Ecommerce is booming. Recent figures from the US suggest that by 2016 we'll be spending $327 billion a year online, while in China annual internet retail spending now tops $190 billion; that's up 66% year-on-year.
There can be little doubt then of its continued dominance.
The problem is that with so much opportunity investment in the space will accelerate faster than ever, raising the barrier to entry for those looking to gain a larger piece of the pie.
Search marketing is the defacteo route to market for the vast majority of retailers attempting to grow revenues. The question is, however, is; is there a better way? A smarter way to get ahead of the curve and future proof your strategy away from a complete reliance on Google dollar? The answer is undoubtedly 'yes!'
While search offers by far the strongest option at present there can be little doubt that social is catching up fast and as we become more accepting of the commercialisation of the major platforms we create opportunity for monetisation.
If you're in eCommerce, social should absolutely be a consideration when it comes to dividing up your marketing plans. That's not to say social should definitely take a big part of your marketing budgets, it all depends on the brand, the situation, and your return on investment calculations.
Once you've justified investing in social, the key question is, where should we focus?
For e-commerce stores it's largely become a three-horse race between Facebook, Twitter and Pinterest when it comes to where brands should focus. Unfortunately, the likes of Google+, LinkedIn, Instagram and co don't really cut the mustard when it comes to driving online sales right now.
The first thing you need to decide is what are your priorities and goals. For the vast majority of online stores the only goal is driving sales, so your decision is all going to be driven by average order values, conversion rates and ultimately return on investment. Some stores may be focussing more on 'softer' metrics from social, for example brand awareness, however the ultimate goal should always by ROI.
The Rise of Pinterest
For the past year, Pinterest has largely been seen as the social media saviour of e-commerce stores. Pinterest doesn't have the user base of Facebook & Twitter in the UK, but it is fast growing and the users it does have are prime eCommerce targets. With the audience being predominantly female, and of a higher education level generally (anecdotally suggesting higher disposable incomes), brands that fit the audience interest profiles, particularly fashion and lifestyle stores are chomping at the bit to get involved.
A recent Shopify study has found that Pinterest is now level with Twitter when it comes to clickthroughs from social networks to Shopify powered stores. Interestingly, 3.6% of traffic in that study is more than Google+, YouTube, and LinkedIn combined.
The same study also found that orders from Pinterest referrals had the highest average order value at $80, which is double that of referrals from Facebook, and much higher than Twitter.
Pinterest's influence on e-commerce has been wider than just the rise of its network. There has been a Pinterest-ization of the e-commerce experience more generally, with brands even as big as eBay going to a grid look & feel. Imitation is the sincerest form of flattery, and plenty of brands clearly feel Pinterest are doing something right with their user experience. This all plays into Pinterest's hands. Users are already in a semi-shopping mode, looking for ideas and creating boards (acting as wish lists in many cases) - the fact that this experience is now similar to many stores means the mindset is becoming even more purchase focussed.
However, the fundamental issue with Pinterest right now is that there is a lack of control for brands. Unlike with Facebook, brands can't promote their content or their presence in an organised way, meaning that Pinterest can take up a lot of time and effort with low returns.
How about F-Commerce?
Almost every brand fits into Facebook. The main debate for brands over the next few months will be in where they direct their Facebook traffic. There's two main options; sending traffic straight to the e-commerce website itself, or to use an f-commerce app. Intuitively, most brands want to send traffic to their websites, and rightly so as that transition takes the consumer to a buying mode as they are in a purchasing experience on your store. With f-commerce stores, the app with your products is still within the Facebook frame which is still seen as an unnatural area for physically purchasing, however this mentality may change over time, allowing f-commerce to live up to its potential. In the short term though there is evidence that f-commerce apps can work and drive sales, however these need to be properly conversion tested versus the performance of your website to allow you to determine where to send your traffic.
The main advantage of the Facebook platform is the potential of advertising your products in a controlled way. For example, you can show a product post for a hat, and show it to the audience that you've built, but also to a whole new audience who are interested in hats in your target demographic, but have no current connection to your brand. These new users can be shown your product with a link to purchase it in their Newsfeed, alongside content from friends, family, and pages they do like. This gives your product a highly relevant placement that gets a lot of devoted attention and looks natural within the feed.
In terms of engagement, Facebook comes out on top. As the only major player with a defined algorithm (EdgeRank), brands know what they need to do in order to ensure their content is seen by the most relevant members of their audience. With Twitter, where all content is served up from brands users follow, it's almost impossible to cut through the noise. With Facebook, brands can stand out by having consistently engaging content which will mean their messaging will take a higher priority in users Newsfeeds.
Many brands decide to focus their attentions on Twitter. Of the three, Twitter is actually the least suited to e-commerce. As the above Shopify study showed, Twitter is level with Pinterest in terms of e-commerce traffic driving, however with a much larger user base to work from. Combine this with lower average order values and Twitter begins to look like the ugly sister in this equation.
Twitter isn't cut out for shopping
Twitter is largely a news and interest based platform, and is not suited to a shopping experience. The text based nature of the Twitter feed, and the type of content users are expecting to see, means that product or incentive based posts don't stand out and if they do they tend to jar with the rest of the Twitter experience.
The key to choosing which network(s) to focus on and to what extent all comes down to your individual metrics. As a general rule of thumb Facebook & Pinterest are most likely going to work best for you if you're in e-commerce. Facebook works for most brands, whereas Pinterest is more suited to female friendly brands, particularly those selling fashion, home, beauty and lifestyle products. But, which is best for you depends on your return on investment calculations, your target audience and your ability to test, track, optimise, and monetise. The key mantra should always be that you shouldn't invest in something you can't track through, which gives social a distinct advantage, as I previously discussed here.
1. Base your decisions on data: don't go with vanity metrics, or work solely based on your competitors actions. Use your data to test and optimise for what is going to work best for your brand in line with your goals
2. Pinterest is small, but has high average order values: if your brand fits, Pinterest is a great environment where you can get good clickthrough rates and high average order values. However, bear in mind that in the UK Pinterest is still very much in a growth and development stage
3. Facebook gives control: Facebook gives you the most control in terms of driving reach, ensuring engagement, and getting your products in front of a relevant audience at will