While there’s no denying that consumers are increasingly using social media in just about every area of their lives, they still aren’t into shopping there. A new global study from PwC, the global consultancy, reports that last year, only 12% of consumers bought anything through social media.
Nor does social media buzz do much to drive sales: Only 18% of those consumers active in social media made a purchase as a result of information they got via their social-media connections.
The report says.
“Our survey data shows that social media will, for the near future, remain a backwater sales channel, if you can call it a sales channel at all. While about half of respondents say they’re checking out social media sites daily, only a tiny minority uses the sites frequently to shop. In fact, seven out of ten online shoppers who took our survey say they never shop this way. That should remain the status quo for the immediate future.”
But the survey, based on 11,000 people in 11 countries, did highlight a fast-growing willingness to interact with brands via social media, with 59% saying they follow brands through social channels, up from 49% last year. And 27% say they’ve discovered brands they didn’t know about this way, compared with 17% last year.
One big exception is China, where one in four shoppers has already made a purchase via social media.
PwC has classified them in three different groups:
- Brand lovers - This segment offers the most potential for future shopping, and includes the 38% of consumers now following brands and retailers, up from 33% last year. And they are the fiercest shoppers, with 53% going into an actual store at least weekly (compared with 45% of the overall sample), and 45% making at least one online purchase per week.
- Deal hunters - Nearly half of the survey fell into this category, and will click through to online stores if they think they’ve spotted an appealing offer.
- Social addicts - While the smallest group, this minority uses social media “to talk about their experiences with brands, learn what their friends like and recommend, find customer service answers, and submit ideas and product feedback to companies,” the report notes. Failing to include these evangelists “carries significant reputational risk, as these very active online users tend to have huge social media networks and wield an outsized influence.”
Its slow start as a commerce channel notwithstanding, social media continues to be a critical component of brand building. The report says.
“Despite its inability to lead directly to a purchase, social media activity is a pretty strong indicator of how much some shoppers will buy, both online and in stores, so...the impact social media has on the brand needs to be part of every multichannel strategy discussion. It’s clearly a robust marketing and communications tool for retailers and consumer product companies.”
COMMENTARY: Although some brands over the years have been skeptical about how social media can bring in revenue, a new infographic reveals social commerce sales are expected to bring in $30 billion each year by 2015, with half of web sales to occur through social media.
According to the data, Facebook drives 26% of referral traffic to business websites and those numbers are only expected to increase. About 20% of shoppers already prefer buying products through a brand's Facebook page compared to its website.
Although Facebook users still use the platform largely for personal use, one in three businesses embrace it to reach out to consumers. Nearly 10 million registered small businesses have a Facebook presence, and 89% of agencies use the social network to advertise for their business clients.
Fans who follow brands on Facebook are also more likely to purchase items from the company than non-fans. With that in mind, about 89% of small businesses believe Facebook is a valuable marketing tool for their brand.
In an article dated January 28, 2013 appearing in Social Commerce Today, it was announced that Payvment, the leading provider of Facebook enabled social commerce storefronts, announced that it will cease operations on February 28, 2013 and transfer all accounts to social commerce platform Ecwid.
Ecwid, an e-commerce provider with more than 250,000 customers, will be taking over Payvment's 200,000 customers, though terms of the deal are unknown at this time. An announcement released this morning states that Ecwid will be “acquiring sellers referred by Payvment.”
For those unfamiliar, Ecwid is no slouch when it comes to e-commerce. It built the first PHP-powered store builder, which eventually became known as X-Cart. Its current platform allows merchants to easily embed a shopping cart widget into their blogs or websites with no little or no technical knowledge required.
There’s also a mobile version of the platform and Ecwid also has its own Facebook shopping cart app, which I assume is what Payvment sellers will transition to.
Both Payvment’s and Ecwid’s customer base consists primarily of small businesses, so there is synergy there. In fact, if you ask me, based on my knowledge of both companies and their respective CEO’s, I think Ecwid is the perfect e-commerce provider to take over Payvment’s client base and would suggest to its sellers that they are in good hands.
These two companies commanded the lion's share of social commerce stores on Facebook. Facebook does not report revenues from ecommerce storefronts and neither do Ecwid and Payvment, but it is important to note that these customers are mostly small businesses conducting ecommerce sales on Facebook.
On the flip side of the coin, large retailers have not fared very well selling their goods on Facebook. In fact, in a blog post dated February 17, 2012, I reported that Penneys, Nordstroms and Gap had opened Facebook stores, but quickly closed them down only after a few months. The failure of large retailers to generate much traction on Facebook makes you wonder if it is even possible to generate significant ecommerce sales through Facebook. The above infographic forecasts taht social commerce sales could hit $30 billion by 2015. There are still a lot of unanswered questions, and the above PcW survey certainly casts doubts about social commerce or F-commerce (Facebook).