After numerous false starts... are we entering a new era of social commerce?by
With Facebook and Twitter both recently unveiling buy buttons that allow customers to purchase products without leaving their social media feed, are we finally welcoming in a new era of social commerce?
Social commerce has stuttered in the past, with retailers abandoning Facebook stores in their droves after failing to attract sufficient business.
But new research from Offerpop suggests that the latest innovations may be the catalyst for social commerce success.
Marketers and brands can now enable social commerce transactions through multiple social commerce channels, including:
- Facebook’s buy button
- Twitter’s buy button
- Twitter’s #AmazonCart hashtag that links directly to the Amazon’s shopping cart
- Twitter and American Express’ Sync partnership that allows payment by hashtag
- Twitter’s partnership with CardSpring that will allow online Twitter offers to be redeemed in store through a seamless link to a customer’s credit card
These innovations will be tested this Christmas as shoppers flock to both stores and online outlets to spend an estimated $650 billion.
Facebook’s buy button is being tested by several small and mid-sized retailers, and would allow brands to insert buy buttons into both status updates and social advertising. Meanwhile, Twitter is planning to fully launch a similar buy button by Christmas that will allow mobile users to make in-feed purchases by clicking on buy-button-enabled Tweets or advertising.
According to Offerpop, these two new commerce capabilities represent “a new evolution in social marketing” allowing seamless social transactions for mobile consumers and enabling Facebook and Twitter users to immediately buy the items recommended by a friend or trusted retailer.
Offerpop recently surveyed marketers and retailers to understand their approach to social marketing and social commerce for the upcoming 2014 Christmas shopping season.
According to the findings:
- Social marketing/commerce budgets are growing: 67% of companies plan to spend more on social media over the 2014 Christmas period than 2013.
- Instagram is Hot: 73% of marketers say Instagram is the breakout social network of 2014.
- But Facebook is Still King: 92% of marketers plan to spend majority of social marketing budget on Facebook this Christmas.
- Companies increasingly view social as a sales channel: 62% of marketers’ primary goal for 2014 is to extend brand reach and drive sales.
The evolution of social commerce will open up big opportunities for retailers to directly generate sales through social marketing efforts, according to Offerpop, closing the sales loop on social media in a nearly frictionless transaction.
Christmas spending this year will be a retail season of strong growth in baseline spending, ecommerce and mobile commerce:
- Holiday shoppers spent $602 billion in 2013 (National Retail Federation). The number is expected to increase 8% (Prosper Spending Score) in 2014, climbing to approximately $650 billion.
- Shoppers are expected to spend $304 billion on ecommerce transactions in 2014, according to eMarketer.
- Facebook and Twitter’s buy buttons tap into a mobile commerce market that continues to see exceptional growth. Mobile commerce is expected to grow more than 37% in 2014 to $57.8 billion according to eMarketer.
Also influencing the potential growth of social commerce is the changing social media demographic.
In the wake of the retail exodus from Facebook Stores, Forrester Research’s Sucharita Mulpuru equated Facebook commerce to “trying to sell stuff to people while they’re hanging out with their friends at the bar.”
But Offerpop notes that this Christmas will feature a maturing Facebook platform that is evolving into an advertising and sales channel with a growing adult audience:
- 71% of online US adults use Facebook, according to Microsoft.
- Facebook’s growth is now fuelled by an older demographic. The 54-plus age group on Facebook grew by more than 80% between 2011 and 2014 and the 35-54 age group grew by more than 41%, according to Microsoft. Facebook is also registering highest growth among college alumni (59% growth), according to Microsoft.
“Social media’s maturation into a commerce platform is occurring rapidly and opening up huge opportunities for brands,” predicts Kevin Bobowski, vice president of marketing at Offerpop. “A platform that many brands previously used only for engagement is evolving into an end-to-end solution that empowers brands to connect with, engage and sell to consumers in one seamless social experience. The 2014 Christmas shopping season will be the first test of brands’ ability to leverage these new social commerce tools and a gauge of social networks’ power to convince consumers to purchase products directly through Facebook and Twitter.”
Neil Davey is the managing editor of MyCustomer. An experienced business journalist and editor, Neil has worked on a variety of newspapers, magazines and websites over the past 20 years, including Internet Works, CXO magazine and Business Management. He joined MyCustomer in 2007.