With 1.5% of ecommerce web traffic being driven from social media, for most merchants today, social media is still an emerging channel.
“Even with the amount of airtime and media coverage social media gets, it’s still in a stage of infancy in comparison to other marketing and referring channels,” said Lou Paglia, chief product officer and co-founder of customer insights firm Jirafe, during a recent webinar.
Paglia said social media has gained traction with the new wave of buy buttons and could be a potential game changer for merchants.
“Buy buttons are designed to speed the purchase decision by targeting buyers where they see the promotion and can instantly allow them to buy from the location where they’re typically browsing,” said Paglia.
Paglia said this represents a huge shift in the industry and huge revenue opportunities for brands that begin planning now.
“We believe that the wave of buy buttons will gain share from traditional forms of advertising due to their ability to target, to get much closer to intent-based medium and to instantly convert customers,” said Paglia.
Paglia said by allowing merchants to put a buy button right in a post simplifies a number of steps consumers have to go through to complete a transaction.
Social media is on the rise: Paglia said 74% of consumers rely on social media to guide the purchase, 33% of consumers bought a product because of a promotion on a brand’s social media page and 43% of consumers are likely to buy a new product when learning about it on social media.
Paglia said that while majority of commerce transactions are still happening by the web browser, there is absolutely going to be a shift to mobile for ecommerce and social buying is increasing year over year as well.
“More importantly, consumers are increasingly recognizing social media as a means for product discovery, finding promotions, and to learn more about products via their social networks,” said Paglia.
Paglia said with a quicker and more efficient ways to purchase via the buy button, there is going to be a higher percentage growth in ecommerce purchases occurring via social channels and mobile devices.
Paglia said some of the advantages for social include a clear connection between merchant actions and consumer actions that lead to revenue for merchants. It allows merchants to adjust ads based on trending topics and how content is changing over time across the social sphere.
“It provides much more flexible scheduling, and personalization starting from retargeting and through social networks based on what’s happening on your site,” said Paglia.
“When the buy button gets added to each of the social events on the web, you’ll see the impact of conversion increase because it’s instant,” said Paglia.
Paglia said based on the Jirafe study, Pinterest and Facebook were the two largest drivers of commerce revenue. He said Facebook drives 96.9% overall social orders while Pinterest drove 3% across the Jirafe network.
“Regarding average spend, Facebook visitors have been spending 3.5 times more than the average visitor to Pinterest,” said Paglia. “Facebook traffic converts better, 17% better than Pinterest visitors.”
Paglia said that even with a higher conversion rate, conversion rate from social sources across a network are still converting at less than 1%. He said that while social is still driving fairly low conversion rates compared to other marketing channels, it is still expected to grow.
“Players in the social channel are still driving more on brand affinity and really browsing behavior from consumers rather than true conversion through the current traffic,” said Paglia.
Paglia said Facebook drives significantly greater traffic to the sites on the Jirafe network at an 8-to-1 ratio for visitors. When you move to orders, Facebook is driving about 23 times more orders than they were seeing coming from Pinterest.