Why You Should Pay Attention to Contextual Commerce: Part 1

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Some retailers put physical store first and online store second. Then, they view social media as supporting structure. Sometimes, they even treat the two channels differently, as they view consumers who come to the store have different needs from those who buy online. In fact, many successful retailers combine the power of digital and physical existence. They treat the two channels as having the same importance. In this case, contextual commerce becomes more important. What is it? Why does it matter?

Contextual Commerce: Definition

Contextual commerce means allowing the consumers to make a purchase in any context. It means that the retailers should be able to think beyond the boundaries of traditional commerce. Many believe that it is the future of retailer industry. Why? Here are the reasons:

  • Firstly, contextual commerce drives new opportunities to target more consumers. As they can make a purchase anywhere, they are more likely to finish the transaction to the payment step.
  • Secondly, it leads to incremental transactions. When the first transaction is successful, the customers are more likely to make repeated transactions despite different channels.

contextual commerce

Of course, the two are connected each other. Only when the first is achieved do the retailers achieve the second. Contextual commerce provides retailers with new opportunities to capture potential customers. Meanwhile, contextual commerce offers the social media users with new, much easier shopping experience. Seamless transaction is the key reason for the consumers to make more transactions. The fewer steps they need to complete a purchase, the more chances they will complete the transaction.

Contextual Commerce and Social Media Uses

Of course, social media is the key part of contextual commerce. The social media users are potential consumers. Imagine the following two cases:

  • Case 1: You are using Instagram and seeing a cute dress advertised on the channel. Then, you should visit the advertiser to see the product and buy it. It means that you should exit the social media channel. Perhaps, this can change your mind and postpone the intention to purchase the dress.
  • Case 2: You are using Instagram and seeing a cute dress advertised on the channel. Then, you can buy product directly on IG and checkout the order right away.

You certainly will choose Case 2, right? The good news is that in March this year, Instagram announced its project to allow the users to purchase items in their feed. It is piloting the project with 20 popular brands like Burberry, Adidas, Nike, Prada and some other clothing brands. It is setting up a plan to add more brands in the next few months.

There are cases in which the consumers are willing to buy something when they are browsing anywhere. The retailers need to get in line with the game. This is contextual commerce. It may come in some concepts. They include “buy” buttons on social media networks. As what Instagram is doing, the next feature may be “check-out” button, which allows the social media users make a purchase without exiting the channel. Other retailers are figuring out the ways to allow the customers buy products anywhere.

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