Category Archives: e-commerce

Social Media influences less than 1% of Online Purchases

Ecommerce businesses should concentrate more of their efforts on traditional online marketing tactics like search and e-mail than social media. That’s the conclusion of a Forrester study released Tuesday, which examined 77,000 online transactions made between April 1 and April 14. The study found that less than 1% of them could be traced back to social networks like Facebook or Pinterest.

Determining how web activity influences purchases is tricky; although many often credit the last touchpoint for a sale, Forrester found that half of repeat customers and a third of new customers touch multiple touchpoints prior to a purchase. As such, certain funnels, like display advertising and e-mail, may be undervalued.

Nevertheless, ecommerce websites still convert more highly than any other channel, accounting for 30% of transactions. Thus it’s smart for retailers to promote their domain names as much as possible.

Following direct visits, organic search and paid search are the two biggest drivers of purchases from new customers, accounting for 39% of new customer transactions. That’s because the web continues to be a useful tool for what Forrester calls “spear fishers” — consumers who know what they are looking for and find it through search.

For repeat shoppers, e-mail is the most effective sales influencer: Nearly a third of purchases from repeat customers initiated with an e-mail. As such, businesses should up their efforts to collect e-mail addresses, and tailor their e-mail marketing messages to each recipients’ device and prior purchase behavior.

Social media’s potential as a shopping portal has yet to be realized. Less than 1% of transactions from both new and repeat shoppers could be linked to social networks, Forrester found. That said, the researcher believes social media can still be a powerful marketing tool, and that social media’s influence on purchase behavior likely can’t be measured in the 30-day attribution window the report examined. Forrester also asserts that social media is a bigger sales driver for small businesses, which were not included in the study.

Social networks may one day figure out a way to drive more purchases, but for now, retailers seeking higher sales conversions should concentrate on the products that have longed performed for them — search and e-mail marketing — as well as in the marketing of their URLs.

Read full article: Social Media influences less than 1% of Online Purchases »

Why you can’t sell with Social Media (and 3 things to do instead)

Social media can give your company many different benefits. It can increase awareness and introduce you to new people. It can be used to help customer service, and follow-up with disgruntled customers. It can also be used to get the elusive, but effective word-of-mouth marketing. But it can’t sell. At least, that’s what people say.

Market research giants Forrester Research and GSI Commerce looked at online retailer data in 2010. They were trying to determine how many actual retail sales came from social media visits. The results aren’t pretty.

Less than 2% of all orders were from social networking shoppers. (Conversely, search and email marketing converted the most).

The most common objection to using social media is, “What’s the return-on-investment?”. And when you try to come up with an ROI, you get results like these (dismal, to say the least).

So what’s the solution? Give up entirely? Or should you just look a little more closely…

Most common Social Media goal metrics

Most common Social Media goal metrics

How a Toy Maker Used Social Media to Increase Revenue by 300%

The direct ROI of social media is usually dismal. But then again, so is almost every offline advertising method like TV, radio, print and billboards. However they obviously increase sales. They just aid indirectly, so it’s difficult to measure a direct conversion rate. Just like social media.

Try telling toy maker Step2 that social media doesn’t drive sales. Here’s a quote from the Wall Street Journal:

Step2′s use of PowerReviews and Facebook together provided some measurable gains. [Online Marketing Director] Tena Crock claimed sales from increased 130 percent year-over-year after PowerReviews added loyalty and badges for reviewers and buyers in February 2012. Since October 2010, Step2 has recorded a 300% boost in revenues from visitors who arrive at via the Facebook Connect button.

Step2 is seeing impressive online revenue growth, due in large part to their integration of social media. So who’s right? Does it drive sales, or doesn’t it? Or is it all in your approach?

How to Drives Sales with Social Media (Even if You Can’t Track It)

Social media doesn’t drive sales directly. But it significantly impacts sales indirectly. So here’s what you should do instead.

  1. Increase Awareness: The first step in marketing is to get your prospect’s attention. Selling is difficult for most companies online because… no one’s ever heard of you. And no one’s going to buy without recognizing your brand.
    Don’t use social media to sell, but to get attention initially. Promote content, run contests, and create an identity in your industry. And then think of fans and followers as leads, and nurture their trust over time to accelerate first-time purchases.

  2. Establish Trust to Accelerate First-Time Purchases: Email marketing is consistently one of the best performing marketing channels. But it’s not because companies are exceptionally good at it. It’s because following up with leads consistently over weeks, months and years builds trust and recognition. Just like seeing television ads over years or finding your brand logo on a sports team’s jersey.
    You can accelerate purchases with social media by providing information to drive need awareness, interact to overcome objections, and use authenticity so prospects pick you over the competition.

  3. Increase Purchasing Frequency: Netflix has built a thriving business on $8 a month. They’re successful because they can predict the average lifetime value of each customer. Most people don’t just sign up for one month. The average person may be a Netflix subscriber for 36 months… or longer. That predictable, recurring revenue is a powerful income stream.

    Marketing 101 says it’s cheaper and easier to keep an existing customer, than to acquire a new one. And using social media is an easy, effective way to increase your profitability by increasing the lifetime value of a customer. People will buy more products and services, or simply buy more often.

  4. Social media can drive sales… but it does so indirectly. People find you in social media through serendipity… they don’t typically go actively looking for products and services to buy.

