Marketing Matters is a monthly column covering how marketers today can use Digital to drive innovation and results
Social commerce, or S-commerce, is one of the newer kids on the E-commerce block. Of course, it is also a very broad subject. Some would also include Taobao and travel websites like Tripadvisor and Airbnb in the S-commerce sphere. For today’s discussion, we will only focus on S-commerce activities triggered by social media. Blending e-commerce tech with social media and other contributor-driven platforms, this part of the industry has been growing steadily and quickly, with the world’s top 500 retailers netting over three billion USD from S-commerce in 2014, up 26% from 2013.
With the continued global rise of social media, S-commerce – in terms of both direct sales and referrals to merchants’ and retailers’ websites – is here to stay. Take e-commerce social media referrals – these alone increased almost 200% between Q1 in 2014 and Q1 in 2015. This is generally great news for retailers, but the industry still has much growing and maturing to do, particularly when it comes to diversifying platforms and embracing mobile.
Right now, S-commerce has a lot of eggs in one basket: Facebook is by far the most dominant platform, with 50% of total referrals and over 60% of total revenue. Twitter and Instagram do not have anywhere near the clout of Facebook, though they are emerging as niche players – Twitter is proving popular with sports and event marketers, especially with location-based promotions; while Instagram is proving attractive to high-end companies seeking to strengthen their brand. Newer players like Snapchat are entering the S-commerce market, but their ability to sustain sales remains to be proven.
In view of this trend, many social media platforms are investing in enhancing their features to capture the attention of end consumers and create business opportunities for retailers.
In case you missed it, Google announced it will be adding a ‘buy’ button to product search results made on mobile devices. This button will let consumers make instant purchases from the brand, but on Google’s mobile search results pages. With these buttons coming soon to YouTube and Facebook, these instant purchases will ‘reduce friction’ by delivering a more seamless and faster experience, helping consumers overcome their mobile reluctance.
Pinterest, the social photo sharing service that has become a worldwide phenomenon, is now a major force in S-commerce despite its small user base. Currently responsible for 16% of global S-commerce revenue, the site is proactively innovating and driving the industry forward. Its new ‘buyable pins’ feature, which is still running its pilot test in the U.S., is allowing users to buy products pinned on e-commerce sites without leaving Pinterest. Now, any time a user pins products from a brand’s website, these products can be purchased by anyone else directly through Pinterest. This is of great benefit to all sides, as this ‘social proof’ style marketing involves very little advertising budget and fosters high consumer trust.
If we look at the market in Taiwan, we find that a lot of platforms doing retail business have acted fast to ‘dress themselves up’ like Pinterest. Sooner rather than later, they will also be following suit in adding features equivalent to ‘buyable pins’.
All this is good news for businesses that are looking to expand their mobile wallet share. Google credits ‘shopping micro-moments’ – time spent searching for or reading about products on their mobiles – with driving almost one trillion USD in sales in the US in 2014, and this figure is set to explode globally.
In the future, S-commerce will play an ever-larger role in these moments. It’s already happening: ‘conversational searches’ are growing, whereby consumers talk to Google and ask for help with new products. Google literally answers them back with smart shopping ads that have product rankings and reviews included; deep links on retailers’ apps right in their shopping ads, driving traffic direct to retailers’ mobile apps instead of their websites; and private sales and ‘daily deal’ sites like Moda Operandi and Groupon allow customers to preorder directly from designers and create buzz around daily sales events.
At the end of the day, S-commerce is about people socialising and helping each other buy things in the most convenient way possible. It allows people to leverage the advantages of digital platforms and transform them into a personalised shopping experience. Retailers that keep these customer motivations in mind will be well-placed to link multiple channels and technologies together to create an omni-channel O2O experience that will satisfy and delight their customers.
Daniel Wu, General Manager, Epicentro
Epicentro specialises in digital content development and is a member of the Pico Group
Awarded ‘Events Standard of Excellence’ and ‘Marketing Standard of Excellence’ in 2015 WebAward for Outstanding Achievement in Web Development by the Web Marketing Association
Daniel has been with Pico for over 15 years and is a seasoned event marketing industry professional. Foreseeing the ample opportunities presented by the world’s rapidly-changing technological landscape, Daniel began planning for a new business unit specialising in digital content solutions in 2010. Commencing full operations in 2014, Epicentro has spearheaded the development of unconventional technologies, helping our clients reach and stay on top of the market. Under Daniel’s leadership, Epicentro has established a strong client list spanning the commercial and government sectors: AIA, Airport Authority Hong Kong, Amway, Dragages, the government’s Environmental Protection Department and Home Affairs Department, the Hong Kong Trade Development Council, Jardine, Suntory and Watsons.