The size of a social network often determines its usefulness as a marketing tool. The fact that Facebook is still used by more than 70 percent of US adult and that Pinterest became the fastest growing network after a few years of existence, it was only natural that marketers would use the platform for advertising and marketing. However, social media is more than just a place for ads. More important than the size of a social network is how the users engage with brands follow on that network. Recent research has shown that social media excels in producing meaningful engagement and product discovery. This post will examine some of the new studies that show the growing value of social commerce for retailers in 2014.
8thBridge recently released its third annual Social Commerce IQ report, which analyzed the social commerce strategies of 872 retailers for the second half of 2013. The report followed the company’s engagement on seven social platforms including: Facebook, YouTube, Twitter, Instagram, Pinterest, Google+, and Vine. Four areas were taken into account when calculating the SCIQ scores: brand awareness on social networks, social upstream traffic, website social lift, and Social CRM. The report noted that the most intelligent companies (the ones with the hights SCIQs) were combining social media and ecommerce in new ways.
“Social Commerce has rapidly changed from ecommerce transactions on social networks to focus on empowering people to discover new product ideas from each other while they shop with the brands they love,” said Wade Gerten, CEO of 8thBridge, Inc. “The launching of social discovery and curation solutions this year by some of the world’s largest retailers, Toys”R”Us, eBay, Walmart, Target, and Amazon, is a strong indication that on-site social discovery has gone mainstream.”
Social sharing options on retail ecommerce sites are a key featuring driving product discovery. Adding a “Pin It” or “Like It” button to ecommerce sites greatly increases the web traffic to those pages. Pinterest’s popularity with marketers is growing because it allows consumers to discover new products from brands they like or their from the people they follow. During the time period examined, more retailers used the Pinterest Pin (62 percent) than Facebook’s equivalent ‘Like’ (59 percent). However, according to the report, “even though the Facebook Like button is less prevalent on the product page than the Pinterest Pin It button and Tweet button, customers are sharing products more often on Facebook than on Pinterest or Twitter.”
It is likely that Pinterest will continue to grow in importance as more retailers decide to focus on the image-friendly Pinterest that can also brings in more money per customer on average. According to data from IBM, on Christmas Day 2013, shoppers referred to retailers by Pinterest spent $109.93 per customer on average compared to $60.48 from the average consumers following a trail from Facebook. On the other hand, in total, Facebook made produced more sales due to the volume of traffic and the fact that they converted visits into sales 3.5 times more often than Pinterest.
More than half of the companies in the 8thBridge study indicated that they planned to redesign their websites in the coming year to improve social commerce. Whenever they planned on doing it, 86 percent of the companies said they would include social sharing options in any future site redesigns. Similarly, by the end of 2014, more than half of the companies will be using social logins that make it easier for the consumer to log into the ecommerce site and to share content they find with their friends.
The researchers concluded that, “the results show that the most effective social media marketers are not only present on the social networks and drive customer engagement, but they also have great website social experiences that incorporate customer curation (or collections), crowd-sourced discovery and social rewards.”
It’s important for business owners and marketers to move beyond old ways of thinking when deciding how to use social media for marketing. Businesses that simply use social networks as platforms to post marketing slogans are missing out the massive opportunity that a highly interactive and heavily connected social network present. As the data from 8thBridge and the IBM Christmas Day analysis show, there is a lot of money out there for marketers and entrepreneurs that figure out how to make social commerce work for their business.