    So your social media strategies need to gain attention, inspire trust, and then increase profitability. It takes a little longer to get started, but it can pay off significantly in the long run.

    Read full article: Why you can’t sell with Social Media (and 3 things to do instead) »

5 Retail Lessons For Ecommerce Sites

The traditional ecommerce experience normally entails searching on Google or Amazon for the product you want, and then scanning for the cheapest deal. Or maybe it means visiting a retailer’s website and trolling through 575 pairs of shoes to find something that suits your style. But rarely does buying online feel like the enjoyable real-world experience of “going shopping.”

By contrast, meeting up at the mall or wandering a busy shopping district with a friend is an inherently social experience. You never know what cool stuff you’ll stumble across, and those moments are what make going shopping so much fun. These fun aspects are actually transferable to the online world. Here are the five to focus on.

1. Let People Emote – Retail therapy is all about discovering products that get us excited and provoke reactions and conversation with our friends. While many brands have added “want” buttons to product listings, several months of data generally show that a “want” post performs poorly at driving follow-up reactions in the social stream. This is likely because “wanting” something is typically tied to a more considered purchase process.

The key is to enable people to emote the same way they do during the physical shopping experience, and let them share their reactions with others quickly and easily.

For example, providing tools to emote is at the core of The Huffington Post’s social features. Next to most articles you can click on buttons that say “amazing”, or “weird”, or “important”. This range drives a more interesting social post and follow-up comments.

2. Showcase What’s Hot – If you make it easy for people to express their views on products, you’ll also know what’s “hot” in your inventory and can give these products more prominence within your shopping experience. By featuring these trending items, you drive impulse purchases by even casual visitors. This creates a self-reinforcing viral loop, which can give products broad exposure to new potential customers.

For example, social curation site Wanelo showcases products from across the web that are “saved” the most by its users. More “saves” by users give a product a higher placement on the home page, letting people know what’s hot among Wanelo users.

3. Ditch the Cart – Pushing a cart around is a drag in the real world and online. Since social commerce product discovery often comes from within a social stream, it is all about spontaneous, one-off buys, not shopping from a pre-defined list. Enable your shoppers to immediately buy with one click rather than filling up a cart they have to manage and can more easily abandon.

It’s all about taking friction out of the system so impulses can result in instant sales. The iTunes store has shown the clear value of this one-click, cart-free approach.

4. Lead with Mobile – Social discovery is driven from the social stream, and that stream is increasingly being consumed on mobile devices. As of a few months ago, people spend more time using Facebook on their mobile devices than on their PCs, and Twitter users spend six times more time using Twitter mobile than

This has major implications for the shopping experience. Mobile behavior is a lot different from desktop behavior. With mobile, people prefer snippets of browsing versus longer periods of time when they sit in front of a screen. Make sure your mobile ecommerce experience is bite-sized enough to make spontaneous discovery fun and easy.

Social commerce vendors can take a page from Amazon’s mobile shopping flow, which is a great example of this approach in action. The mobile web experience and the mobile app offer simpler versions of the full site that enable shoppers to easily get in and get out.

5. Use Data to Fuel Discovery – The online ad industry long ago mastered the art of behavioral targeting: using data about what people do online to infer what their interests are and serve them more relevant ads.

The same thing is now possible with social commerce as people share opinions about your products. The more people interact, the more information you’ll have about what they, and people like them, are interested in. Use this data to put the right products in front of the right people to boost discovery and sales. It’s important to note that this interest or taste-based clustering and targeting reaches beyond the social graph and can be much more effective at driving results. It also makes the shopping experience less of a chore and more fun, since only the products you really like are served up to you.

Read the full article: 5 Retail Lessons For Ecommerce Sites »

How Most App Makers Are Making Money

“Freemium” has become the standard business model in mobile apps.

According to a BII analysis of App Store data, 93 percent of the top 100 grossing iPhone apps use in-app commerce. Of those 100 grossing apps, two-thirds are free.

As most the top grossing apps are games, in-app commerce is most commonly used to sell in-game currency. However, companies like Pandora and eHarmony are using in-app purchasing to sell subscriptions, while Marvel is using it to sell access to comics.

in app purchasing is driving mobile app revenue aug-2012

in app purchasing is driving mobile app revenue aug-2012

Read the full articole: This Is How Most App Makers Are Making Money »

More than 50% of Smartphone Owners Run Price Comparisons in Stores

An increasingly large subset of U.S. shoppers are using their mobile phones in stores. Some retailers, like Target, are encouraging that behavior, giving shoppers gift cards and other rewards for checking in and scanning merchandise. Others, like Best Buy, are doing their best prevent it, even going so far as to strip the standard barcodes on products to discourage shoppers from running price comparisons with other retailers.

Emphatica recently issued a survey among 6,500 U.S. Internet users — a little more than half (52%) of whom identified as smartphone owners — to take a closer look at how they’re using mobile in stores.
Impressively, 55% of smartphone owners said they’ve used a mobile device to compare prices between retailers. Thirty-four percent said they’ve scanned a QR code, and 27% have read online reviews from their devices before making purchase decisions.

Those findings and more are showcased in the infographic below. Note that the statistics in the third category only include responses from smartphone owners.

More than 50% of smartphone users run price comparisons in shops

More than 50% of smartphone users run price comparisons in shops

Read the full article: 55% of Smartphone Owners Run Price Comparisons in Stores »

« Older Entries