A new study, conducted between January and March 2016, which analyzed $100B in sales data among 500 million shoppers found that only 1.5% of retailers last click e-commerce transactions came via social media. This study confirms what we heard in class; specifically, social media marketing is something that brands need to do but whether the social media marketing messages can be directly translated into sales is questionable and difficult to measure. Within the 1.5%, Facebook was responsible for most of the sales totaling 81% while Pinterest had 10.8% and Instagram, YouTube and Twitter collectively generated 5.2%. Of course, this does not take into account ads posted on social media that motivated a consumer to make an in store purchase. Still, the small percentage of last click transactions coming from social media should be alarming to retailers.
Other digital marketing methods like search and email marketing dominated 70% of retail transactions in the study, while another 20% of sales were simply impulse purchases. The remaining 10% was the result of long-tail methods such as display ads, text messages and push notifications. Michael Scheiner, Vice President of Marketing and Communications at Abercrombie & Fitch was not discouraged by the study. A&F is an aggressive user of social media marketing with its largely millennial customer base. Said Scheiner: "We're not as concerned about 'Did they see a piece of content and immediately go to the website?' as we are about 'Did they have a good experience with the brand? Was it interesting to them?'. Of course, there is an aspect of clicking to the site, but it's a smaller percent than other platforms."
More than sales generation, social media's impact on branding is what is keeping retailers in the game. At Macy's, social stats around engagement and awareness are used in targeting consumers with digital ads via other platforms. Serena Potter, Vice President of Digital Strategy explained "When we think about social, we can't always measure direct, last-click [sales], so we look at a variety of metrics in addition to ROI. As we look at the platforms from a customer-behavior perspective, we've really been able to drive traffic to our website, to our mobile experience to create a re-marketable audience."
With algorithm changes coming to Instagram and Twitter, other retailers could learn from Macy's and increase their social media budgets with paid ads, making social commerce a harder space for brands to play in, observers say. In the case of Instagram in particular, Mark Aikman, GM of Marketing Services at Mercedes-Benz USA, regularly sees organic posts attract tens of thousands of likes and shares within hours. "It's important to create original content and not recycle images and videos," he explained. Aikman said his team approaches Instagram as a branding platform and Facebook as more of a direct-response channel. For example, the automaker's campaign around last month's New York International Auto Show used 15-second clips on Instagram and longer-form video on Facebook.
Then, there is Pinterest. Unlike Facebook, Instagram and Twitter, Pinterest is typically used as a research tool consumers turn to for future purchases. Since it debuted buy buttons last June, more than 10,000 merchants have set up more than 60 million "buyable pins." But because the bulk of posts clicked on are saved by consumers for purchases down the road, marketers often have no way of knowing whether particular content drove an immediate sale. Many marketers, however, seem less concerned about last-click analysis and more focused on long-term effect—which is good news for social media platforms, at least for now.
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