New studies connect the dots between social and revenue. It’s still a fuzzy picture, but retailers definitely are finding ROI in social media.
Instagram is the latest social network to get serious about analytics. It’s begun rolling out a suite of business tools that it says will help brands measure brand awareness on Instagram through impressions, reach and engagement and show the performance of individual ads within paid campaigns.
It’s a good move, because almost every brand – nine of out 10 – will be on social media this year, according to eMarketer. It’s a crowded space, and there’s now a pretty bewildering assortment of ROI studies – but at least they all show retailers can get ROI from social media.
Many social media shares and pins are aspirational: They know what they want but are not ready to buy so they pin it. If they really wanted to buy it, they’d just buy it.
The conversion rates for social networks differ by the product category, according to Convertro, an attribution-modeling platform acquired by AOL Platforms in May. Its analysis of $1 billion in sales, within 500 million clicks and 15 million conversions during the first quarter of 2014 tracked by Convertro found that YouTube had the highest influence at the top and bottom of the purchase funnel. Twitter, on the other hand, was the strongest influence in the middle of the customer journey.
“YouTube is strong in the front because people often start their exploration with either search or YouTube search. Social media is more of a research ally,” says Jeff Zwelling, CEO of Convertro.
At the same time, social media’s impact on conversion varies widely by the product category, according to Convertro, with the highest impact on food and beverages, followed by apparel and accessories, and then, home furnishings.
Zwelling thinks that many social media shares and pins are more aspirational: “They know what they want but are not ready to buy so they pin it. If they really wanted to buy it, they’d just buy it.”
That idea is supported by an internal analysis of ShareThis data on consumption and sharing by Hispanic Millennials. It found that, in the style and beauty category, 22 percent of page views were related to coupons and deals, while only 7 percent of the shares were. On the other hand, news and editorial related to the category accounted for 9 percent of all browsing but 26 percent of all sharing.
“People say they want to help people and share useful things, but what they actually share is more about [public image],” says Andy Stevens, vice president of research and strategy for ShareThis. He advises brands in all categories to be aware of these motivations for sharing. “It’s often aspirational — letting people know about yourself in a positive light.”
Where social media misses Hispanics
As we know, Hispanic consumers over index on social and mobile – but the picture is different when it comes to shopping conversions. In a study ShareThis did with Unilever and Mindshare, it found strong differences in the influence of social media on shopping among Hispanics.
This study found they share five times more often than non-Hispanic users, and what they share is 35 percent more likely to be clicked on than content shared by the general population. They’re also twice as likely to purchase the kinds of products they share about compared to non-Hispanic consumers.
But Hispanics are less likely to use Pinterest and Twitter for sharing content, which is a bummer for retailers. According to ShareThis, Pinterest is the top social channel for conversations about shopping.
Hispennials and social shopping
The retail ROI picture may be different when it comes to younger Hispanic consumers. The millennial segment as a whole is the hottest prospects for social shopping, according to another ShareThis study of 58 million American Millennials. They’re twice as likely to purchase a product they’ve shared, while Pinterest is the top social media site overall.
There’s evidence that Hispennials are converging with Millennials when it comes to mobile, social media and shopping. While mobile accounts for only 7 percent of Hispanic consumers’ sharing activity, Hispennials’ mobile sharing is the same as their non-Hispanic counterparts.
Hispanic millennials share on mobile as much as their non-Hispanic counterparts, and use Twitter and Pinterest just as often. The generational similarities also hold true when it comes to what content millennials, both Hispanic and non-Hispanic, consume and share.
Value for retailers
Social media networks like Pinterest offer retailers more sales and plenty of other benefits, according to Pinterest marketing expert Anna Cadiz Bennett, principal of White Glove Social Media: Retailers can collect market intelligence, and multichannel retailers can use Pinterest to find out what shoppers are most interested in and then showcase them in physical stores. It can also raise the brand profile, attract new customers and help with search engine rankings.
Pinterest, especially, lets brands collaborate with consumers, for example, by creating group boards. “When people contribute to your board, someone else is creating content for you,” she says.
While there may not be so many Hispanics on Pinterest right now, Bennett notes that several brands have created content targeting this group. Most of it does focus on Hispanic culture, rather than on specific products, with a strong emphasis on food. Brands can find the most important topics thanks to Pinterest’s search suggestion tool, by starting to type “Hispanic.”
She also advises her clients to make use of third-party tools. She says, “At the end of the day, your goal is to drive more traffic to your website.” Google Analytics will show whether Pinterest is a source of referral traffic and how much, while analytics services including Piqora can deliver metrics such as total revenue generated from Pinterest, revenue per Pin, etc.
A 2014 study by researchers at the University of Minnesota and Georgia Institute of Technology found that the most popular Pinterest category by far is food and drink, followed by DIY/crafts and home décor. Says Bennett, “If you’re in those verticals you should be on Pinterest.”
Point and buy
The rise of social media in retail and ecommerce could be tied to an increasingly post-literate, point-and-click society, according to Zwelling. “We are gravitating into a world in which people are more likely to hear and see than to read something,” he says. And, after all, visual sites like Pinterest more closely replicate the in-store experience, where shoppers are led by their eyes.
Meanwhile, social media use grows and new networks proliferate. In its 2013 Social Commerce Breakdown, AddShoppers says that Wanelo.com, a sort of combo of Pinterest and Etsy aimed at retailers, is growing phenomenally, tripling its number of shares.
(Wanelo has posted a quote from Urban Outfitters saying its traffic from the site converts four times than any other social network.)
Then, there’s StumbleUpon, the news-sharing site. Understandably, it’s got the lowest conversion rate of any network AddShoppers studied; but it also has the highest average order value, at $238.53.
Says Peter Messmer, vice president of customer success at AddShoppers, “The trend we’re seeing is social network use in general is expanding and it’s not winner takes all.”