Social media's impact on e-commerce is overrated

social media
Traffic and sales from social media remain flat. (Pixabay/LoboStudioHamburg)

Social media's impact on e-commerce has stalled, despite rumors that it is playing a critical role in driving sales. 

According to SalesForce's Q1 Shopping Index, the growth of shoppers using social media channels has been essentially flat since the first quarter of 2017 and represented only 4.7% of all visits to e-commerce sites in the latest quarter. This translates to only 2% of all e-commerce sales. 

"Despite the industry hype around social media playing a critical role in driving traffic in the past few years, results showed us that social media actually stalled in Q1," said Rick Kenney, head of consumer insights, Commerce Cloud at Salesforce. "Social has been an emerging channel, so there’s been an expectation of high growth, but the reality is that traffic share from social to e-commerce sites is stagnant, quarter-over-quarter, and direct contribution to sales is very low."

And by no means does this mean a stall in digital sales, as retailers report a 15% growth in digital revenue for the quarter, even as high as 18% and 19% in the categories of home and luxury apparel, respectively.

Comparing social media to other channels in the first quarter, mobile drove 60% of all e-commerce traffic. And mobile conversion rates grew 14%, with phones accounting for 41% of all orders total. 

So why have social medial sales stalled? Kenney believes it could be consumers growing tired from the overwhelming amount of ads they are experiencing, and; therefore; consumers may be tuning out or scrolling right past shoppable posts.

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"Business owners will have to learn how to adapt and find new ways to engage consumers on social if they want to continue to drive traffic to their e-commerce sites," he said. 

Finally, the report revealed that discounts are still a popular strategy and actually increased by 10%. Free shipping was also a popular offer, as 65% of all orders shipped for free in the first quarter, an 11% increase over the past two years. 

Moving forward, Kenney believes social media will remain static unless there is a major advancement or new technology, but digital commerce and mobile conversion rates will continue to climb. 

"The year-over-year digital revenue growth for retailers speaks for itself, and with phones now accounting for nearly half of all e-commerce orders, we will continue to see mobile's influence on digital commerce grow," he added.