The Evolving Social E-commerce Landscape
As images and video are consumed across digital channels at ever-increasing rates, the connection between e-commerce and social media will only deepen.
The Evolving Social E-Commerce Landscape
Forget recommendation engines or mobile payments, you can thank social media for the latest burgeoning revolution in e-commerce strategy. As social media usage quickly passes 2 billion users, the path between retailer and consumer has never been shorter. And when e-commerce revenue is expected to jet past $400 billion by 2018, there’s never been a clearer indication that social needs to be at the crux of every e-commerce giant’s near-term plans.Consumers’ social media usage, especially on mobile, only continues to rise — creating obvious opportunities for retailers to insert themselves into the conversation and ease the purchase process wherever their potential customers are. And when the mood hits, as Recode puts it, "People will increasingly want to purchase items online wherever they discover them, even if it's not on a shopping site or app."
ROI on Social Media Platforms Still Needs Determining
The concept of social selling on e-commerce is not necessarily new, in fact, advertising clearly supplied the economic fuel behind early successes on social media. Facebook remains the giant in the e-commerce field, with Facebook ads being as essential as Google Adwords. A large survey by Shopify showed Facebook served as the source of almost two-thirds of Shopify's social media visits, and Facebook's conversion rate of 1.85 percent continues to be the highest of any social media platform. But social pathways continue to be forged: The survey found deemed Reddit the fastest-growing source of Shopify social media orders, with surprise contender Polyvore accounting for the highest average order value.
Social Provides Organic Audience Targeting
Specific social platforms have always catered specifically to distinct user bases,which enables a kind of organic filtering each industry can use in its marketing. That same Shopify survey found that 74 percent of social media buyers in the antique and collectibles market come from Pinterest, whereas YouTube is responsible for almost half of digital products referrals.
The Arrival of "Buy" Buttons Intensifies Social E-Commerce
In June 2015, Pinterest launched direct buying linkage with its "buyable pins." Six months later, there were 60 million buyable pins on the site, and Fortune commented that "the internet has 'buy button' fever." The Fortune article notes that in one case, 84 percent of customers using Pinterest's buyable pins were new to that brand, indicating that direct buttons open up a valuable new market. This fact is not lost on retailers, who are flocking to use the new technology. Initially, buyable pins were available to Shopify and Demandware, among only a handful of retailers. Today, any merchant using software from IBM Commerce, Magento or Bigcommerce can post buyable pins, allowing in a steady climb in new direct retailer integrations.Following Pinterest's example, other social media platforms responded to the rich possibilities offered by direct buying links. Twitter now has a "buy now" button that works with Shopify, Demandware, Stripe Relay and Bigcommerce. This is new terrain, so there have been some settling-in bumps in the road, as Twitter changed its partnership from Stripe to the Stripe product Relay. Instagram has "shop now" buttons and Facebook is also seeing widespread use of its Buy buttons.
New Social Networks Find Their Marketing Niche
The social media e-commerce landscape is not simply limited to the major platform players the terrain is more open than ever to new players, and they're arriving in convincing speed. Practical E-commerce provides a list of 14 networks it encourages merchants to be aware of in 2016. The list includes such newcomers as Peach, Blab, Yubl, Anchor and more. These platforms each offer different applications by which users can connect, including live video-chat, dynamic messaging and audio clips that can be made and shared. They encourage the use of filters, drawings, photos, songs and every possible kind of live chat. And it’s exactly that type of multi-layered social interaction that naturally leads to an opportunity for online, socially driven purchasing.
How Should Your Company Respond to This Trend?
Given the rise of social e-commerce, it's incumbent on every business to re-examine its marketing strategy. 81 percent of shoppers say that "posts from their friends directly influence their purchasing decisions," according to HubSpot, and 30 percent are most likely to respond to a specific product offering when it has been reposted by one of their friends. What does this new trend mean to your company, and how should you respond to this trend? Greater attention is going to be required to provide an omnichannel experience for your customers, which now includes providing peer reviews, product videos and comparison charts, according to review platform Yotpo. You now have the mixed blessing of being able to interact with your customers 24 hours a day, as social media channels eliminate regular scheduled open hours. Your branding strategy must include striking the right emotional tone and being there to have conversations with people online.
A Participatory Ecosystem Emerges
One sales model gaining strength in the era of social media commerce is that of crowd-sourcing your design decisions. Platforms such as Kickstarter have shown the way here, as potential consumers fund the products they want to see. Now established retailers are experimenting with this model, sometimes using the fresh ideas of a platform like Innocentive. Innocentive’s scalable innovation platform, used by corporations like Ford and AstraZeneca, brings "seekers" and "solvers" together to meet new challenges. The potential for this type of global digital collaboration is still in its infancy, and your business may come up with its own creative methods to move the crowd-sourcing frontier still farther forward, but the precedent for disruptive change has certainly been established.Social curation is one interesting form of crowdsourcing: Popular curators don't engage in actual product development, but their choices can have a big influence on sales. Social curation tools like Candid and FourSixty have sprung up to fill that particular niche.These platforms allow you to formalize and streamline your users' product curation, letting companies create shoppable social galleries that can be integrated into an e-commerce platform. Curation is a natural fit for fashion and home product brands, because active curators become enthused about creating collections. These specialized platforms let you dive deeper into the potential of social marketing, using hashtags and analytics to help you collaborate with brand ambassadors. Suddenly, marketing isn't contained within the walls of your company; it's an ongoing experience, a communication stream between you and a shifting population of your fans, customers, curators and overall networked audience.While there are differences in their capabilities, both tools allow you to curate and source content such as photos and videos from your customers. For example, if you see your sunglasses highlighted in an amazing shot, you can quickly request the rights to that image and push it across your digital properties. You can also use your posts on Instagram, Pinterest, etc. as your product collections; this can yield modest savings in the time you take for adding new SKUs to your store, or it can entirely redefine the design and user experience of your site.
New Measures of Your Value
Ratings and reviews are the crucial table stakes in this game for businesses of all sizes, from the largest retailer to app stores and mom-and-pop shops. Likes and tweets have become the social proof of product desirability, even as disappointed consumers began blasting brand feeds with pictures of defective products. As a result, social media has become the first line of defense for your customer service team.
Fashion Steps Forward with "Social Shopping"
As images and video are consumed across digital channels at ever-increasing rates, the connection between e-commerce and social media will only deepen. Steeped in a culture of high-end photography and visual design, fashion brands have been at the forefront in using social for product engagement and sales. These companies have helped set the playing field for making social a part of the purchase cycle, as shoppers reach out to family and friends to talk about their potential purchases. Rent the Runway maximizes its social aspect by enabling customers to share photos of themselves wearing the garments. "Social shopping" has been added to the marketing lexicon, and the phenomenon is gaining strength because it offers the important experience of shopping as a companionable activity.
2016 Holiday Season Will be a Litmus Test
This holiday season, 18 percent of US internet users plan to purchase directly from social media. That's a staggering number, given the relative newness of this social media function, and it may make the 2016 holiday season a litmus test for social e-commerce. It's quite possible that the other 82 percent of users will venture into making some direct purchases themselves, as they are impacted by their friends' online reviews, posts, photos and shared ads. It is now, in the holiday season so critically important to retailers across the country to take advantage of the new channel provided by social, and learn all they can in the protracted and intense shopping period to shape their future plans to address the clearly important piece of the sales puzzle that is social-enabled e-commerce.