Does social media really make a difference in sales?
Davis
I'm a big fan of social media. I'm on Facebook countless times per day, sharing photos, making snarky comments and reading interesting articles that pop up in my feed. I peruse Twitter for the latest headlines and a few laughs. I tap into LinkedIn when I need sources for articles or when I need reviews for business services.
So I was a little taken aback when I started reading the “Holiday 2013 E-Commerce Recap” produced by New York-based Custora, an ecommerce analytics company.
Much of the report, which was pulled from ecommerce data from 100 U.S. retailers, is pretty much what you'd expect. Holiday online retail sales grew 12 percent year over year in the United States, according to the recap. Mobile, the report says, was incredibly strong during the 2013 holiday season. Nearly one in three online purchases were from a mobile device (either a phone or a tablet).
The surprising part came when the report looked at how customers were finding the goods they wanted to buy online. More than one in four (26 percent), according to Custora, came via organic search, meaning they typed a phrase into a search engine (say “flat screen TV”), then clicked through and purchased a product based on their search results. Paid search and email marketing were neck and neck for second place, driving 15 and 16 percent of sales, respectively.
Way down at the bottom of the list, almost too small to mention, was social media, which drove just 2 percent of online holiday sales.
That's the part that shocked me. How could social media, which is all anyone in the tech world can talk about, and which has driven some of the biggest IPOs in recent years, account for only 2 percent of online sales?
I may have been surprised, but Jessica Bettencourt, president of Klem's in Spencer, was not. Klem's has a 75,000-square-foot store that sells everything from clothing to tractors, but also has an online store at Klemsonline.com.
“Social media is what it is,” Bettencourt said. “It's social. If you were out to dinner and your friend started selling you something, you'd say 'Please export me to someplace else.' Social media is a place where people don't want to be sold to.”
Corey Pierson, co-founder of Custora, echoed Bettencourt's sentiments, but stressed “it's too early to write off social altogether.”
While people aren't clicking directly from a Facebook ad to buy, they're spending a lot of time there. That means it's still a good place to connect with consumers. Most companies use Facebook for branding, which means it “may be affecting consumers a littler earlier in the process,” he said.
That's been the experience for Klem's. The store's Facebook page is just a few shy of 12,000 followers and it's an active page. It's just not focused on driving sales.
“It's another way to touch and talk to your customer,” Bettencourt said. For example, she said Klem's is approaching trade show season, when her team goes out to shows to see what new products are on the market. She'll put a query out on the Klem's Facebook page asking the store's followers what types of products they're looking for.
But it can help drive revenue
Bettencourt said there have been times when the Facebook page has generated in-store sales. The best example? A simple photo of flower pots covered with glow-in-the-dark paint. That one picture drove a lot of customer interest and elevated a product that they had only sold a few units of into a big in-store seller. The key, in that case, seemed to be the retailer's intention.
“We weren't explicitly selling this paint,” she said. “We were just saying, 'Look at this really cool idea.' ”
While Google is driving the majority of sales, Pierson said he wouldn't rule out the potential growth in importance of Facebook and other social media outlets when it comes to ecommerce. He predicted there will be more innovation from social media sites like Facebook and Twitter to help improve retailers' results. When that happens, social media may drive more than 2 percent of online sales. “I think we'll see that number increase,” he said. “I don't know if it will ever get as big as Google, but it's going to grow.”
Christina Davis can be reached at cdavis@wbjournal.com.
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