Social Shopping: Can You Believe the Experts? Actually, Who Are the Experts?
If you believe the headlines, social commerce – storefront purchases occurring on a social network – is a failing model. The stories started early in 2012 with some big brands shutting their Facebook stores and ended the year with IBM’s Black Friday report stating Facebook delivered only 0.68 percent of holiday traffic to big e-commerce sites.
Then 2013 began with Payvment, a major player in Facebook commerce, leaving the category entirely and referring its merchants to Ecwid. This led e-commerce expert Sucharita Mulpuru, a vice president and principal analyst at Forrester Research, to state that Payvment’s move was “another nail in the social commerce coffin.”
Pay attention to another portion of Ms. Mulpuru’s comments, however. “What’s ironic is that very small businesses are the few that have some traction on Facebook.” Let’s delve into that comment and take a deeper look at the SMB universe of social commerce as shown by our data. As the most popular store-building app on Facebook, Ecwid is right in the middle of this trend, and the prospects are exciting:
Consider the following results, based on our4th quarter 2012 data:
Holiday period sales from all Ecwid-powered Facebook storefronts grew 65 percent over the previous quarter. That’s on top of a healthy rise from the beginning of 2012.
For merchants with storefronts on both their website and their Facebook page, an average of 10 percent of sales came from Facebook store purchases.
Referral (inbound) links from Facebook to our storefronts (whether on web, Facebook or mobile) which resulted in an actual purchase accounted for as much as 8.5 percent of total sales during the holiday season.
This data tells a different story from the popular “expert” thinking, and it shows that SMBs are succeeding in social commerce. We’re early in the cycle, but here are the core considerations we think need to be acknowledged for social commerce to reach the next level:
Watch the leaders, in this case SMBs
While it’s natural to pay more attention to big brands, SMBs have been more adept at working the social system, especially younger entrepreneurs who grew up with social media. Several of our better-performing merchants tell us they pay as much attention to Facebook member conversations as they do to customers in their physical stores. This level of personal service seems to come more naturally to smaller businesses. They understand that social selling is very different from interacting on e-commerce websites. This has resulted in some amazing success stories, with some of our top merchants securing 30-50 percent of their total online sales on Facebook storefronts.
Understand and track social media influence on purchases
If a social network wasn’t the last click before a sale, that doesn’t mean it didn’t inspire or influence the purchase. IBM’s research did not take into account the impact of social media on downstream visits and conversions. This needs to be tracked more effectively, and some progress is being made: Google Analytics recently rolled out an assisted conversions tool aimed at measuring the roles and monetary contributions of various social channels, although they admit the calculations are imperfect at this time. Facebook continues to push for credit for downstream purchases, though that still won’t measure for sales influenced by member comments, an even more elusive tracking metric.
Use the multi-platform advantage – place stores wherever customers are
If the mobile explosion has taught us anything, it’s that web businesses need to be accessible from any medium. Online retailers are realizing that a website store alone isn’t enough, when their customers are on mobile, Facebook, Pinterest and so on.
Would any merchant discount the value of an incremental 10 percent in sales? Unlikely. We embraced this multi-platform trend early and built our software to support all platforms via a single administrative dashboard. We believe this multi-platform vision will drive the success of social commerce, by giving merchants the flexibility to be wherever their customers wish to shop online.
SMBs are the experts in selling socially, which is analogous to the early days of blogging, which was built by individuals and smaller players, not big corporations. While the SMB success stories aren’t necessarily making headlines just yet, they definitely are developing the fundamental best practices in social commerce.