The emergence of a new wave of 'buy' buttons will help social media platforms like Facebook and Pinterest become game changers in the eyes of retailers—they will greatly increase the 1.5 percent of web traffic now flowing from social to merchants.
Buy buttons are designed to speed the purchase decision by targeting buyers where they see the promotion, and instantly allows them to buy from the location where they're typically browsing, said Jirafe CEO Amit Shah. Buy buttons provide proactive analytics for e-commerce merchants.
"We believe that the wave of buy buttons will gain share from traditional forms of advertising due to their ability to target, to get much closer to intent-based medium, and to instantly convert customers," he said.
By allowing merchants to put a buy button in a post, it simplifies a number of steps consumers have to go through to complete a transaction. "With less steps, there is less chance for consumers to fall out of the funnel and to change their minds," Shah said.
The growth of mobile devices and smartphones has impacted the way people interact with social media and e-commerce. Social buying is increasing year over year and consumers are recognizing social media as a means for product discovery, to find promotions and to learn more about products through social channels. E-commerce purchases via the smartphone are on the rise, according to Shah.
In a report released this month, Jirafe looked at conversion information from 80,000 merchants, and studied key performance indicators that recorded average spend, conversion rates, traffic, total orders and total revenue driven by social media. Facebook is the dominant platform, driving 96.9 percent of social media product orders, followed by Pinterest with 3 percent. Shah said YouTube will become a significant factor in the future, benefitting from the Google ad network.
Facebook visitors have been spending 3.5 times more than the average visitor to Pinterest, based on the study. Facebook traffic converts 17 percent better than Pinterest visitors. But even with the higher conversion rate, social sources across a network are still converting at less than 1 percent, Shah said.
Facebook drives greater traffic to merchants' sites on the Jirafe network at an 8-to-1 ratio. Facebook is driving about 23 times more orders than we currently see coming from Pinterest. In terms of dollars, Jirafe is now seeing a $32 to $1 ratio between Facebook and Pinterest.
Social media advertising has advantages over traditional advertising that are going to increase its popularity for retailers. These include a clear connection between action and intent; the ability for flexible scheduling and personalization; ads that can be adjusted based on trending topics overall and within a network; the demonstration of social proof, or what people in a network are buying or considering buying; and, lastly, the instant conversion impact of the buy buttons.
To take advantage of social media, Shah suggests several tactics:
Create a unique social experience. Offer exclusive products or advance sales via a social buy button in your social ads. This tactic can increase a company's following in social channels.
Connect one-on-one with customers. Adding personalization to social efforts is the best way to keep customers coming back. It offers the benefit of greater consumer engagement and following.
Use social proof. Social proof generates a greater following with authenticity and integrity. Develop brand ambassadors and have them share content on the social channels, and then integrate that content into the company's website.
Enable social sharing. Ensure customers can share easily from the web and across social. Social sharing is a way to judge the success of a marketing campaign, create a positive network effect and get greater benefit from each marketing action.
Do demographic targeting. With the new buy buttons entering the ecosystem, demographic targeting is going to be even more relevant to brands. As an example, Ace Hardware recently ran a campaign to increase social engagement by using unique ads to target different demographics.
Leverage data. Merchants should be able to leverage their data to know customer lifetime value by marketing channel, and which products convert the best on websites and can lead social campaigns. Data can also show which catalog products are trending so a company can capitalize on seasonal or market trends. Lastly, data tells which products sell well on discount to determine what lower-price products to promote, encouraging impulse buys and moving inventory.
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