Social Networks & e-Commerce - Should Retailers Focus their Efforts Elsewhere?
It would be fair to say that many retailers forays into social media have been driven by 'social' rather than 'strategic' imperatives - they want to be there because everyone else is, not because they know what they want to get out of it.And if retailers were engaging in social with a view to driving future e-commerce revenues, then a recent report from emarketer may well have pricked that particular bubble.In a survey of US omnichannel retailers, more than a quarter said that less than 1% of the traffic to their ecommerce sites came from social networks - the most popular response. Worse still, 43% of the US retailers polled said less than 1% of shoppers who came to their ecommerce site from social networks made a purchase while visiting the site.The limited impact of social networks on e-commerce is backed up by a recent study conducted by customer research platform Custora. They found that social accounted for just 1% of US ecommerce orders in Q1 2014, tying display for the lowest share. Organic search topped the list, accounting for 24% of e-commerce sales.So should you abandon your Facebook, Twitter and Google+ accounts forthwith and focus your digital efforts elsewhere? Before you do anything too hasty, we'd recommend you have a read of our arguments in favour of social networks below:Social Activity Has an Influence on Search, and Search Is the Largest Driver of e-commerce TrafficWe need to be careful here. There are many with vested interests who will tell you that social signals (likes, shares, comments, favourites, RTs and +1s) have a direct impact on Google's search algorithm. Although no-one can say definitively whether they do or they don't, the word from the horse's mouth (Google spokesman Matt Cutts) is that they don't. However, they do have an indirect impact.For example, content shared on a social network could turn into an incoming link if a follower is a blogger or journalist, leading to a positive SEO impact. Google +1s can lead to a listing on personalised search results if a searcher's Google+ follower has +1'ed a site related to that search. And we mustn't forget, networks like Facebook and Twitter have become search engines in their own right.Social Media is a Great Customer Service ToolSocial media is not only a great way to identify customer gripes by making visible what's being said about your brand, but also a great way to respond to them and demonstrate that your brand is committed to transparency and putting things right. Many customers are getting savvy to the fact that social media is the channel where they're most likely to get a swift resolution to their complaint due to its public nature, so the use of social media as a customer service channel is only going to grow. Those that rise to the challenge will see the commercial benefits from increased customer retention and positive brand perceptions.Social Is More Influential at the Top of the Purchase FunnelAlthough we don't know the exact nature of the surveys carried out by eMarketer and Custora, it's likely the retailers involved were judging the effectiveness of social media based on last click attribution i.e. the last action that drove the visitor to the e-commerce site. Social media will always be under-represented (and search over-represented) if this is the case as it tends to channel prospects into the top of the purchase funnel - driving awareness and interest - rather than at the bottom, where purchase action is taking place. It's likely that social would be found to be much more influential if the results were based on a truly holistic attribution model.Social Offers Excellent Advertising OptionsIf you accept the notion that social works at the top, rather than at the bottom, of the purchase funnel, then the ad targeting options offered by the likes of Facebook and Twitter are another reason to use social networks. Both social networks offer ad formats to suit every objective and a plethora of interesting targeting options (starting to get close to the marketer's nirvana of the 'single customer view') and, in general, offer a hugely efficient way to put your brand in front of past and future customers.Social Media Drives AdvocacyFor the reasons mentioned above, it's unlikely that these studies are measuring the impact that social media has on advocacy. Social networks enable brands to reach out to and nurture advocates, and gives those advocates a simple and effective way to share with their extended peer group. Again, those recommendations are unlikely to drive actions direct from social networks to brand e-commerce sites, but they will drive new prospects into the top of brands' purchase funnels. So, should retailers focus their efforts elsewhere? That depends on their what they want to get out of social.If their primary goal is sales, then they need to understand the complete holistic impact of social throughout the purchase process and not just measure the last click. If their goal is search rankings, then they need to find out what content is generating incoming authority links and focus on building the right sort of following. If their goal is customer service, they need to have processes to respond quickly and effectively with complaints and benchmarks to measure performance.But most of all they need to have a goal and a strategy to attain that goal - not just be there because everyone else is.