Tag Archives: Online shopping

Social and Shopping

How do you think social media influences what people buy?  If you believe a recent report on the influence of social media on shopping this past holiday season, the answer is not much.  As the article said:

online shoppers mostly ignored social channels as purchase influencers,according to survey results from Baynote. Pinterest and Twitter influenced online and in-store purchases for just 1 in 10 shoppers surveyed, with Facebook garnering only slightly more interest. Instead, online ratings and reviews were most likely to influence both online and in-store purchases (33% and 24%, respectively), with Google search results including a pictured product available by the retailer coming in next for online purchases (26%) and paper catalogs (21%) second for in-store purchases. Not surprisingly, social channels were most influential among younger consumers (aged 25-34), while paper catalogs got the attention of the 45+ crowd.

This was accompanied by another piece which announced that “only 2% of traffic to retailers during the holiday season came from social networks, per figures released by Adobe Systems.”   The article then goes on to say “Adobe isn’t the first to detail social media’s rather small influence over the holiday season.”

I could be wrong about this but given that Adobe is the parent company of one of the large analytics firms, I’m assuming they looked for traffic into shopping carts from social media.  Their question – is social media converting into sales – isn’t the right one.  How about “does social media influence sales?”  I’m willing to bet that a large percentage of what’s on Pinterest is aspirational – something the user wants or acknowledges as desirable.  Maybe it’s a place people use to research gifts for friends?   You will have a hard time convincing me, just based on what crosses my Twitter stream and Facebook news feeds, that people aren’t researching purchases via social media.

The Baynote data is a survey – let’s always remember that what people say and what they do sometimes don’t align.  That said, I think taking “catalogs” as a whole while segmenting digital into pieces (search vs. social vs online stores) is a bit misleading.  It also doesn’t reflect how users may begin with a search, move over to social to check out their connections’ thinking on what they’ve found, and then their use of the online store to buy, perhaps several days (and sessions) later.

Given the continuing and impressive growth of online shopping during the last holiday season I’m a believer in social as a influence.  People spend more of their lives online and that includes shopping.  Maybe these folks are asking the wrong questions.  I’m sure they’d have just as hard  time proving that TV or print resulted in the conversions they’re discussing yet very few people deny those media have an impact.  What do you think?

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Love The One You’re With

One of the trends I hear discussed all the time is that of chasing the next shiny object.  As it turns out, that’s not something that occurs solely in the tech space.  A recent study from Adobe – The Adobe Digital Index – shows that online retailers are ignoring the 80/20 rule by ignoring current customers in favor of attracting new ones.  Maybe today’s screed should have been titled “You Always Hurt The One You Love.”  Their summary:

Online retailers spend nearly 80% of their digital marketing budgets acquiring shoppers (new visitors), but does this focus make sense? To find out, Adobe Digital Index analyzed 33 billion visits to 180 online retail website in Europe and the United States from April 2011 to June 2012. Our data indicates retailers should shift spend to returning and repeat purchasers, two existing customer segments that drive a disproportionately high share of revenue, exhibit higher conversion rates, and really step up in the Christmas holiday season and tough economic times. Migrating just 1% of shoppers to returning purchasers could generate as much as $39 million in additional revenue per retailer.

In other words, we’re spending way too much time and money chasing new customers while we ignore a lucrative user base that’s just waiting to be asked to the dance.  40% of revenue for online retailers comes from returning or repeat purchasers, who represent only 8% of all visitors, according to the study.  In other words, you have to attract five to seven shoppers to equal the revenue of one repeat purchaser.

Having run an online retail business I can tell you that the vast majority of our thinking was about attracting and converting new customers.  It wasn’t as if customer service was an afterthought and we did allocate a good deal of our marketing to up-selling our existing customer base.  However, this study opened my eyes to the fact that we probably could have done more with those who’ve already demonstrated a desire for our products and I’ll keep that in mind as I work with clients going forward.  How about you?

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Filed under Helpful Hints, Reality checks

Showrooming

There’s a relatively recent phenomenon called “Showrooming” that’s becoming a concern for retailers.  In a nutshell, this is the practice of some consumers of going into a physical store to do research and then making the purchase elsewhere, generally online.  Given today’s technology, those purchases can even happen in the store via a mobile device.  A piece from eMarketer quoted a couple of studies that found this is not a hypothetical problem for retailers:

Several researchers have surveyed the number of US mobile phone users who have comparison-shopped via phone while in-store. Their research has found a comparison-shopping rate ranging from 59% of US smartphone owners (InsightExpress, 2011) to 25% of US mobile phone owners (Pew Internet and American Life Project, January 2012).

ForeSee Results findings from between 2009 and 2011 are consistent with this trend toward using mobile phones for in-store research; however, in 2011, the shoppers surveyed were more likely to access the website or app of the store they were actually in than a competitor’s website or app. This means that retailers need to not only be concerned about how their pricing stacks up against others’, but also about pricing consistency across their own channels.

This is sort of the same issue faced by music companies who are trying to sell physical media like CD‘s while enabling the purchase of the same product through digital channels.  The retailers need to differentiate themselves in ways that make doing business with them valuable beyond price.  Customer service, ease of returns, unique merchandise or unique offers are all areas that can be differentiators.  Target has reached out to vendors to do just that, and others are as well.

So the question to you today is this:  what are you doing to make sure that your business is different?  We can go back to the old advertising saw of the  Unique Selling Proposition – as we find in this space a lot, everything old really is new again or at least wrapped in new tools.

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Burp Then Buy!

I hope you all enjoyed your Thanksgiving feasts. apparently, a lot of folks ate and ran for their cars – not to get home before Aunt Sally passed out but to the stores to get a head start on their shopping for the next holidays. I was really surprised about how the Thanksgiving Day newspaper had several pounds worth of ads, in many cases for sales that would be over before many of us were getting out of bed on Friday.
One mistake anyone commenting on things can make is to assume that the way in which we see the world is the norm, and so while I’d never ponder running to a store to try to be one of the lucky 10 people who actually can get the $2 waffle iron (hopefully without a dose of pepper spray as occurred in some places), I know others do.  But while retail sales were up vs. a year ago, comScore reported something interesting occurring over the weekend. Continue reading

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Reports

Here, Bremsstrahlung is produced by an electro...
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I have an aversion to reading reports. Weird, right? I’ve written before about how much I read every day and those who’ve worked  with me know that I’m constantly wanting to discuss tidbits of information I’ve found someplace to see if they could move our business forward.  But those tidbits aren’t reports – they’re usually from the web or print publications.  Really useful reports are hard to find and I have a theory as to why. Continue reading

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