Has social media failed e-commerce?
Following the launch of Twitter’s “Buy” button earlier this week, Peter Cassidy, co-founder of Stackla, examines how social media drives potential consumers to retail websites.
The success and rapid adoption of social media made it inevitable that businesses would look to social to drive online sales.
New social platforms came with the promise of unprecedented reach, providing retailers with the means to drive swarms of qualified prospects to their websites.
The truth of course, is that social media didn’t deliver on the promise.
US data company Monetate analysed over 500 million eCommerce sessions and found that only 1.55% of all eCommerce traffic came from social and only 0.71% of that traffic resulted in sales.
People simply don’t hop from their Twitter timeline to your shopping cart.
Don’t shoot the ‘messenger’
The results brands have typically seen are less a symptom of social media’s failings and more a matter of approach.
It’s not new knowledge that buyers regularly seek reviews about products prior to purchase from other customers; few would argue that product mentions by satisfied customers hold more weight than any brand-generated review or advertisement.
A Nielsen study shows that 77% of shoppers say ‘social exposure’ to a product is the most persuasive source of information.
Own your earned media
What are brands doing with the brand mentions and authentic endorsements their customers are posting on social networks? In most cases these ‘money can’t buy’ social validations are lost in the social ether, victims of the brief ‘post halflife’.
Herein lies the problem: brands are not harnessing the power of social recommendations.
If you consider that social media has increased the number of product endorsements available to a brand – be it a post on Facebook, Twitter, Instagram or Pinterest – we start to see social media’s true potential for eCommerce.
Where social media excels is in converting customers at the point of sale. We need to stop thinking about social media as a source of website traffic and rather as a powerful conversion factor at the point of sale.
Social validation has to happen at the point of sale
When someone is shopping at home, alone, perhaps on their iPad on the couch – that is when the authenticity of social content is most powerful.
Fashion retailer Wanted Shoes is an example of how integrating social content at the point of sale can work seamlessly.
Wanted Shoes created a ‘Social Scene page’ that provides users with a whole new way of browsing their products. In effect, it’s like their own Pinterest board where all the content is sourced from photos their customers post on social media while wearing their products. Users can browse the content, find a picture they like and click through to buy the product featured in the picture.
Customers identify with the real people in the photos and that social validation provides the confidence they need to complete a purchase.
Over a period of three months, Wanted Shoes compared conversion rates for customers who shopped via the Social Scene page against those who shopped via the regular cart. What they found was significantly higher conversion rates via the social catalogue.
The Social Scene page was also the ‘stickiest’ page on the website, with the longest dwell times (almost 2 minutes), and a bounce rate of just 5% making it the most engaging page on the website: 95% of customers were clicking from this page to a product that appealed to them.
Retailers are starting to see the light. Brands harnessing social commerce to great effect include Myer with its Spring Summer Fashion Launch, Michael Hill, SABA and Loving Tan.
User Generated Content is better than Brand Generated Content
Brands are producing expensive content for social media that simply doesn’t get seen by their target audience, so why not harness what is already being created by your brand advocates?
With the advent of smartphones featuring superb photography capabilities combined with surging mobile Internet usage – 7.5 million Australians used the internet via their mobile phone in 2013, an increase of 33 per cent compared to June 2012, according to ACMA – the customer voice has never been stronger.
The challenge for brands is to aggregate content from across disparate social networks and bring it to where it has the greatest impact – at the point of sale.
Only when this is done can social media truly deliver on the promise to drive sales.
Peter Cassidy is co-founder of Stackla, a platform that helps companies aggregate and curate social media content around their brands.
Great perspective Pete.
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The title questions an interesting one, because if presupposes that social media actually owes e-commerce something.
I’m sure some social media operators would react to the question “Why have you failed e-commerce” the same way most of us would react to a complete stranger asking us why we upset them by not coming to their party. You’d react by saying “I wasn’t aware I was your friend”.
Do most social media operators see themselves as friends of e-commerce or not? If not while would they change? – Presumably because their failure to improve sales enough would result in advertisers placing their money elsewhere. Except (long term) where else will it go given the way that Gen X and Gen Y have abandoned traditional media? We are in a situation where brands need social media more than social media needs brands (social media still needs the revenue, but they are wearing the pants).
Another challenge is how much power does social media really have on the users, the power of brand advocates is compelling, but how you generate more brand advocates, how do you get them to do something for you….without doing something for them? How willing are brands to engage people to be advocates? How willng are people to be advocates (what’s their price)? How much “advocating” can someone do before they become labelled as a shill and lose their influence? These are tough questions. I’m sure if I had the answers there’d be a bloody good job for me.
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Ads in social media are interruptions. Ads in search results are relevant (well as much as they can be). Until social media knows enough about us to predict our next purchase it generally won’t convert as well as search traffic. Of course there are exceptions.
In regards to social validation at the point of sale, there is also some evidence to show that on a landing page it can actually be a distraction, so it’s not for everyone.
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“Ads in social media are interruptions. Ads in search results are relevant (well as much as they can be). Until social media knows enough about us to predict our next purchase it generally won’t convert as well as search traffic. Of course there are exceptions.
In regards to social validation at the point of sale, there is also some evidence to show that on a landing page it can actually be a distraction, so it’s not for everyone.”
You’re the reason 400 million people use ad block plus.
Learn2Privacy.
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Privacy is not the reason. (maybe if you’re marketing a dating site or an embarassing product)
But let’s get one thing straight, I’m talking about basic personalisation – showing an ad for a product that someone might already like or that they have shown interest in. It’s not revealing anyone’s personal details. There is no “privacy” issue. I don’t really think anyone cares if an ad is more relevant to them.
They care when the ad is unskippable, especially when it is in their news feed or blocking their content.
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Meanwhile Google, of recent, appears to be serving up amazingly relevant ad’s on my android phone, suggestion places to dine nearby and even holidays based on (I am guessing) my search history and locations visited. Worrying? Not really, the ad’s I can dismiss with a flick of my finger and they are not getting in the way of the other relevant sport and news that is being served up to me. It is an interesting landscape. ‘Transactional’ marketing certainly appears to be first and foremost in start up land, followed by traditional / scatter-gun, if building a 900pound gorilla brand.
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