In the last four years alone worldwide social commerce revenue has grown from just 5 billon dollars in 2011 to a projected 30 billion dollars in 2015 – a six fold increase.
And, according to the latest digital marketing analysis by Experian, search and social is now driving 54% of visits to retailer sites, making them the top two traffic sources for retailers.
Yet despite this, new research we at Kenshoo conducted with semantic advertising company, Dataprop, reveals that just 1.7% of products sold by 40 top US retailers were posted across social commerce channels.
Social commerce about to celebrate its tenth birthday
Yahoo first coined the term ‘social commerce’ in 2005 and since that time it has become a broad term encapsulating a lot of different technologies that enable e-commerce transactions to take place across social networks.
This powerful combination of social media and shopping enables individuals to recommend and buy products across social networks. This category includes a new breed of social network specifically geared towards shopping such as Polvvore for fashion, Houzz for home furnishings and Wanelo (want-need-love) a mobile app that enables users to share products from 350,000 retailers across all the major social networks.
Today 42% of marketers are already pursuing social commerce, with continued adoption expected.
Retailers missing the social commerce opportunity
To explore why so few retail products are featured on social commerce sites and to discover how retailers can better drive social commerce engagement, Kenshoo worked with DataPop to compile the first Search and Social Commerce Index (SSCI) Report.
The index uses a subset of DataPop’s proprietary Product Knowledge Graph to analyse the 40 plus retailers and their accompanying 2.9 million published products. We specifically looked at product categories which lend themselves to deep social engagement such as fashion, consumer electronics, and home & garden. Marrying the social commerce data with search advertising data from Google and Bing revealed that, even in top categories within search advertising, retailers are only posting 7.2% of their products for sale via social channels – a huge missed opportunity.
Retailers’ posts not aligned with consumer behaviour
Moreover our analysis reveals that retailers are not aligning social posts with consumer engagement. We tracked the attributes that consumers care about in each retail category, such as colours or materials, to determine how well retailers address those consumer interests and found a disconnect between the two.
On average, 70% of retailers use product names for social post titles even though consumers mostly use more descriptive terms such as colour, style, and material in their searches. Social commerce channels now allow for a much richer consumer experience so retailers can tailor product post images and titles manually – but also often through feed based updates. Those that do, will be able to take better advantage of the opportunity and drive engagement with consumers.
What retailers told us
And, according to the latest digital marketing analysis by Experian, search and social is now driving 54% of visits to retailer sites…
We wanted to know about the reasons behind the low representation of products across social commerce so we asked the retailers directly. Three important themes emerged:
1) We found that brand and ecommerce teams operate separately, with brand teams more likely to ‘own’ social media channels – but they have little to no budget allocated for testing social e-commerce.
2) We identified a lack of awareness of the expanding toolset available for e-commerce via social channels, both in terms of rich, informative, and sometimes promoted posts as well as in analytics.
3) Retailers who have minimal resources for social commerce find themselves in a classic ‘chicken-and-egg’ dilemma. Posts need to be optimised with more engaging titles, images and promotions to generate greater revenue from social. But this requires investment which many are simply not making. They are therefore not seeing sufficient return which means they can’t justify additional spend.
Learning from product listing ad data
Whilst many retailers may be slow to embrace social commerce, most are embracing search with vigour. So much so that Google and Bing Product Listings Ads (PLAs), which include product images, descriptions and pricing information displayed on search listings pages, saw a 618% growth in Q4 of 2013 compared to the previous year ( Johnston, Ashley. Tancer, Bill (2014). “The 2014 Digital Marketer”. Experian Marketing Services.).
This sets retailers up ideally for social commerce since analysing PLA data can be instrumental in determining which products and categories they should feature in social commerce and which attributes tend to encourage click throughs.
PLAs will continue to grow, but retailers can also look to fast growing social commerce sites to broaden their audience and sales through cross channel opportunities.
Cross channel initiatives involving search and social commerce together can, and should, serve as a real-time focus group to help retailers better engage with consumers across all of their marketing channels.
Social-commerce continues to evolve
As a relatively new phenomenon, S-commerce is evolving at a very fast pace. For example, while some retailers have tested and moved away from the idea of setting up a Facebook store in order to sell directly from within the social network, the latest phenomenon is the “Buy button”. Facebook recently announced the addition of a “Buy” button, and Twitter followed up be introducing its own version.
The opportunity here is that, once users enter their payment information and delivery addresses, they can purchase any of the offers that pop up in their social feeds with a single click, without ever having to leave their favourite social network.
Developments such as this are still in their infancy, however retailers need to be closely monitoring new opportunities for reaching out to customers and making it easy for them to buy through the social commerce channel.
More information can be found in the Search and Social Commerce Index report at: http://www.kenshoo.com/kenshoo-datapop-ssci/.