More and more people are buying things from websites after seeing them on social media. Historically, social media's share of ecommerce referral traffic has been lower than pretty much all other channels, but it's on the rise, and it's actually growing faster than any other channel.
That is according to some new research from BI Intelligence, which measured the impact of social media on ecommerce by looking at conversion rates, average order value, and revenue generated by shares, likes, and tweets.
Have you had success with driving sales with social media so far? Do you expect it to improve as a channel for driving sales for your business? Share your thoughts in the comments.
Here's the big picture. Yes, social's share is still quite small, but how do you think it's going to look after another quarter? After another year?
Keep in mind that Twitter, Facebook, and Pinterest all have buy button functionality that has yet to fully roll-out. Once that happens, it's very likely that that growth is going to come much more rapidly.
Pinterest recently announced its ecommerce efforts with Buyable Pins. It's poised to make a significant impact quickly thanks to early partnerships.
“You’ll find millions of buyable Pins on Pinterest, from great brands like Macy’s, Neiman Marcus and Nordstrom, retailers powered by Demandware like Cole Haan and Michaels, and thousands of Shopify stores like Poler Outdoor Stuff and SOBU,” says Pinterest engineering manager Chao Wang.
That's not to mention that Pinterest is also offering developers ways to enable more buying functionality.
Not to be outdone, Facebook, which announced its buy button nearly a year ago, but has remained in testing with it, announced with Shopify this week that those two have also been working together, and Shopfiy merchants can also take advantage of that.
Shopify says a small group of its merchants are already using the feature, but the beta test is now being expanded to a wider variety of businesses.
“The buy button allows consumers to easily purchase items they see on their News Feed or on Pages without leaving Facebook,” says Shopify’s Satish Kanwar. “Buying is safe and secure, and consumers can optionally choose to save their payment information with Facebook for future purchases. This makes purchasing easier, especially on mobile.”
The new, expanded beta test includes a group of US-based Shopfiy merchants, and those who qualify will see an invitation on the home screen of their Shopify account. Those who get that, and then choose to add the new Facebook sales channel to their account, can start posting products with buy buttons, promoting those posts, and managing customers and orders that come from Facebook.
“Everything you need to manage your Facebook sales is provided by Shopify,” said Kanwar.
This week, we looked at some research from Jirafe, which maintains that Facebook is still more effective than Pinterest for ecommerce based on data from 80,000 brands. According to that study, Facebook visitors spend 3.5X more than the average visitors from Pinterest, and Facebook traffic converts 17% higher, though the conversion rates for both sources are still less than 1%. Facebook drives much greater traffic at a ratio of 8:1.
The study also found that Facebook drove 23X more orders than Pinterest for merchants over the first five months of the year. Across Jirafe’s merchant base Facebook also drove $32 in revenue for every $1 that Pinterest generated.
Both Pinterest and Facebook are working on making it easier for users to search for things to buy. Pinterest is doing some pretty interesting things with object recognition and recommendations, and Facebook is testing the ability to search across the social network for items to buy from other users.
According to research from Shopify, the average order value of sales coming from Pinterest is $50, which is higher than any other major social platform. It’s the number two source of all social media traffic to Shopify stores (and overall based on Shareaholic’s quarterly reports). Two million people pin product pins every day, which is twenty times more than there are daily shoppers at the Mall of America. 93% of Pinterest users use the platform to plan purchases.
It's hard to say that Twitter is a major player in this area so far, but it's looking to change that slowly but surely. All of this adds up to potential increases in social media ecommerce traffic.
According o the BI report, it's already happening. It finds that social is already driving "much bigger" increases in retail traffic than any other online channel with referrals having increased about 200% between Q1 2014 and Q1 2015.
Like the Jirafe study, BI finds that Facebook continues to grow its lead as the dominant social commerce platform, accounting for 50% of total social referrals and 64% of total social revenue. The report doesn't underestimate Pinterest's presence in the space, however, noting thta it's a major social commerce player despite its "relatively small" user base. It's credited with 16% of social revenue even with an audience that's six and a half times smaller than Twitter's.
"Twitter is losing its influence for mass-market merchants, but it could still have a role to play among sporting and events marketers, especially for location-based promotions," says BI's Cooper Smith. "Recently, NFL and NBA teams have used Twitter to sell game tickets and merchandise."
"Instagram doesn’t drive significant sales activity for retailers but high-end companies have been leveraging the platform for branding purposes," he adds. "New Buy buttons on paid posts, as well as increased targeting capabilities, could make the app a more important direct-response driver."
Instagram is actually getting some design tweaks on the web this week. It's always been a mobile-first service, but more focus on the web version could potentially help it down the road when it comes to having a role in the social commerce landscape. And despite the world's overall trend toward higher mobile usage, the web is still where people like to do their online shopping most.
What have you seen the most success with for socially-driven ecommerce? Facebook? Pinterest? Something else? Let us know in the comments.
Image via Business Insider