Shopping is a social activity. As marketers, we know this instinctively. It's human nature. But measuring the real impact of social on sales is a different story. Social is continuing to grow in importance as a form of digital communication. But what do the latest numbers from the IBM 2013 Holiday Benchmark report say about Thanksgiving and Black Friday retail sales?
For one thing, on average, they show that holiday shoppers referred from Pinterest on Black Friday spent 77 percent more per order than shoppers referred from Facebook. Facebook average order value was $52.30 versus Pinterest average order value, which was $92.51. However, Facebook referrals converted sales at nearly four times the rate of Pinterest. It's interesting to see these kinds of comparisons, but what do the numbers actually contribute to the bottom lines of retailers?
The fact is, while consumer-generated content (like ratings and reviews) directly impacts retail results, but in many cases, social continues to have a minor direct impact on shopping. Now to me, this all makes perfect sense, but it's somewhat surprising to hear just how small that impact seems to be. According to a recent interview with Jay Henderson, strategy director at IBM Smarter Commerce on Mashable, just one percent of Black Friday sales are attributable to social media. One percent! That said, it would be naïve to think that your social efforts don't have any influence on sales.
Why is that? Let's take a look at the facts:
- Dorie Clark demonstrates in Forbes that only 15 percent of CMOs can quantify the impact of social media.
- Ben Harper explains how to quantify social media ROI, and proves that it's not very easy.
- According to a recent study by ExactTarget, quality beats quantity when it comes to measuring social media effectiveness.
So what's really going on when it comes to understanding the impact of social on retail? To understand, I think we have to spend some time thinking about how we actually recommend products to our friends, colleagues and family members.
Take my experience, for instance. I was getting my nails done before the Thanksgiving holiday, and another woman's significant other was in the waiting area talking to one of his buddies on the phone. They were going on and on about fishing (he had a lot of time to kill). This guy was really excited about some pre-Black Friday deals he saw on Amazon.com for an amazing fishing reel. He and his friend were making plans to meet up and fish, but he kept coming back to this deal.
"Oh man, I really want that reel," he'd say again and again. He left and got a coffee and came back, and took a call with another friend, and the same thing happened. "We're going fishing, weather should be nice, high tide is at 10:30 am-and man, I found this reel that I've had my eye on, and Amazon has it at a great price right now."
Now this guy is passionate. He's had two personal conversations, and I can imagine he's shared the same info with his social networks. But has he included a direct link to the product in any of those conversations? With tracking codes? How would the retailer know that it was a social referral? And even if he had, would his friends buy directly based on his Facebook post, or would they wait to see if he bought it? Or would they do a search on their own to see if they could beat the price?
We all do this-every day. We email each other pictures of products we want, but we don't include links. We see something on Pinterest while browsing on our phones, and remember to buy it later once we get online at home-with no direct connection between our activities. We get together over the holidays and talk about shoes, gadgets, or vacations we've seen on Facebook, and go out and buy them without those posts ever getting the credit.
And so, we can definitively say that social media had a positive impact on shopping revenue this year. But at this point in time, we just can't say exactly how much. However, as technology and our marketing measurement systems improve, I'm sure that we'll be able to see just how powerful the influence of social is on shopping. After all, it's about measuring human nature-and soon, there will be an app for that.