How has social media changed online retailing?

22 May 2016 Omar Budeiri Leave a comment Taggr

For many shoppers, social media is now a primary driver. In a recent global sampling by PwC, 78% of shoppers said that their shopping habits were influenced by social media (up from 68% is 2015).

Consumer views matter now more than ever, and their propensity to share online is constantly growing. As is traffic from online referrals. In fact, online referrals is the fastest growing revenue source for online retailers. This can be attributed to two things:

1. The ubiquity of mobile devices.

2. The culture-shift in the readiness of people to share opinions online.

The most successful online retailers in this environment have managed to link a vibrant online following with a seamless purchasing procedure. Seth Godin has been writing for years about how buying online needs to be seen as a set of stages, all part of a process. That process begins with a share on social media, and ends with the consumer clicking a buy-button.

Even though both Google and Facebook have entered the PLA (Product Listing Ad) market recently, the data on how effective and seamless the process is from social channel to clicking that ‘buy’ button is limited. What we do know, is that retailers need to start investing in this process if they are to compete in the future.

10% of US consumers currently purchase directly through social media. While this doesn’t seem high, it’s significantly higher than last year. Given that 2 in 3 shoppers claim social media influences their purchasing decision, It is only a matter of time before direct purchasing through social media becomes a much more significant process.

Many companies use a ‘one-size-fits-all’ strategy that overlooks customer interaction within their social communities. This simply doesn’t work. The selection of the right channels is the first port of call. Discard the rest. Then, foster transparency and authenticity, and invest time and care into your customers through these channels. Previously, relationships with customers were private, now they are public, and many retailers fail to understand this.

Consumer-shared, user-generated content is now seen as the holy grail of social communities. It helps foster strong customer relationships, but the main takeaway here is that it encourages brand-trust and brand-loyalty far more readily than any billboard, TV ad or radio jingle. Why? Because it’s not created by people trying to take your money. It’s created by your peers. And we trust our peers, as they are less likely to have a concealed motive for giving a positive review or recommendation.

When a retailer goes beyond simply selling, and focuses on providing services that fulfil customer aspirations, based in part, of course, on the data that social media yields, they get a seat at the dinner-table with online communities, and a real insight into their target customer’s demographic and psychographic profile.

This is good branding and good business. And the most successful brands know this.

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