The battle of the “buy” buttons is in full swing. With just seven days to go until Christmas, this year is shaping up to be the first festive season that social shopping has taken off — as some of the world’s biggest brands try to hook the connected customer.
From Google and Facebook to Instagram and Pinterest, social networks have been experimenting with various ways of enabling consumers to buy items directly from their platforms, to generate additional revenue streams.
And it appears to be working. According to research by the Internet Retailer website, companies ranked in its Social Media 500 list grew their “social commerce” sales by 26 per cent last year, to $3.3bn.
This race to dominate social shopping is being driven by shoppers’ increasing use of mobile phones in the buying process.
“The smartphone is probably the biggest single tool that people are using for mobile holiday shopping,” says Thom Blischok, chief retail strategist at Strategy&, the consulting arm of PwC. He estimates that about 60 per cent of US shoppers will research products online on their smartphone over the holiday shopping season. And 40-45 per cent will also use their smartphones to contact friends and family via social media about gifts.
Facebook has been testing a “buy” button with partner retailers on the Shopify ecommerce platform, so users can complete a purchase without ever leaving the site. Pinterest, the online scrapbook, also launched a “buy” button this year, partnering with Shopify and retailers who use another platform, Demandware. On the Pinterest site, “buyable pins” on product images include price information and the ability to make secure payments.
Kelly Graziadei, director of global marketing solutions at Facebook, says marketers have two social shopping objectives in the fourth quarter: first, they need to provide tools to boost awareness of their brands and promote specific products; and, second, they must demonstrate that using Facebook can lead to purchases in-store as well as online.
A rapid increase in video content on Facebook — some 8bn videos are now watched every day — has certainly helped retailers lure people to their online stores. So, too, has the opening up of Facebook-owned Instagram to marketers, who are now using the photo-hosting platform to create imagery reminiscent of glossy magazines.
Since last year’s holiday season, Facebook has launched carousel adverts, a series of images that users can swipe to see more of, and dynamic product ads, which help marketers upload entire catalogues of goods.
There are also new formats on Instagram including 30-second videos — the same duration as a television advert.
Target, the US retailer, is now using almost all these formats on Facebook. On Instagram, J Crew, the mid-market fashion retailer, has uploaded its annual gift guide and is using “shop now” ads to speed users towards purchasing.
In the UK, some of the biggest retailers are also encouraging consumers to embrace social shopping — and rewarding them for interacting with their brands online.
“It clearly will be the most impactful social shopping Christmas,” says Patrick Bousquet-Chavanne, director of marketing and international at British retailer Marks and Spencer.
Online retailer Asos, which already connects with its tech-savvy customers on everything from Instagram to Snapchat and Periscope, is taking its engagement one step further, through a new loyalty card. Under the scheme, consumers will be rewarded every time they post a picture of themselves on Instagram in an Asos outfit, and use the hashtag #asseenonme.
Loyalty is no longer just about sales. M&S’s new Sparks card also rewards shoppers on their interaction with the brand, for example through online product reviews. “The more consumers are engaged with us in this digital era, the more valuable they are to M&S,” says Mr Bousquet-Chavanne.
Robert Howard, a US-based digital partner at consultants Kurt Salmon, agrees that consumers are beginning to shop via the social networks. “We are going to see more and more of that over the next several years, as retailers embrace social media as a legitimate commerce channel,” he says. “The social media sites will aim to get a slice of the pie.” At the moment, social media platforms do not take a cut of the sales. However, Mr Howard says: “I suspect that may change as social media sites try to determine how to monetise [social commerce].”
Some analysts, however, believe optimism about the rise of social shopping is misplaced. Scott Galloway, founder of research firm L2 and professor of marketing at New York University’s Stern Business School, expects it will continue to underwhelm because social networks are for social activities, not shopping.
“Social still plays a huge role in retail or a brands’ business, but it’s just not where the actual retailing gets done,” Mr Galloway says. He describes shopping on social media as the equivalent of talking to someone you have just been introduced to, and finding that they try to french kiss you.
“It is moving to a level of intimacy but it’s skipping several steps,” he warns. “It’s skipping dinner and courtship”.
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