3 Ways to Improve Social Commerce Campaigns

Currently, social commerce is a bit of an oxymoron. Retailers are investing heavily in social, but the end result hasn’t been higher sales.

According to Forrester’s recent State of Online Retail study, 62% of online retailers see the ROI in their social investments as “unclear.” As retailers look beyond engagement from their social investments to hard ROI like conversions and average order value, they need to prioritize a strategy for making the social shopping experience more relevant for their customers.

For example, flash deals and social referral offers are an exciting area of innovation in ecommerce, but they’re not reaching their full potential to convert because they often ignore what a customer is actually interested in buying when they see an offer. Consider a visitor who’s interested in buying a fleece jacket but is offered a daily deal on a swimsuit. That deal will almost never convert.

While flash sales sites have definitely improved their personalization tactics with the ability to target content based on the consumer’s location, gender and age, they would be even more effective if they could optimize the deals based on what customers are interested in purchasing in the moment.

Retailers that want to move the needle on the social commerce metrics that matter most, including conversion rates and AOV, should follow these three rules:

Look at intent. A big area of opportunity for retailers in 2012 lies in the social graph – data on the relationships between connected Internet users, such as Facebook friends. Now that 50% of visitors to ecommerce sites are logged into Facebook while shopping, retailers tapping into the social graph should conceivably be able to leverage that data to offer a richer and more personal online experience.

The key will be for retailers to integrate social graph data with available behavioral data about shopper intent. Social graph profiles provide invaluable insights to a buyer’s geographic location, demographics, tastes and preferences, but this data alone cannot predict what a visitor actually wants in the moment.

Retailers need to look at shopper micro-behaviors, like their search terms, where they hover on the site and for how long, and other so-called “intent cues.” By effectively integrating social data with intelligence on their shopper’s current intent, online brands will see big gains. For example, knowing that someone plays the game cricket could be useful, but knowing they are shopping for a bat combined with the fact that they play cricket makes the profile information truly useful in presenting relevant content.

Prioritize personalization on-site, not on Facebook. Online brands continue to invest heavily in developing their Facebook pages, trying to activate a large fan base and target them with special deals and promotions based on their profiles.

While these Facebook investments are driving brand awareness, the traffic from Facebook page marketing is not converting nearly as high as paid search. This is because consumers on social networks are being advertised to when they are not in the right mindset to buy.

Thanks to Facebook Connect, more and more ecommerce properties are integrating social features into their websites, where consumers are more likely to make a purchase. The next step will be for ecommerce brands to optimize their on-site social sharing features with better personalization that emphasizes buyer intent.

Experiment with an eye on the metrics that matter most. Social commerce is a lot like the Wild West. It’s a nascent space, and it’s hard to predict precisely what personalization techniques will work best.

While retailers should certainly be measuring performance against common social metrics like engagement levels and reach, they now need to start measuring the impact these programs are having on AOV and conversions. Prioritizing social commerce platforms and personalization engines with built-in AB testing capabilities will allow for rapid experimentation to help determine what works and doesn’t work for your business.

In 2012, expect to see more experimentation and sophisticated thinking on how retailers can evolve social commerce beyond engagement to hard sales. If retailers can take the three rules above to heart, social commerce won’t always be an oxymoron.

Anurag Wadehra is the CMO at Baynote, a provider of ecommerce personalization solutions.

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