in AI, next-gen chatbots simulating human-like conversations, will enable a greater level of customer engagement and customer support. Open-source AI technologies such as DALL-E 2 can enable hyper-personalisation, with AI-generated graphics giving consumers the ability to design personalised products. For example, Stitch Fix, an online personal styling service, has experimented with DALL-E 2 to visualise products based on characteristics such as colour, fabric, and style. Based on customer input, DALL-E 2 generates images that can then be used by a stylist to match similar products in Stitch Fix’s inventory. Brands have the unique opportunity to use these applications on social media platforms to engage with consumers and understand consumer needs and desires.
AR and VR to lead the transition from digital to virtual experiences
Social media platforms have been at the forefront of adopting augmented reality (AR) through filters and lenses to enhance user engagement. This integration has led to their wider adoption of AR technology among millennial and Generation Z consumers. Building on this trend, brands have developed novel uses for AR technology, such as offering virtual try-on functionality.
AR/VR will have one of the greatest impacts on brand engagement in the next 12 months. It will also lead to the creation of virtual experiences and showrooms over the medium-term horizon
Source: Euromonitor International Voice of the Industry: Digital Survey, fielded in November-December 2022
In the next phase of this process, VR is expected to help upgrade these digital experiences to fully virtual ones. For example, Facebook 360 and Horizon Worlds offer virtual social networking spaces for real-time user interactions. Ranging from VR content on YouTube to social engagements in VR to visiting virtual stores, brands can find new ways of interacting with consumers, though finding an application that aligns well with an individual brand’s strategy remains key.
Digital wallets and tokenisation will allow social media to emerge as the next frontier of commerce
During 2022, over USD225 billion of e-commerce (goods and services) sales were conducted via social media platforms globally. The figure has doubled since 2020. With social commerce gaining ground in the digital commerce landscape, more social media platforms are expected to integrate payment solutions. Facebook Pay and WeChat Pay have exemplified how payment integration can enhance commerce opportunities for social media platforms. While this will redefine business models for brands and retailers on social media, it will open opportunities for ecosystem partnerships, as more e-commerce players integrate social media into their omnichannel operations.
With more commerce transactions being conducted through social media platforms, these platforms have the potential to become the next superapps. Tokenisation and new forms of payment will also lead them to be the powerhouses of highly engaged gaming-driven commerce.
Web 3.0 to lead the shift towards decentralised social media, offering data privacy and content ownership
From allowing for the digital ownership of content created on social media to enabling the creation of personalised avatars and immersive engagements in the metaverse, Web 3.0 technology holds disruptive potential for commerce and engagement through decentralised social media platforms.
The metaverse is currently the most explored aspect of Web 3.0 across social media. 38% of industry professionals consider the metaverse to be the most promising Web 3.0 application, while over 29% consider decentralised apps to be the next promising application of this technology. Meta and Reddit, for example, are both testing various ways of bridging the metaverse to their platforms.
With their vast number of users, social media platforms such as these stand at the forefront of the mass adoption of many Web 3.0 technologies. For brands and retailers, this will translate into developing new forms of engagement, selling digital products, creating NFTs for digital avatars, and enabling virtual experiences that integrate the physical and the digital, fostering greater levels of immersion – and monetisation – than ever before.
The upshot of all of this is that technology is shifting more power to consumers, who will now have more control over their data and content online. In some ways, this shift will benefit brands and companies too, as they will be able to garner more – and better – insights into their customers than ever before. Prioritising consumer privacy in the online realm would be a savvy way for many of these brands to gain not only consumers’ trust, but also a greater share of their spending.
The intersection of disruptive technologies and social media, routing more power to consumers, is set to make social media platforms pivotal frontiers in the next stage of the evolution of commerce. To learn more about how social media is transforming the digital commerce landscape, explore our report Digital Disruptors: The Global Competitive Landscape of Social Media.
