While social media may currently be driving only a small percentage of online retail sales, all indications suggest that these channels will continue to expand in the future. In fact, social-driven retail sales and referral traffic are rising at a faster pace than all other forms of eCommerce.
According to the Business Insider Internet Retailer’s Social Media 500 report, the top 500 retailers earned a total of $3.3 billion from social commerce in 2014. That represents a 26% increase from 2013. The overall growth rate for eCommerce in the US, however, only rose by about 16%. Moreover, between the first quarters of 2014 and 2015, social platforms increased the number of eCommerce referrals by almost 200%. Analysts are predicting an even greater surge in social commerce in 2016.
As I mentioned in my previous post, a number of major social networks including, Facebook, Pinterest, Instagram, Twitter and YouTube, have all recently introduced “buy” or “shop now” buttons to their platforms. The goal behind this move has been to significantly simplify and streamline the purchasing process from these networks.
Aside from direct commerce, social networks are also being used to engage consumers in the beginning stages of the purchasing process. In this case, strategies are designed to bring highly targeted traffic from social media to retailers’ websites and mobile apps.
In this eCommerce landscape, here are five of the most significant social commerce trends to watch out for in 2016:
1. Increased spending in mobile advertising. Now that the biggest social networks have all jumped into the mobile commerce fray, and the media has been generating plenty of hype around it, we can expect more businesses to pump money and other resources into their social commerce efforts. Jumping in feet first is not necessarily a good thing, though. If you are running a small business with limited marketing dollars, then it definitely pays to research the most effective platforms and strategies before committing to any one promotion.
2. More integration between online and off-line, in-store experience. Perhaps one of the coolest things about social commerce, is that it allows retailers to merge the online and off-line shopping experience. Some examples of this in action include:
- Offering product-specific, in-store discounts to customers while they are standing in the store and researching these products via their mobile phones.
- Allowing customers to create a “favorite product” list of items they may want to purchase in the future
- Offering customers recommendations for products that compliment what they are purchasing
3. Re-aligning the business around omni-channel experiences. This is not just about revamping marketing, but restructuring the business to have the flexibility to respond to changes in consumer behavior and preferences. This means a few things. First, you may have to re-organize your operational teams internally to maximize your business’ ability to recognize and respond to customer buying habits. Then, you should take advantage of the fact that people are often researching products on their mobile devices before they come into a store. This means your mobile and social presence are essentially the digital entrances to your physical store.
4. Greater reliance on local targeting. Social and mobile commerce often revolves around instant, real-time impressions and decisions. You want to make sure your business and its products are properly positioned at the time when your potential customers need them the most. So, locally-based mobile searches for the products you carry, for example, could trigger a targeted ad offering a promotion on those products.
5. Making intimate, data driven decisions. While big data has been a buzz word for some time now, the goal for business owners is to understand in a more “intimate” way what makes their customers tick. How do customers make decisions, where are they going for answers, and what are they feeling as they are doing it? As consumer attention is increasingly drawn to mobile devices and social media platforms, the vast amounts of audience data and information available can be used to give businesses a leg up on their competitors.
In short, social commerce, like mobile commerce, is set for explosive growth over the next few years, and businesses need to make sure that they are ready for it. Their customers already are.