Digital Marketing And Social Commerce

Importance of Social Media on E-Commerce: Social Commerce

Social Media is Omnipresent; let it be the first phone of a 12th class student or the personal computer of a parent. Everyone is on social media platform and adds their share to the web traffic. Amidst their activities on the social media websites, there is a great deal of opportunity for E Commerce. But most of the companies although aware of the jackpot of opportunities they have not yet decoded the code in leveraging the maximum from the Social Media to drive the E Commerce traffic.

Social Media plays a pivotal role in influencing social purchases of most of the customers. The most important factor that has to be analyzed is to what extent brands will be able to leverage social media to improve their loyalty?

Social Media referrals share of pie in the overall traffic to the Websites:

The typical referrals for the E Commerce websites are mainly through direct Search engine traffic, E-Mails and Social Media Referrals.

Share of E commerce Website Visits on basis of Traffic Source

CHART1Source: Monetate EQ2 2013

Approximately one-third of the e-commerce website visits in Q2 2013 came from search engines, compared to about 2.4% from email and a meager 1.1% from social media. But the irony is that a major part of the conversion rates came from email with 3.34% which outperformed both search which has 1.94% and social which has 0.79% by a fair margin.

But the total value generated is greater from Search ( $ 112) compared to the other major two referrals at $ 100 and $ 87 for Email and Social respectively.

Email Referral traffic

 

CHART2

Generally most of the marketers compensate the decrease in the results from Email by sending more email. 80% of the marketers indicated that they spend more emailing on their house in 2013. But the result could be a downward spiral i.e., the more emails marketers send, the more customers unsubscribe or mark them as spam. And because the return on investment decreases, marketers send even more emails, as a result perpetuating the negative cycle.

And marketers take social media for granted and spend very little amount in social media campaigns. The time and investment spent on social media is also less compared to the SEO(search engine optimization) and Email Subscriptions.

Consider the following tables:

Source: Monetate E-commerce Quarterly EQ2 2013
Website visits by Traffic Source

Q2 2012

Q3 2012

Q4 2012

Q1 2013

Q2 2013

Search

33.33%

34.62%

32.75%

31.91%

32.90%

Email

3.75%

3.49%

3.97%

3.05%

2.36%

Social

1.95%

1.70%

1.21%

1.33%

1.11%

 

Conversion Rate by Traffic Source

Q2 2012

Q3 2012

Q4 2012

Q1 2013

Q2 2013

Search

2.12%

1.99%

2.27%

1.81%

1.94%

Email

3.56%

3.50%

3.40%

2.91%

3.34%

Social

0.62%

0.71%

0.85%

0.69%

0.79%

 

Add to Cart Rate by Referrer

Q2 2012

Q3 2012

Q4 2012

Q1 2013

Q2 2013

Search

6.64%

6.59%

7.84%

6.74%

6.81%

Email

10.51%

10.59%

11.48%

10.46%

10.73%

Social

2.52%

3.03%

3.75%

3.23%

3.37%

 

Average Page Views by Referrer  

Q2 2012

 

Q3 2012

 

Q4 2012

 

Q1 2013

 

Q2 2013

Search

9.27

9.09

9.03

8.94

8.71

Email

9.09

9.46

9.12

9.11

8.84

Social

4.83

4.89

4.97

4.56

4.82

 

Average Order Value by Traffic Source

Q2 2012

Q3 2012

Q4 2012

Q1 2013

Q2 2013

Search

$ 103.00

$ 101.63

$ 110.12

$ 104.46

$ 111.18

Email

$ 89.43

$ 86.43

$ 102.74

$95.27

$ 99.93

Social

$ 75.82

$ 75.23

$ 79.61

$ 76.59

$ 86.80

 Apparently the share of Social Media Referrals from the above observations is disappointing. This is mainly because of the inefficient use of the platform by the marketers. Let us now see the feasible options which can be used in increasing the share of Social Media which is considered to be a huge platform of opportunity for businesses.

Consider the social share of the website traffic:

CHART3Soucre: Monetate EQ2 2013

The share of Pinterest and stumbleupon is increasing. Marketers has to identify this increment in such websites which provide a great opportunity with minor investments .  Marketers has to understand that not all the social media platforms are suitable for every kind of business.  Although Facebook has the highest share, that doesn’t mean that they will get high referrals from it. One has to understand their type of business and the tentative segment of customers who visit the websites. For example, photography  lovers may visit the picture sharing sites like tumblr and instagram. Hence any business relating to photography should try to concentrate in such areas. This is a small example in the context.

Let us take a specific example like Pinterest and try to find its potential in Social Media.

Pinterest provides a great opportunity for both Consumer focused businesses and B2B businesses. Pinterest will be a viable marketing medium in the coming days. About 48.7 million Pinterest registered members browse and re-pin the interested content by spending more than an hour on the website. Referrals from Pinterest spend 70% more than any other social network.

Consider the following types of products:

CHART3

Source : Pinterest stats (http://www.pinterest.com/search/?q=pintereststats)

There are enough analytical tools like Pinterest Analytics which is like Facebook Page insights, reach and gives the popular content on the page. Pinalyzer is the official Pinterest analytics tool. This provides pin suggestions and also the important key performance indicators. Pinterest deals with images. Curalate uses advanced image analytics that gives holistic view of the best image content on your website. There can be better strategies to get more traffic from Pinterest.

Creating original and interesting content of the businesses indirectly helps in pushing the visitors to re-pin the post which is similar to share button on Facebook and re-tweet  on twitter. The ads from Pinterest for the users will be relevant and most appropriate. Hence Pinterest would be marketing products the user is actually interested in — and will be improved upon taking the feedback. Using better images that suits the webpages also helps the users to find them appropriate. The tall and longer pictures are mostly preferred than the rectangular images in the ads.

Pinning own products and all the products on the store with visually appealing images also helps in driving more re-pins and hence improve referral traffic. Hence with right efforts at the right place with high quality content will help businesses increase their traffic and also the revenue per customer through Social Commerce.

avinash_ambati

 

 

 

 The author is currently in the final year of MBA at Indian Institute of  Management, Indore.

 

p12avinasha@iimidr.ac.in' Avinash Ambati (3 Posts)

The author is currently in the final year of the MBA programme at Indian Institute of Management, Indore