Social networks are fast developing new ways to help consumers buy products directly from their social accounts, as the world of e-commerce moves towards a socially led future. Katie McQuater explores what the hybrid of social commerce means for brands, and whether social networks can ever truly rival Amazon.
As sharing becomes the norm, social networks are incorporating e-commerce features to bring together consumers’ love of social with a love of shopping.
The appeal is obvious. Combining a highly engaged user base with e-commerce capabilities is attractive for brands, but are these evolving features likely to rival the likes of Amazon or remain purely as lucrative acquisition channels?
Most of the major social players have made recent strides in this area in a bid to attract further investment from brands. Facebook has expanded testing of its buy button following a deal with e-commerce platform Shopify, while YouTube has rolled out TrueView for shopping to allow brands to add product listings alongside video ads.
Another notable development in this space has been the recent announcements by Pinterest and Instagram that the visual content sites will add ‘buy button’ functionality. By marrying Pinterest’s active user base – predicted to reach 50 million in the US by next year – with brand partnerships including Macy’s and Nordstrom, the launch of buyable pins has the potential to establish the visual listing site as a shopping destination. The addition of the buy button will enable users to purchase items within the app, rather than directing them towards an e-commerce site. Brands looking to invest in socially led visual marketing may also turn their eye to Instagram, which launched a suite of new buttons including a ‘shop now’ option.
These developments are a natural progression for social networks, according to Shirley Yang, vice-president of social strategy at StyleHaul, a YouTube content network for fashion and beauty.
“It makes sense because social commerce is based on trust, and social networks harness the opinions, reviews and endorsements on brands and products from people we follow. Twitter’s new Product Collections, for example, is betting on that trust; consumers are more likely to be engaged with a curated list of products by someone you follow than with a random brand.
“Social networks also provide multi-way conversations between the brand, the customer, and the greater community. Its user base acts as built-in distribution for brand content. Soon we can look at a brand’s website almost as the product catalogue and the social platform is where the purchasing decisions actually happen.”
The further merging of social media and e-commerce raises questions over e-commerce giants like Amazon. Could these sites see their business rivalled by the likes of Facebook? Not remotely, according to Gideon Lask, chief executive of social commerce technology company Buyapowa, which works with brands including Tesco, O2 and Sony.
According to Lask, social is a mindset rather than a destination, and brands should focus their efforts on tapping into consumer connectivity through social.
“Affiliate traffic has always driven between 10 and 20 per cent of a retailer’s traffic and I think what’s happening with the likes of Instagram and Pinterest is just a morphing of that affiliate traffic from other content sites to these new visual oriented content sites.
“We now spend 80 per cent of our non-work online time being social – we are connected to people. We are minded to share, so how does a retailer tap into that connectivity mindset? Simply putting a buy button on a Pinterest page or an Instagram feed doesn’t do that remotely.”
Consumer behaviour may also lag the networks’ developments in this area, as buying directly from a social platform may create trust issues for consumers, who are used to purchasing from established e-commerce sites.
Social networks should stay true to their purpose, according to Stuart McLennan, head of paid social at iProspect, who doesn’t see them rivalling Amazon anytime soon. “That’s not to say they are not strong platforms from an e-commerce perspective. We’ve seen some really strong results from this channel with a wide range of brands. I don’t think they’ll be in direct competition with the retailers, rather they’re a window to the retailers.”
The agency recently worked with one of its clients, a fashion brand, to trial Twitter’s ‘buy it now’ functionality, which showed that the cost per sale for buying directly from the social platform was very high. “The trial suggested to me that there is a reluctance from the consumer to buy direct from the platform. They want to go to the e-commerce site and browse,” adds McLennan.
One social network circumventing this issue is The Net Set, Net-a-Porter’s social shopping app, which allows consumers and brands to upload and share content which is then available to purchase, via a couple of clicks, through Net-a-Porter’s e-commerce infrastructure. The app uses image recognition technology to scan uploaded content and then display items from Net-a-Porter that most represent that image, making the content shoppable.
According to Sarah Watson, vice-president of social commerce at Net-a-Porter, social networks looking to harness the power of e-commerce will either need to partner with an e-commerce player, or create their own.
“What social networks have is the audience and they’ve built the community, and what retailers have is the e-commerce infrastructure. We’re coming at it from the other angle – we already have the e-commerce infrastructure and we’re just building the social layer on the top.”
With social platforms developing products geared towards driving e-commerce sales, it’s clear they see value in helping advertisers drive revenue. From an expertise perspective, the merging of the two channels also creates a need for better education within agency teams and social media managers.
As social becomes a serious contender in e-commerce terms, its previous perceptions need to be overcome for social commerce success to prevail, according to Lask.
“If social is looked after by brand creative people it’s just written off as something fluffy and if the trading people look after it, it’s just used as a hard acquisition channel,” says Lask. “And actually it’s a hybrid, just as email was a hybrid.”
This feature was first published in the 22 July issue of The Drum.