advertisement
advertisement
advertisement

Frustration: Thy Name Is Social

Written by Evan Schuman
September 27th, 2011

Shoppers going to E-tail sites from Facebook and Twitter are much less likely to make purchases; but when they do make a purchase, it is sharply higher from these social network referrals than from other types of referrals, according to a recent report. Those Twitter purchasers also seem willing to pay more for the same merchandise. This apparent contradiction—actually, it’s more of a nuanced distinction than a real contradiction—is interesting as much from a “what do we do about that?” perspective as from a “is this really valid?” take.

The simplest way for a site to guess whether another site is influencing purchases is to review referral link logs, to see where customers were right before. That method, however, doesn’t make much sense with many social sites. A Twitter visitor, for example, will likely click on a link to read the reviews/photos/thoughts of a Twitter connection, and only after that—and perhaps one or two more links—will the customer visit the retailer’s site.

The report, from an E-Commerce vendor called RichRelevance, is interesting in that its methodology appears mostly valid and it tackled questions that most others sidestep. That said, the E-Commerce influence of social media sites—especially one as narrowly focused as Twitter—has always been next to impossible to quantify.

Given that a retailer’s goal is to understand what is causing its sales, limiting the analysis to direct visits is unwise. Coupling this detail with the study’s conclusion that the identifiable Twitter activity was sharply higher, should demonstrate that the social value is likely being dramatically underestimated.

Let’s look at the numbers. Referral percentages ranged wildly, from Google being responsible for 80.62 percent of E-Commerce traffic to Twitter leading to 0.02 percent of traffic—that’s two one-hundredths of a percent. In between were Yahoo (9.67 percent), Bing (7.45 percent), AOL (1.74 percent) and Facebook (one half of one percent).

You really have to look at those social figures—especially Facebook—and wonder if they could possibly reflect reality, particularly in the teenage and youthful shopper segment. Referrals and testimonials from friends can have a huge impact on purchases.

When looking at how much those referred consumers spend—the average order value (AOV)—things get even more interesting. Here’s how the dollars change when looking at those same six referrers: Google is the lowest (AOV $100.16) and Twitter is the highest ($121.33), with the in-between players of Facebook ($102.59), Bing ($104.62), Yahoo ($105.13) and AOL ($105.27) showing just about zero correlation between “who sends the most” and “who brings in the most money.”


advertisement

Comments are closed.

Newsletters

StorefrontBacktalk delivers the latest retail technology news & analysis. Join more than 60,000 retail IT leaders who subscribe to our free weekly email. Sign up today!
advertisement

Most Recent Comments

Why Did Gonzales Hackers Like European Cards So Much Better?

I am still unclear about the core point here-- why higher value of European cards. Supply and demand, yes, makes sense. But the fact that the cards were chip and pin (EMV) should make them less valuable because that demonstrably reduces the ability to use them fraudulently. Did the author mean that the chip and pin cards could be used in a country where EMV is not implemented--the US--and this mis-match make it easier to us them since the issuing banks may not have as robust anti-fraud controls as non-EMV banks because they assumed EMV would do the fraud prevention for them Read more...
Two possible reasons that I can think of and have seen in the past - 1) Cards issued by European banks when used online cross border don't usually support AVS checks. So, when a European card is used with a billing address that's in the US, an ecom merchant wouldn't necessarily know that the shipping zip code doesn't match the billing code. 2) Also, in offline chip countries the card determines whether or not a transaction is approved, not the issuer. In my experience, European issuers haven't developed the same checks on authorization requests as US issuers. So, these cards might be more valuable because they are more likely to get approved. Read more...
A smart card slot in terminals doesn't mean there is a reader or that the reader is activated. Then, activated reader or not, the U.S. processors don't have apps certified or ready to load into those terminals to accept and process smart card transactions just yet. Don't get your card(t) before the terminal (horse). Read more...
The marketplace does speak. More fraud capacity translates to higher value for the stolen data. Because nearly 100% of all US transactions are authorized online in real time, we have less fraud regardless of whether the card is Magstripe only or chip and PIn. Hence, $10 prices for US cards vs $25 for the European counterparts. Read more...
@David True. The European cards have both an EMV chip AND a mag stripe. Europeans may generally use the chip for their transactions, but the insecure stripe remains vulnerable to skimming, whether it be from a false front on an ATM or a dishonest waiter with a handheld skimmer. If their stripe is skimmed, the track data can still be cloned and used fraudulently in the United States. If European banks only detect fraud from 9-5 GMT, that might explain why American criminals prefer them over American bank issued cards, who have fraud detection in place 24x7. Read more...

StorefrontBacktalk
Our apologies. Due to legal and security copyright issues, we can't facilitate the printing of Premium Content. If you absolutely need a hard copy, please contact customer service.