Who Will Champion Social Commerce?
- by Jeff Fromm
Social media has completely taken over the digital space. Brands across the board are using social platforms to connect, interact and engage with consumers all over the world. In our last article, “Branding to Earn Millennials’ Trust,” we discussed how brands are utilizing social media to be a part of the millennial decision-making process. Now, many brands are even attempting to take it a step further by utilizing the connections made via social networks to increase sales.
This raises the question. What is the sweet spot between social media and social commerce?
While e-commerce and social commerce can be easily confused, the difference is that e-commerce sites are designed specifically for sales while the primary function of social pages is still sharing and connecting with others. However, many brands have followed the logical next step to activate the customers already engaged with branded social profiles to make a purchase directly from those platforms.
According to brand consultants Forrester Research Inc., social marketers will pump $9.7 billion into social channels this year. The trick will be to use those social dollars in a strategic way that not only engages consumers but also drives sales through owned social platforms. According to the Internet Retailer’s Social Media 500, the nation’s top 500 retailers earned 60 percent more in 2013 than they did in 2012 from social shopping. In fact, social commerce sales grew at three times the rate of e-commerce last year.
These numbers should only grow considering that two of the largest social media sites, Twitter and Facebook, are testing a “buy button” to allow users to make purchases directly on the brand page instead of being redirected to a retailer’s site. Etsy, Amazon Marketplace and Kickstarter are all successful examples of platforms on which brands are connecting with consumers in a social space that also leads to direct sales.
Instagram is also exploring the social shopping space despite not having a “buy button.” Instead, it has joined forces with ShopStyle.It, and LIKEtoKnow.it, platforms that enable consumers to purchase products on Instagram through a third party. Both sites allow users to “like” a photo on Instagram and receive emails with direct links for buying those products. Unlike the buy buttons on Facebook and Twitter, Instagram’s experience is technically not one-click shopping, and users have to opt in before receiving the links. However, it’s still an easy way for consumers to buy what they “like.”
So … who will win social commerce?
Facebook is winning the social commerce race so far, according to AddShoppers, which said that on Twitter, a share or “retweet” is worth only 85 cents while a Facebook “share” translates to an average of $3.58 in revenue from sales. The race is only beginning, however, and other social sites are gaining momentum.
Polyvore, a social commerce site that connects fashion retailers to consumers, is ahead when it comes to average order value (AOV). The site boasts $66.75 in AOV from social platform referrals, while Pinterest is a close second, according to Shopify. Pinterest also drives more social sharing of retail content than any other network, including Facebook. The company reported last year that two-thirds of its content comes from brands using the site to push products out to their fans. Pinterest is not currently testing a buy button, but its pin feature lends itself to shopping by displaying pricing and availability. Pinners may also opt-in for emails alerting them when the prices of their pinned products drop.
Social shopping via his smartphone is something 36-year-old Ricky Catto does when he has time. In an interview with us, he explained that the convenience of being able to shop from his phone was the biggest driver of social shopping.
“Pinterest often links to Etsy or other stores, and I’ve bought stuff on impulse doing something mundane, like waiting at the doctor,” said Catto. “I’d love to be able to just click on a buy button, especially if the platform already had my shipping and payment information. It would be great.”
We often preach about having an omnichannel presence across multiple platforms to maximize consumer engagement. Now that presence is becoming even more imperative as young adults buy products directly from those channels. Although most brands don’t really understand how exactly to use social media to increase sales, they know it’s important enough to keep trying to get it right.
Social commerce is still in its infancy, but at the rate it is going we will quickly see e-commerce giants like Amazon battling it out with social platforms to win millennial dollars.
Editor’s note: Cherryh Butler, managing editor for food and retail publications with Net World Media Group, contributed to this post.