The line between social networks such as Facebook and marketplaces like Amazon is about to become blurred. Google, Pinterest, Facebook and Twitter are all set to roll out facilities for users to purchase products from their websites in the next 12-18 months. Instagram hasn’t taken the same direction – they’ve integrated a “buy now” button, but this is just an ad that leads to the retailer’s website, different from the commerce approach Google and Facebook are testing.
For small businesses that want to compete online, engaging audiences via social commerce will become even more of a critical marketing activity.
What is social commerce?
Social networks are huge players in modern marketing and their plans to move into the retail space threaten businesses like Amazon and eBay. In less than two years, Facebook, Twitter, Pinterest and Google will all be acting as middlemen between their users and your products – recommending products, taking orders, processing payments and sending orders directly to your warehouses.
How should small businesses tap into social commerce?
The first step is to identify the networks your customers use – you can get this information from a simple survey – and (if you can) overlay it with sales data to find which networks your most profitable customers use.
Each network has different technical requirements to start selling – Google will require a live product feed that is regularly updated. Pinterest and Facebook require that you have OpenGraph markup installed on your website (this is where they retrieve product information) and Twitter has its own tagging system.
Above all, you will need to register with the networks, accept their terms and charges and maintain a clean record of efficient shipping and a good level of customer service to their users.
Why adopt a social commerce strategy?
By employing a social commerce strategy, businesses will be able to cut the time they spend learning about their customers and the money they spend to get in front of their target consumers.
The impact of one’s social (media) connections on purchase decisions is massive. In traditional marketing, we know that a recommendation from a person’s social circle is extremely influential in purchase decisions. Brands can promote customers’ tweets, or give prominence to a Facebook friends’ reviews of a brand on the social network. In some cases, new buyers don’t even need to see formal feedback; a simple “Like” may be more than enough to tip the scales in favour of a purchase.
Which social network is the most lucrative?
Unfortunately, there is no ‘best’ social network to target – all consumer groups use different websites for different purposes – there’s no point in rolling out campaigns on Facebook if none of your customers are there. You have to go to where your customers are and you shouldn’t ignore their decisions to shift to new networks as they become popular.
Google, Pinterest, Facebook and Twitter have all begun testing direct-purchase processes although this is currently limited to select groups of North American retailers. We expect the networks to roll out suchthe direct-purchase functionality to this market in the next year.
UK businesses, however, can’t afford to simply wait for the technology to cross the pond. Now is the time to pursue case studies, plan campaigns and identify the social networks your customers use. Here are a few insights to help you get started:
The burgeoning Google Shopping platform (currently only available in the US) provides a fast search interface, a trusted name and familiarity that draws people in. Tools like price comparison and access to Google accounts make the experience even more convenient for the customer. As the search engine inevitably integrates “Buy now” buttons into its regular search result pages, it will be worth joining this programme so users can make purchases without ever having to leave their search results.
Participation in Google Shopping is relatively straightforward – products are submitted to Google Merchant Center and the Adwords platform automatically brings up those products during searches (businesses pay per click) that match the product. Only physical products can be sold.
According to usage research from comScore and Nielsen, Pinterest users already employ the content-sharing site to keep track of the products they fancy and plan shopping trips. The network’s drive to integrate “Buy now” functionality into its existing platform means that it will soon become even easier for businesses to capitalise the sharing of image-based content.
Because Pinterest is so visually-oriented, it’s also the perfect place for your flashiest product photos, lifestyle shots and centrepieces; this is a network where you can effectively communicate your brand.
Twitter is well-known for short-form conversation and broadcasting. This platform will be perfect for products that rely on recommendations, capturing impulse or low-cost purchases (such as books, music, or movies) and making shopping easier for your customers.
Facebook’s massive potential revolves largely around its ability to track individual users throughout the internet through their “likes” and glean meaningful information from their actions. Add purchase behaviour to Facebook’s already in-depth audience insight tool suite, and you’ll be able to automatically build customer profiles, which include propensity to buy and expected profitability metrics – powerful insights for the highest bidder.
How will social commerce affect my marketing overheads?
Social commerce will undoubtedly be pay-to-play, with networks likely to adopt either a cost-per-click or commission-based model. While this may seem to be a mark against embedded social marketing, it’s important to consider what you’re actually paying for.
With the implementation of a “Buy now” button in a post, for instance, you get a highly effective sales funnel. Rest assured that each network will allocate huge budgets to conversion optimisation – they are experts at keeping users consuming content on their website, they just need to make the jump to pushing users to consume your products.
Once social commerce becomes a habit for customers, retailers will benefit from impulse purchasing and fewer objections – networks will invariably store billing and delivery details to create a single-click purchase journey.
Where will social commerce take my company?
Experience with Google’s product listing ads and Facebook’s promoted posts has shown that early adopters stand to profit the most – get in while competition is small and pricing is low.
The holy grail for a social network is algorithmically identifying which products appear in a photo or video that one of your friends has posted, then showing you an ad for the ones they think you’re likely to buy. For example, “Jenny is wearing an Amaya Dress from Phase Eight – buy it now for £49.99”.
With the backing of the biggest brands on the internet, there is no question that social commerce will only become more ubiquitous with time. Retailers will always need a website that is well optimised for search engines, but this new breed of marketplace presents a viable alternative to sales driven from traditional organic traffic.
Alec Bertram is co-founder of digital marketing consultancy Allotment Digital
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