Within a few weeks of each other both Facebook and Twitter have shown that they’re looking at new ways to monetise their channels. Images have cropped up online of ‘Buy now’ buttons embedded in posts and tweets designed to enable users to purchase products without leaving their social network.
‘Buy now’ motivation at first glance…
The most obvious reason for Facebook and Twitter to introduce these measures is to increase revenue streams. Both companies are tapping into a huge eCommerce market, which according to eMarketer will this year amount to $304bn in the US alone. They also point out that 37% of digital advertising budgets will be focused on mobile which is a strong area for social media.
Both platforms have been under pressure from stock markets to respond to concerns about how monetisation could be implemented. These moves are clearly going to illustrate the ability to drive advertising revenues.
How will ‘Buy now’ affect digital marketers?
Facebook and Twitter are cementing their position with digital marketers. Advertisers will benefit from being able to simplify the purchase process and influence consumers at the point of purchase. Social media also adds into the mix the key element for many brands – peer pressure. Many consumers already engage with brands on Facebook and this reinforces that interaction.
- Social commerce ‘reduces friction’ in the buying process by decreasing the number of clicks required, and the time. Marketers will no longer have to rely on consumers maintaining their resolve to buy while going to another site to complete the purchase.
- Placing your selling capability on a high traffic site reflects the old adage that ‘location is everything’. In the digital age, moving your point of purchase to the social media thoroughfare makes sense.
- Facebook is able to provide rich data on its huge user base. The information is all the more valuable when those users are directly able to purchase.
How does ‘Buy now’ affect all brands regardless of whether they use these buttons?
Your particular product may not benefit from ‘Buy now’ buttons but you need to recognise the idea driving their introduction – reducing friction in the purchase process. Consumers are going to expect increasingly seamless transactions: this is an aspect to be considered at all stages of the purchase process, not just the ‘buy now’ finale.
It’s unlikely that Facebook or Twitter could ever transform themselves from a social channel to a shopping network; their users visit simply to check personal news, engage with friends and check updates. Purchases are likely to revolve around impulse buys and products where no comparison is necessary. This may be most suited to well-known brands with existing consumer trust and which require little additional information in the purchase process. Facebook and Twitter are not aiming to become a buying destination with all the product information and tools that entails.
The most important effect of social commerce will be to boost engagement among users by giving them another reason to stay on the site. The result of this will be a more engaged audience for all brands. In this respect social commerce is not an attempt to emulate established online retailers such as Amazon whose main purpose is retail; the social aspect is much more important.
A pattern of inroads into social commerce
In 2012 Facebook launched a feature called Gifts to enable users to send each other physical gifts, so taking advantage of seasonal and birthday buying. However the feature was shut down after less than a year. As such the ‘buy now’ button is a less direct involvement for Facebook in the purchase process.
Earlier this year Twitter announced that users could add products to their Amazon shopping cart simply by replying to tweets with the hashtag ‘#AmazonCart’, though they still had to visit Amazon to pay for the product. We’ve recently seen Coca-Cola allowing people to send Cokes via Twitter and last year Starbucks launched a similar Tweet-A-Coffee programme. These physical embodiments of social commerce have the capacity to spark the interest of users; so they work as promotional ventures but they may not provide the right model for continued purchases.
So what’s next?
Pinterest has the potential to play a greater role in this market than the other social platforms; its prime function is a social bookmarking service focused largely around consumer goods. However it has further to develop than both Facebook and Twitter as advertising didn’t even exist on Pinterest till earlier this year. As a result of this late start Pinterest may be able to learn from their mistakes and successes, and when it does move it should be able to do so decisively.
The most significant impact of social commerce for most businesses will be the increase in engagement produced for all brands on social media. It may still not be the ideal location to complete a purchase for every product and every brand. What it does is reaffirm social media’s role as the place where consumers congregate and interact with brands. And this happens regardless of the point that a consumer is sitting at in the purchase funnel.
How might these buttons affect you? Tell me in the comments.
- Why Facebook and Twitter Are Embracing Ecommerce – www.mashable.com
- Why Twitter’s Buy-Now Button Won’t Be a Gravy Train for Brands – www.adage.com