Overall usage on social media platforms is exploding. Millions and millions of consumers are expressing ‘likes’ on Facebook, tweeting about products on Twitter, and pinning on Pinterest every single day.
Retailers and brands are therefore increasingly focusing their attention on social commerce.
But, many struggle with the question: “How do you convert a ‘like,’ a ‘tweet,’ or ‘pin’ into a sale or a higher UV count?”
In a new report from BI Intelligence, we look at successful examples of businesses and business models for generating commerce via social media-based strategies, analyse Pinterest’s success as a social commerce platform, look at Facebook’s potential as a social commerce contender, and examine the e-commerce conversion and order value gap.
Here are the top three trends that promise to transform social media into a viable commerce platform:
- The rise of mobile: The rise of mobile, which means shoppers can price-compare and solicit advice from friends wherever they are. Overall, mobile accounts for just under 40% of time spent on social media. Facebook has passed the 50% mobile usage mark and Pinterest is at 48%. Together, they combine for over 56% of social generated e-commerce. Given the continued growth of mobile devices, it will only rise. The rise of the visual Web: Sites like Tumblr, Pinterest, Instagram, and Wanelo are becoming repositories for shopping ideas, fashion tips, and wish lists — in essence user-generated catalogues. For example, in a recent survey by Zmags (a mobile catalogue company), 63% of online shoppers said they plan to use online catalogues. And 35% said they plan to use Pinterest to make purchases.
- Demographics: Today’s mobile-savvy consumers are accustomed to shopping online and tend to see their smartphones and tablets as their main computing device, and an important shopping tool. Pinterest’s average user is between the ages of 30 and 49, which is an age bracket with considerable disposable income. Also, Pinterest users tend to be women (anywhere from 80 to 85% of its user base is female). Marketers know that it is women who usually control the purse strings for household purchases.
- Significant challenges remain: Social commerce — whatever the model — needs to better reflect the fundamental rule of e-commerce, which Amazon has always championed: Consumers will click to buy when it’s relatively effortless. Currently, social commerce strategies involve too many intermediate steps before a user ends up in front of the crucial “buy” button.
So what is the take from this. We are not at the point yet where someone is going to buy a house or rent an apt by hitting a buy button on the smart device. But we are well past the point where people looking for homes and apartments look or shop for their next home online. The idea that if they like the layout, ease of use of a mobile website or a mobile app, they would ‘like it’ is also here. If my friends likes something then when I need to look for/shop for my next home I will first look where they looked and ‘liked it.’ It is an easy concept, why more portals are not doing this relatively free marketing is beyond me.