This was first published in #TheFutureByDesign. Click here to download the publication with insights from leading marketing, creative and advertising minds.
E-commerce is a US$220-billion industry, with growth of almost 20% per year. As more people access the internet on mobile devices, the trend is towards making mobile purchases — so-called ‘m-commerce’. For marketers to reach these customers, there is a channel that is wide open for development: social media.
It’s been a long time coming. Two of the world’s social media giants, Facebook and Twitter, began rolling out beta versions of a ‘buy button’ in late 2014, laying the foundations for greater e-commerce and social media integration in 2015.
Facebook and Twitter are banking on convenience, impulse buying, once-off promotions on fleeting trends and limited products. And why not? People post ill-advised and impulsive content all the time on social media – what’s to say they wouldn’t make ill-advised or impulsive purchases just as easily?
The concept is simple: manipulate people into buying things quickly and with ease from the comfort of their News Feed. Users simply enter their payment info and email address, and then are able to buy any offers that pop up on their feed with just one or two clicks, without ever having to leave the page. Once the purchase is entered and confirmed, the information is sent to a merchant for delivery.
According to Lou Kerner, a social media analyst and investor at The Social Internet Fund, it’s a great strategy, especially for the likes of Twitter, because it doesn’t force people to change the way they use the platform. “Twitter is about what’s happening right now, and so as long as e-commerce follows that approach, using sales with a short lifespan or that offer a limited number of items, it should work extremely well,” says Kerner in an article featured on Internet Retailer.
What this all entails is that the ritual of buying becomes simplified and convenient. Time and convenience is everything to the millennial consumer. Imagine sitting at a bar with a group of friends, having a chat, whilst rails and shelves of clothes, tech products, home appliances or whatever you want, shuffle past you (complete with price tags) in between your conversations. Social Media shopping is a lot like that – the convenience of interacting with your social community and shopping at the same time.
The hope is that e-commerce becomes a significant revenue driver, but it’s not all too clear yet where the revenue will come from. For example, Twitter will be exploring and testing several different revenue models in the beta phase.
Benefit for merchants
The ‘buy button’ acts as a clear call to action, with pressure to act quickly on fleeting offers on a platform that has as an already captive and receptive audience. Thus, the ‘buy button’ makes redundant a problem that all retailers face: how to get consumers into the store.
Benefits for advertisers
A ‘buy button’ is also great news for marketers and advertisers, in that it could (and should) be able to display concrete revenue figures in relation to specific social media purchase messages. In other words, a direct correlation between ROI and social media ad spend.
Benefits for consumers
Besides the obvious convenience, will consumers buy in to the ‘buy button’? There’s no simple answer to this. Firstly, there’s the security factor. Is your personal data safe; or will Facebook’s or Twitter’s data archives be the victim of the next big data leak? 2014 saw a spike in data security paranoia and has taken centre stage with consumers.
From mass data leaks at Target to the notorious hacking of Sony; social media data security has become paramount. In a blog post announcing the new ‘buy button’ test, Facebook declared that none of the credit card information people share with Facebook will be shared with other advertisers and that people can decide whether or not they’d like to save payment information for future purchases.
Similarly, Twitter declared its intentions to keep consumers’ card information secure, private and safely stored. Secondly, there’s the price bracket. It’s a lot easier to make a R300 purchase than it is to make a R3,000 purchase on a social media platform. So yes, consumers may buy into the ‘buy button’ but perhaps only within a certain price bracket.
Peer influence will presumably play an important role in whether the ‘buy button’ is widely adopted. The social media mob is fickle, easily influenced and susceptible to trends; and so the ability to share a buy button post with followers and friends in real time would potentially validate its use. If a friend recommends or shares a ‘buy button’ post on your timeline, you may be more likely to make a purchase based on your peer’s opinion.
Other social media platforms
Twitter and Facebook may be leading the trend of greater Social Media ecommerce integration, but they’re not the only ones. In 2014, Pinterest announced a ‘Gifts Feed’, which uses Product Pins to show purchase details like pricing, availability, buy links and store location on the pin itself. Although this process is a bit more convoluted than a ‘buy button’ it still marks a step toward greater Social Media Shopping integration.
Although Instagram does not yet boast a click-to-buy feature on its platform, it has enormous potential and opportunity for buying power given the rise of m-commerce. According to a study conducted by L2 Think Tank, Instagram has amassed more than 150 million followers in three years – half the time it took Twitter. It has 15 times more engagement than its parent company, Facebook. It now has 300 million active monthly users, up 100-million from March 2014. It has also begun the process of handing out verified accounts. These verified badges will be for public figures and brands. The badges ‘will make it easier for people to identify and follow the authentic brands they care about,’ says Instagram in a public email.
A visual-based platform, with fast growing traction, coupled with a direct messaging feature, makes Instagram an obvious choice for consumer brands and advertisers, with 93% of prestige brands maintaining a presence on the platform (January 2014).
The advent of the ‘buy button’ has the potential to significantly alter e/m-commerce and social media integration, disrupting the traditional lines of path to purchase as well as significantly altering social networks’ roles in the interaction between consumers and businesses. Marketing as we know it, as well as the ritual of buying, may be changed forever.