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. Now, many brands are attempting to take it a step further by utilizing the connections made via social networks to drive overall sales based on those decisions. This brings us to 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 Forrester, 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 retail site. Etsy, Amazon Marketplace and Kickstarter are also all successful examples of platforms brands are using to connect with consumers in a social space that also drives 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.”
Leveraging social commerce the right way
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 $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 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 rich 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.
We often preach about having an Omni-channel presence across multiple platforms in order to maximize consumer engagement. Now, that multiple channel presence is becoming even more imperative as young adults are beginning to 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 ecommerce giants like Amazon battling it out with social platforms to win millennial dollars.