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Social Media E-Commerce: Just Because It Can’t Be Measured Doesn’t Mean It Doesn’t Exist

Written by Evan Schuman
January 21st, 2010

The disruptive potential for social media and E-Commerce is huge, literally because it allows for so many—and ostensibly credible—connections that simply weren’t viable 10 years ago. The influence on purchases is vast. But those influenced purchases are indirect, which drives marketers crazy because they can’t be easily quantified. (Note: This scores social media two very well-deserved honors: Driving lots of sales and driving marketers mad. The first accolade is more profitable, but the second is more fun to watch.)

What brings up this topic is a maddening news release issued by a customization vendor called ChoiceStream. In reporting its own survey, ChoiceStream concluded that “consumers are not as interested in shopping when engaged with social networks. The survey found that while M-Commerce is a hot spot for recommendations in 2010, social networking is not. Of the respondents who belong to a social networking site, only 8.5 percent report that they have ever made a purchase while on the site. And only 27 percent indicate any interest in product recommendations from trusted retailers.”

That so misses the whole point of social networks and E-Commerce. The way it’s supposed to work is: Several friends discuss their lives, work and whatnot on, let’s say, Facebook. One participant starts discussing some clothes she purchased yesterday and how much she loves them. She posts pictures of the clothes and perhaps even a video of herself wearing them. Her friends are hooked, and they want the same pieces.

But instead of clicking right there—the E-Commerce expectation—the friends click away to their favorite E-Commerce sites, be they Amazon, Macys.com, Nordstrom.com or anywhere else, and make their purchases there. The site that gets the transaction see the trail—they’ll notice a lot of referral traffic from a specific and deep Facebook URL—but neither Facebook nor, certainly, a retailer or manufacturer lurking in the online shadows will.

Related Story: Social Unstructured Data Not Unusable

The ChoiceStream comment takes the leap from “they didn’t make the purchase on the social site” to “consumers are not as interested in shopping when engaged with social networks.” Au contraire, you quintessential E-Commerce laissez faire. (Do we get extra points for rhyming in French?) In this case, though, laissez faire means that we shouldn’t interfere in the natural way of a social networking site. Leave them alone, and they’ll produce wonderful sales. But fill the pages with manufacturer and retail links, and you’ll undermine the credible atmosphere that facilitated the purchases in the first place.

You can’t force it, and you can’t track it. Devil’s Advocate question: If it can’t be tracked, how can we be so sure that social media sites are in fact influencing and indirectly causing sales? Ahhh, but it can be tracked. Any E-Commerce directors out there? Check your referral logs and see how many visitors from social sites quickly made substantive purchases.

So here’s a sad-but-true question for all retail marketers. If a tree falls in the forest and no one is around, does it make a sound? Answer: Yes, but only if the tree hadn’t disabled cookies.


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9 Comments | Read Social Media E-Commerce: Just Because It Can’t Be Measured Doesn’t Mean It Doesn’t Exist

  1. Christine Says:

    I’m a bit confused about how you check your referral logs and match that to sales. How would a social site such as Facebook show up in your referral logs if you don’t include links in your posts?

  2. Evan Schuman Says:

    Editor’s Note: If someone comes from a particular domain, it shows up in the referral logs. No link is needed.

  3. Barry Dennis Says:

    Your customers may have multiple choices AND multiple motivation(s) to get to your Online site; for shopping, or for information about your products and services.
    “Never look a gift horse in the mouth.”
    Remember that? It just meant that when a “gift,” a customer, comes your way, be thankful.
    As to helping them find the way to you, be proactive, be helpful, be relationship-oriented.
    Social is a part of a Marketing Strategy, but not for every product or service.
    Knowing that a marketing venue (Social) has lots of “your” customers doesn’t automatically create license to hunt; care must be exercised in the approach, presentation and “close.”
    If word-of-mouth (translate Internet viral) is still the most valuable form of Marketing, then that should be the focus of Social Marketing Strategy.

  4. Lori Trahan Says:

    We could not agree more that the interactions shoppers have with each other on social networks influence their shopping behavior and purchases. What the survey said is that retailers need to think long and hard about the kinds of investments they’re making in social network advertisements and product recommendations. The numbers showed that while some people do happen to make a purchase while engaging in social networks, most are not ready for retailers to push product recommendations at them.

    That’s not to say a purchase isn’t influenced by the things they are seeing from friends, fan sites and brand engagement campaigns. It simply means they don’t want retailers bombarding their pages with links and ads, as is pointed out in the story. It’s our advice to retailers that they not invest in this type of marketing initiative right now, allowing consumers to engage with the brand on their own terms. For 2010, personalized recommendations and promotions are better suited where consumers are looking for them — online and mobile.
    Lori Trahan, VP Marketing, ChoiceStream

  5. Julie Davis Says:

    The key isn’t to bombard consumers where they play, but bring where they play into the shopping experience. Yes, having measurable data (that makes sense) would put the world’s social media nay-sayers to bed, but thats an evolutionary process.

  6. Wanda Cadigan Says:

    I think most would agree that social media already has, and will continue to have a huge impact on e-commerce. Can it be tracked as precisely as we would hope? Not yet.

    However, most retailers have at their disposal a huge assortment of content (traditional merchandising info, UGC, rich media, etc), and the trick to leverage social networks will be to develop a online content management strategy and to match content to the community. It’s all about context…

  7. Gerardo Dada Says:

    If you look at social media in the broader sense, there are many ways to leverage the passion and wisdom of your customers to improve E-commerce. It can be tracked, in fact. This is the whole premise of social commerce: It is about embedding social media in a way that is relevant to the customer – relevant to their interests, their context and their intent (i.e. no one thinks of Facebook when they need to buy a new TV).

  8. Evan Schuman Says:

    On your last point, Gerardo, (people don’t think of Facebook when they need to buy a new TV) I’d disagree. People do indeed think of social media at those times. “I wonder which brand really looks best or which actually works well? Let me see if any of my friends have recently made that kind of a purchase.” Using a large group of friends and associates (and friends of friends) to get hopefully unbiased counsel on a purchase is a very popular use of social sites.

  9. Fabien Tiburce/Compliantia Says:

    I tend to agree with ChoiceStream that most people don’t have a “consumer” mindset when engaged on social networks. In fact some people find the commercialization of social-networks in “poor taste” and a reason to look elsewhere. In my mind etailers need to adjust their sales strategy to the social medium. Inform the customer first, provide links to compare products, read reviews, etc…sales will come.

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