Social commerce key to the e-retail future
Retailers and brands that embrace reviews and recommendations into their online retail strategy see a sales uplift of some 18% - worth a potential £8 billion to UK retailers on top of the country's existing £44 billion worth of annual e-retail sales, according to a study by European social commerce company Reevoo.
Perhaps more worryingly for those brands that have not yet formed a social commerce strategy, the predicted 18% uplift in sales for retailers that have done so would translate into a 20% decline in market share for those that have not.
Of the 18% total uplift, 11% is due to conversion improvements, 5% to increased average order value and a further 2% to repeat visitor uplift. The study found that, when reviews are read by consumers:
- Conversion rates increase by 177%;
- Average product purchase value almost doubles;
- Visitor return rates rise by 13%.
Richard Anson, CEO and co-founder of Reevoo, said: "Social commerce should now be a core strategy for every retailer, one discussed right at the top of the company - or it will, eventually, have serious consequences for the bottom line. With average disposable income likely to become tighter and tighter, there is no room in anyone's wallet for buyer's remorse; people will increasingly adopt a buying process that minimises the likelihood of such regrets."
According to Anson, the magnitude of the sums of money involved makes it essential that retailers start to regard ratings and reviews from social and other online platforms as an essential and strategic part of their e-commerce strategy. There is an opportunity for a radical change in the mindsets of retail marketing directors and boards, through a decision to put trusted reviews at the centre of their marketing strategy rather than bolt it on as an afterthought.
Reevoo's findings and recommendations have been published in a white paper entitled 'The Six Essentials of Social Commerce', which explains common mistakes and how to avoid them (such as opening up an online retail site to invalid or fraudulent reviews, limiting review volume or confining content to too few locations, and even blocking reviews perceived as negative, irreparably damaging consumer trust in the site's brand). The complete paper has been made available for free download from Reevoo's web site - click here (free registration required).