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Purchasing via Social Media


Purchasing via Social MediaWhile Twitter and Facebook are working on Buy button testing, Pinterest and Instagram are looking like places where people may be motivated to buy.

Although e-commerce and social media have been linked for years, up until now there has not been a lot of progress, but now both Twitter and Facebook are testing with a mind to including shopping experiences directly into social media and Pinterest and Instagram are definitely looking like places where people can be motivated to purchase.

Already many businesses are using social media to link to their online storefronts, but Facebook and Twitter want to make the experience more seamless, both experimenting with a Buy button that allows consumers to complete purchases with a click or two and without leaving the social network.

It is still debatable if people are comfortable shopping in the same place that they connect with friends ie. will they pause to tap “buy” while scrolling through posts or communicating with friends online?

Although not “done and dusted” yet, the potential market is too big to ignore (in the US alone, census data shows that e-commerce generated more than $293 billion in sales during 2014.

Shopping Via Twitter

Twitter’s first attempt at e-commerce early in 2013 with a Twitter-synced Amex card by tweeting a specific hashtag eg. #buyXBoxController, was too complicated and was discreetly withdrawn, but now users can load discounts onto their cards by tweeting specific hashtags.

Amazon also has hashtag-based integrations with Twitter. When a user puts #AmazonCart in a reply to a tweet that includes an Amazon product link, that product is added to his or her Amazon cart. Similarly, using #AmazonWishList in a reply adds items to a user’s wish list on the site.  It’s still a bit complicated which is why Twitter is still working on the best e-commerce platforms and brands, artists and even non-profit organisations etc. to make it more appealing.

Usability is important, but only part of the problem – the question is, will or are people actually using it?

To date, Twitter has declined to share usage data even though it’s clear they are moving on with their testing.  In November they launched “Twitter Offers” which gives advertisers a way to offer virtual coupons within promoted tweets.  The offers are loaded directly onto the buyers credit or debit card and then automatically applied when a purchase is made.  The technology allows businesses to track when their network advertisements are leading to sale.

In December a book group partnered to sell books via the Buy button and it proved very successful for at least one author, Amanda Palmer, she offered a signed draft page of the manuscript of her new book to the first 100 people who bought it through the tweet.  Palmer has more than a million Twitters followers, so is the perfect combination for trialing social commerce, but Twitter hopes it will also scale to less known personalities/businesses/goods etc.

Twitter’s President of Global Revenue, Adam Bain, commented “People are tweeting about products and services, but there’s a big distance between that and actually making a purchase. American Express and Amazon have already brought e-commerce closer to tweets. We saw this as a great organic experience, and we decided to shrink that experience. If you’re tweeting about a product or service, a button shows up and you can one-click to buy. We’re experimenting with different products and price points, and most importantly what emotions do you need to find to generate a sale. What we do is monetize emotions.”

Shopping via Facebook

If Facebook appears to be moving more slowly with e-commerce, it’s partly because the social network’s efforts in the arena have been marked by flamboyant failures.

The most notable example: the Facebook store program that it launched in 2011. The Gap, J.C. Penney, Nordstrom and GameStop all opened and closed Facebook stores within a year. Companies complained that they weren’t seeing enough ROI and that creating a shopping destination on Facebook proved to be redundant.

Facebook Gifts, another attempt at direct sales, was online longer but also didn’t last. After starting it in September 2012 as a way for people to send trinkets to friends, Facebook dropped physical products from the programme last year, focusing on selling gift cards to companies such as Starbucks and Target. Then in August it shut Gifts down entirely to focus on its main commerce efforts.

These efforts are mostly being done without fuss. Facebook announced its Buy button test last July, saying it would be offered to a few small and medium-sized business in the United States. Unlike Twitter’s testing which is being done in public with a large group of partners, Facebook is playing it close to the chest. It hasn’t released the names of companies in the test and we couldn’t find any Facebook Buy button examples online.  There was heavy demand from advertisers to cash in on the holiday shopping season, but this didn’t hurry Facebook along.

Facebook’s Head of E-Commerce, Nicolas Franchet said it doesn’t want to confuse retailers by offering something that it later might have to take away, so just displayed standard ads with links to shopping sites.

Meanwhile, Facebook continues to press ahead with more subtle commercial options. Since February last year, advertisers have been able to insert call-to-action buttons — Shop Now, Learn More, Sign Up, Book Now or Download — into News Feed posts. In December it gave Facebook Page administrators the ability to add similar buttons to the top of their Pages.

Facebook also has a payment and shipping infrastructure in place, built to serve its previous e-commerce efforts. Currently payments are primarily used for in-game app purchases but the company also offers app developers the ability to tie into the payment system.  That process, called Autofill, got a big boost last April when Facebook signed an agreement with Ecwid, an e-commerce platform provider that supports 600,000 online merchants in 175 countries.

Facebook COO, Sheryl Sandberg, was quoted last year saying “Commerce is really important and is a growing important part of our business. The more people buy online, the more people buy things they discover through their mobile phones, the more people discover things from News Feed and go on to purchase, the more important we are in driving e-commerce, and I think we are increasingly important.”

Does Anyone Actually Want To Shop On Social Media?

Many analysts still doubt that Facebook and Twitter will prove to be major e-commerce players. Social Media sites are seen more as general interest networks, and it is believed that most people go there for reasons other than shopping, and history can prove negative, as Chris Dixon, an investor at Andreessen Horowitz, explained the failure of Facebook stores in 2012: “Facebook is like Starbucks where everyone hangs out but no one ever buys anything.”

Pinterest, on the other hand, doesn’t face that perception. People flock to the social bookmarking site to explore products that they might want to purchase. Pinterest says two-thirds of its content — reported last April at more than 30 billion pins — comes from businesses. Pinterest isn’t currently working on a buy button but its Rich Pin feature shows pricing and availability of items from e-commerce sites, and people who pin a product get email alerts if a price drops.

Instagram is also seen as a discovery engine and several third-party vendors have created workarounds that make Facebook’s visual social network e-commerce friendly. Curalate’s Like2Buy,for instance, enables users to bookmark their Instagram likes on a custom landing page. Curalate CEO, Apu Gupta, says brands using the service are seeing 60-70% click-through rates.

Gupta believes Buy buttons are part of a trend of e-commerce transactions being decoupled from retail sites.“Gumroad allows you to have a shopping cart anywhere,” Gupta said in an interview with Marketing Land. “Somebody can take products from a brand put it onto a blog and affiliate link there and actually clear the transaction remotely. So you are going to see a broader distribution of places in which transactions can happen. That’s going to include social but I think it’s going to favor certain social networks over others.”

Analysts believe that Pinterest and Instagram will probably be the most preferred networks and are more cynical about Facebook and Twitter because most purchases aren’t generally random, impulse buys and that Google search is usually the final step before a sale, which is why Google search is so powerful for commerce.

There may be more opportunity on Facebook and Twitter for sales of items with short shelf lives, for example concert or movie ticket,s as news on these sites is comprehensive and fast moving, but in saying that there is still skepticism.

So, social media’s relationship with e-commerce is still not a  proven success, but it is evident that we will have more clarity of the direction it is going to take in the not too distant future.

So, don’t miss the boat … if you haven’t yet set up social media accounts to promote your business on Facebook, Twitter, Pinterest and Instagram, do it without delay and make sure you contact us to have them integrated onto your website.

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