The holiday season is just around the corner, which means hordes of deals and long hours of insane shopping. And social media will continue to play a significant role to help retailers encash new sales channels using the latest trends and newest options provided by upcoming networks.
We are all aware of the role played by social media in stimulating ecommerce sales and almost all businesses, small or large, have incorporated social media in their digital marketing strategies. Over the years, social media has moved beyond plastering sponsored ads across our social networks to encourage buying decisions in favor of the paying businesses. This space has changed how marketers approach consumers.
LinkedIn referred to 2014 as “Influencing Brand Opinions
ARF conducted a five-month study in 2013 called Digital & Social Media in the Purchase Decision Process. The organization interviewed 2,000 shoppers and one in every three shoppers agreed that they were introduced to a new brand on social media. They also agreed that this platform often helped change their perception of brands. The constant interaction that consumers have with brands via social media also influences their buying decisions, helping them make a conscious decision of choosing a particular product/brand over others.
Brands can leverage this trend by establishing authentic conversation with consumers, for whom social media is highly personal. Just like ‘people buy from people’ and not from brands, they want to interact with other people and not just with a company or a brand. This is why it is important for retailers to be personable and genuine in their social media conversations. In fact, this is the new customer care service every business should provide.
The Effect of Twitter & Facebook
The data from Chadwick Martin Bailey and iModerate reveals that 79% of Twitter and 60% of Facebook users are “more likely to recommend brands” soon after they start following them or “Like” them. Recommendations from friends, family and people they trust are probably the biggest market influencer.
The interaction between brands and their social community therefore plays a great role in defining the social purchasing pattern. The study also found that 67% of Twitter followers and 51% of Facebook fans prefer buying from brands they follow or like.
Though people aren’t necessarily buying from brands/company they like or follow, there are chances that they will provided brands can use the social space properly to establish genuine and personalized interactions with consumers.
Other Players in the Social Space
Facebook and Twitter aren’t the only space to focus on. There are other players in the social space that are eventually gaining prominence. The likes of visual content-sharing sites like Pinterest, Instagram, YouTube, Vine, Tumblr and Snapchat are proving their potential to influence shopping trends and generate sales and revenues for online retail stores.
Real World Examples
Let’s turn to the fashion industry for two contrasting brands that have “cracked” social media marketing. On one hand, you have Burberry – the iconic 150 year old brand, with 2 million plus followers on Twitter, Facebook and Instagram. They are cited as shining examples in scores of case studies on how brands should do social media.
However, if you thought only the big brands could afford to capitalize on social buying trends, you’re mistaken. OwnOnly, a 2014 launched online retail store for custom tailored suits, is a good example of how new apparel sites should use the social space to engage with their current and potential customers. Instead of just focusing on pushing marketing messages out to consumers, this online retail store is sharing informative, useful and interesting content through four major social channels – Facebook, Twitter, Google+ and Pinterest.
Influencing Buying Patterns
Social media, coupled with the advent and popularity of smart devices, has changed the world of ecommerce. It has added a new dimension to online retail experience. The influence is so massive that a lot of people have ended up buying items online which they probably wouldn’t have in a brick-and-mortar shop.
Mobile Becoming a Tool for Shopping
Ecommerce going mobile is nothing new. Online retailers know that having a responsive site is not enough; it should be optimized for mobile users. Mobile apps are becoming leading players in driving sales. A lot of brands like Amazon, eBay and Uber have had their mobile apps downloaded by the millions and being used like crazy. Statistics show that people spend at least 7 hours a day accessing media devices including 108 minutes spent on mobile. People are making buying decisions on-the-go and are latching onto mobile apps. Not just that, people are using their mobile devices as wallets with the increasing popularity of mobile wallets, which is likely to go mainstream in few years.
Coupons Continue to Lure Buyers
Discount coupons are a great option to attract new and existing customers. Consumers have been using them more often post-recession. Brands are using the social space to offer coupons, while consumers are looking into their social networks for discount coupons before purchasing an item. Some brands have moved beyond just offering coupons via social sites; they are organizing social contests for consumers to participate in to win discounts – a great way to increase customer engagement online. Besides, there are mobile apps for shoppers that automatically send out phone coupons as a shopper walks into a store.
The Growth of Social Commerce
Social media sites have already proved their ability to motivate user purchase decisions. Considering the growing popularity of Facebook Store, it can be predicted that social commerce is likely to be the future of online retailing, even though it is not yet popular due to security and privacy concerns. However, studies indicate many people would like to consider this sales channel to buy products online.
DigitasLBi finds that social commerce sales in the US are expected to reach around $14 billion by 2015. It also reveals that though just 5% of Americans purchased products/services using a social media site, another 20% (which will equate to $56 billion) are likely to consider doing so.
Both Twitter Commerce and Facebook Store will radically transform marketing by changing the role social media was playing until now. The one-click purchase button will change how businesses market and sell their products to consumers. But to leverage this potential of social media, brands need to offer personalized social shopping experiences to answer consumer needs. They need to provide better privacy and security around financial data to make the buying process seamless.
If social media can drive sales, are all social networks created equal? Where should you be focusing your promotional efforts?
This question has a two part answer. Firstly, your choice of social media would depend to a large extent on the preferences of your target audience. It’s simple, you sell popcorn to people at movie theaters, not at beauty salons. Go where your customers are.
However, customers have a tendency to sometimes frequent a large variety of social networks. For most growing brands or early stage startups, it’s practically impossible to maintain an active presence across every single one of these networks. In such case, it helps to narrow down your options from the existing pool of preferred social networks to just those networks that have the best track record of delivering results.
Twitter is the reigning no.1 in terms of percentage share of social revenues, clocking in at 14.5% in August 2014, as against 11.76% and 8.02% share for Facebook and Pinterest respectively according to data from Add Shoppers.
Average Order Value
If maximizing revenue from each order is what you’d rather focus on, then StumbleUpon with an Average Order Value (AOV) of $246 tops the charts, followed by LinkedIn and Twitter at $202 and $185 each. Compare this to the AOV across all social networks in 2013 that stood at $143, and you know that these three social platforms are doing something right.
Another important metric to keep in mind when choosing your social networks is conversion rate. This figure tells you the likelihood of a user referred from a particular social media platform actually buying an item on your site. This tells you which type of traffic deserves special attention when they arrive on your site to help them convert quicker. Facebook offers industry beating conversion rates, leading the pack at 6.89%. Google+ is not far behind with a conversion rate of 4.12%. The third on the list is aeons behind – LinkedIn with a conversion rate just under 1%.
The Beginning of a New Era
It is obvious that social media is transforming the buying decisions of consumers. People are using social media not only to find new brands or to interact with them, but also to listen and learn about the experiences of other users with the brands. Together these factors highly impact global buying trends. For brands and marketers, this is the perfect opportunity to educate consumers using compelling content, create strong customer relationships and improve customer experiences via social care to uphold a strong brand image.
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