By James Scott, MD EMEA at ChannelAdvisor
Since the launch of Facebook brand pages back in 2007, Facebook commerce has been growing steadily in value, but is now about to explode. Analysts have estimated that social commerce — with Facebook as the primary driver — will be worth $30bn by 2015, growing at a staggering rate from $5bn in 2011. Considering we are just two years down the road from the world’s first transaction on Facebook (a $34 bunch of flowers bought from 1-800-Flowers), this growth is quite phenomenal.
Last year, Facebook founder Mark Zuckerberg predicted this would be the case, saying: “If I had to guess, social commerce is the next area to really blow up.”
The stats speak for themselves. Facebook has around 750 million users worldwide, with over 250 million active mobile users. Of these users, 56% have clicked through to a retailer’s website because of a friend’s Facebook post.
Furthermore, 67% of shoppers spend more online after receiving recommendations from their online friends. This is key for retailers because Facebook users are interacting with friends all over the world, which, when it comes to online shopping, can be incredibly valuable for retailers.
Shopping is a social experience, from the days of home selling parties where groups would gather round a neighbour’s house, to the groups of friends and families you can see on any high street. With retail increasingly moving online, Facebook is looking for new ways to bring these social experiences into the world of e-commerce — and it seems to be succeeding.
Social tactics can be hugely valuable for retailers since consumers are much more likely to purchase a product if a friend has recommended it on Facebook. In fact, 90% of consumers trust recommendations from people they know. An example of this is Ticketmaster, who recently revealed that on average a link to one of their events shared on Facebook is worth $5.30.
Merchants need to be part of this movement and increase the channels they sell through to include Facebook. Research conducted at the recent ChannelAdvisor Catalyst 2011 conference in London found that 87% of firms are looking to increase the number of online channels that they sell through within the next three years. Encouragingly, our research found that social commerce is becoming more widely adopted, with 40% of retailers currently active on Facebook.
Already, one in five retailers (21%) see social networking as a sales channel in its own right, and the majority are using social media as a tool for marketing (64%) and community engagement (32%).
While Facebook offers ads and sponsored stories, the tool that has rapidly become the most important for online retailers is the ‘Like’ button. When a user clicks on the Like button, it shows up on their Facebook profile and on their friends’ news feeds, whether the Like button is hosted on Facebook or on a retailers’ website. It also allows the retailer to send messages to the user in the future.
First launched around a year ago, the Like button is already hosted on over 2.5 million websites globally and has quickly become a vital tool for building brand awareness online.
Over the next few years, we expect to see Like-influenced e-commerce become more and more influential in purchasing trends. The Like button is as powerful an indicator of intent as search is, but is also more personal and social, bringing the shopping experience closer to the consumer.
Facebook has also recently released the Send button, which allows a user to privately send a link to friends — both on and off Facebook. Send is another integration point for retailers to consider. If you have a Like button, there’s really no reason you shouldn’t offer a Send button as well for those users that may want to forward your product, offer or content to selected friends (on or off Facebook) in a more private setting. On the whole it creates more conversation about your brand.
While the world of social commerce might seem daunting at first, it is now, while the best practices for exploiting sites such as Facebook are still being developed, that retailers should be looking to get ahead of the competition by embracing these new platforms. Of course, you don’t need to go it alone. There is an abundance of help and support out there and, by researching thoroughly, engaging with experts and making use of online tools, it is possible to maximise your investment while significantly reducing the work required to start driving sales.