Sales from social networks still a challenge?

WM Circle Logo

By: Wise Marketer Staff |

Posted on March 24, 2010

Sales from social networks still a challenge?

Driving sales from social networks and mobile commerce platforms will remain a major challenge for marketers, according to the findings of a recent Webloyalty E-tail Strategy Summit in the UK.

Alongside retail and travel brands including bmiBaby, and Asda were research firms Verdict Research and Experian Hitwise, discussing strategies for post-recession e-tail success, with multichannel e-tailing emerging as a dominant theme.

According to Martin Child of Webloyalty, "With the e-tail market becoming more mature - and shoppers more savvy - there is a demand for more sophisticated e-tail marketing strategies. It is important to recognise the value that the online channel plays in multichannel marketing, too; it needs to work hard to maximise revenue and play a driving role in supporting the other channels."

At the event, Experian Hitwise presented its statistics on 2009 trends and predictions for 2010. A major finding, and an opportunity for online retailers, is driving traffic from social media. With only 7.51% of all traffic to transactional sites currently coming from social networking web sites and forums (compared to 40.87% of all traffic coming from search engines), there appears to be a significant opportunity for increasing traffic.

Robin Goad, research director for Experian Hitwise, explained: "While search engines are still the key driver of traffic for transactional sites, a clear opportunity for retailers lies in increasing traffic from social media sites. A handful of retailers are ahead of the curve with this, particularly in the fashion and entertainment sectors, but many others are missing a trick and therefore potential untapped revenue."

Indeed, the company's statistics show that both Music e-tailers and Video and Games e-tailers receive some 8.9%, and Apparel and Accessories e-tailers receive 8% of their traffic from social networks. These sectors are the leaders compared to House & Garden e-tailers, for example, who receive only 3.5% of their traffic from social networks.

The online travel sector is also beginning to recognise the potential for growth through the social media channel. According to Ian Stewart, head of e-commerce for bmiBaby, currently 4% of the airline's web traffic is driven by social media, and the company sees "huge potential" for this figure to increase in the near future.

Some e-tailers are also actively researching m-commerce as an additional channel. One of the e-tailers that has taken advantage of the mobile commerce channel is, which launched a free iPhone app in October 2009. Since then, the app has been downloaded more than 400,000 times. Although the app is currently only informational (not transactional), the company reported that it has become a key driver of both sales and customer loyalty.

Apart from retailers, customers are increasingly becoming more "multichannel minded" too, according to Goad: "One of the finest recent examples of multichannel retailing was the 2009 post-Christmas sales peak. There was a very obvious spike in searches for sales and bargains online, with people using the online channel to inform their decisions about high street purchases."

Experian Hitwise found that, on 26th December 2009, 14.54% of all online searches containing the word "sale" were for the retailer Next, and 3.69% for Debenhams. However, online-only retailers saw a significant drop in web site visits a few days before Christmas, continuing well beyond Christmas.

At the summit, Verdict Research also presented ten key trends governing e-tail success in 2010, with key findings including the conclusion that retailers "will have to work much harder just to stand still". In terms of online spending, Verdict predicted an annual growth of ony 11% from 2010 onward, compared to almost 30% before 2009. Neil Saunders, consulting director for Verdict Research, explained: "With the growth of new customers levelling off, it becomes increasingly important to change marketing strategies to focus on growing loyalty and increasing repeat visits rather than acquiring new customers."

Verdict predicts that one of the remaining growth opportunities will lie with what it calls "channel blind customers" (who use traditional channels such as online, stores, catalogues and phone, and then combine them with emerging channels such as social media, affiliates, kiosks and mobiles).

More Info: