According to Kieran Taylor, a high tech marketing professional in New York City, social commerce is on the rise. Social commerce, known as ‘s-ecommerce’ is a new online retail model that incorporates established social networks combined with peer-to-peer communication to drive sales.
Some brands are skeptical about how social media can bring in revenue. The data reveals social commerce is expected to bring in $30 billion each year by 2015. Half of web sales will occur through Social Media, which will account for 5 percent of the total U.S. e-commerce market. According to Kieran Taylor, “74% of consumers rely on social networks to guide their purchase.”
The question is how? While Facebook banner ads and sponsored tweets are popular, the newly immersive, integrative world of social commerce goes beyond mere advertisements. How can businesses better leverage the power of social media as they seek to turn their followers into paying customers?
Kieran Taylor: Social Commerce 101
Kieran Taylor notes, “The rise of social commerce is connected with the rise of social media itself. Overall usage on social media platforms continues to explode, to set new records and reach new milestones.” Listed below are recent stats for social media posted by Factbrowser:
● Facebook drives 60% of all social shopping traffic
● 39% of fans of brands on Facebook use social media to research products
● 33% of consumers have acted on a promotion on a brand’s social media pages
● 25% of social shopping sessions occur on Pinterest
● Globally, 46% of people who are online use social media to help make purchase decisions
Every minute of the day, 100,000 tweets are sent, 684,478 pieces of content are shared on Facebook and 3,600 photos are published on Instagram. It comes as no great surprise that this has won the attention of retailers and brands.
ROI in Social Commerce
This has always been one of the major problems with social media—not only in terms of its use in commerce, but even its use for business development and for marketing. Social media is doubtless effective, but its efficacy can sometimes seem hard to track or to measure. When it comes to e-commerce, companies obviously want to see the link between user activity and buying customers.
The Business Insider report offers some insights. It delivers some compelling data on why Pinterest is the leader of the pack in terms of social commerce, and why Facebook is the next serious contender.
One in three businesses have a presence on Facebook and 89% of agencies use the social network to advertise for their business clients.
More importantly, the article lists some trends that are currently conspiring to make social commerce the next big thing—something businesses cannot afford to ignore.
- Mobile Internet use is on the rise. More than half of Americans own smartphones. Because mobile use is increasing, shoppers can easily compare prices on different products, consult with the inventories at different retailers, and even solicit advice from fellow shoppers. Mobile accounts for around 40 percent of all social media use; Facebook is over 50 percent, and Pinterest is not far behind.
- “Also important,” says Kieran Taylor, “is the rise of the visual Web.” Image-centric sites such as Tumblr, Instagram, Pinterest, are gaining users daily. Additionally, they are being used for a wide range of applications—online shopping ideas, wish lists, home improvement ideas, and fashion tips. As people look to sites like Pinterest for buying ideas it only makes sense that retailers have a presence on these sites.
- Demographic shifts are also important to note. Kieran Taylor points out that today’s mobile-savvy consumers, especially those in their teens and twenties, are simply used to shopping online. They also see their mobile devices are primary vehicles for accessing the Internet. The users who are flocking to sites like Pinterest tend to be younger, often female, and with a fair amount of disposable income. This is the demographics that retailers are looking for.
Challenges to the Social Commerce Model
Social commerce offers many advantages to businesses and brands. 81% of consumers receive advice from friends and families before they purchase online through social networking sites. The shift from e-commerce to s-ecommerce is in its infancy. Revenues will continue to climb as more and more consumers spend time on the social networks. Brands are beginning to make the connection by targeting consumers on Facebook in the news feed. Advances in technology, such as mobile geo-location, shopping apps, and enterprise marketing tools are all driving factors for the continued growth.
The intent to buy is a fragile thing, and it can suddenly evaporate. Social commerce has the potential to make that happen, but it also has the capacity to truly nurture that intent to buy. The possibilities for marketers are endless, given the technical advances that allow for data mining and big data analysis. Kieran Taylor, a pioneer in the emerging market for social commerce solutions, believes more and more retailers are starting to master the complexities of consumers who make their buying decision on the social media networks.