By Maris Cohen, Content Marketing Manager, The NPD Group
When discovering a product of interest on social media these days, who has time to open a new browser window, navigate to a brand’s website, and complete a new search for the product? By 2016 standards, that’s way too many steps.
Craving pizza? Just Tweet a pizza emoji. Want that area rug? Just click the Buyable Pin for it to adorn your own home. Wish the watch in your Instagram feed were on your wrist? Just click on the brand’s profile link to buy it.
Since 2012, social media platforms have integrated click-to-buy features that allow retailers and manufacturers to sell directly to consumers within social platforms. Twitter, Facebook, Instagram, Pinterest, Tumblr, and Snapchat have all gotten in on the trend. But even though consumers are spending more time on social media, the jury’s still out. Do they want to, and will they, shop while immersed in online social networks? Do these social buy buttons actually encourage people to buy?
Online Commerce Is Growing
Answering these questions requires an initial assessment of social commerce’s overarching retail universe—online retail. E-commerce is growing at a faster rate than total retail channels across all industries tracked by NPD. Online sales grew 7.5 percent year-over-year in the 12 months ending in June 2016 (compared to 1.6-percent growth for total retail channels), shown by our Consumer Tracking Service. And certain categories have enjoyed even higher online sales growth: prestige beauty sales increased 27.9 percent year-over-year, office supplies grew 18 percent, and home textiles increased 14.5 percent. As a retailer or manufacturer focused on the future, one look at those growth rates should indicate a serious need to target your customers online.
Where are your customers spending most of their online time? Unfortunately for you, it’s not on your retail site.
You probably guessed it—it’s on social media.
The Social Network
In an online poll of U.S. adults conducted through our partner CivicScience, we asked respondents how much time they spend on social media on an average day. Year to date, 46 percent reported spending more than one hour a day on social media (59 percent if you narrow the view to Millennials). Compared to one year prior, the proportion of respondents spending two to four hours on social media increased by one percentage point, and those spending four-plus hours on social media increased 2 percentage points.
Bottom line—if you want to reach your customers online, you can find them somewhere in their digital social networks. But which channels are they on? In a CivicScience online poll of U.S. adults conducted from January through July 2016, we asked respondents how often they use particular social media sites. Facebook had the greatest percentage of active users (defined as those who use the site daily or weekly), followed by Pinterest, Twitter, and Instagram.
|Social Media Site||Percent of Users Who Are Active (Daily or Weekly Users)|
Source: CivicScience, January – July 2016
These stats clearly demonstrate a human thirst for digital social connection, but what does this have to do with shopping? During the same time period, we were curious if a relationship existed between spending time on social channels and buying things. So we asked respondents if social media influenced the clothing and accessories they bought, and 20 percent said yes. When we asked the same question for food purchases, 20 percent also said yes. For personal electronic products, the number was even higher: 30 percent. Given this influence, and the human propensity for distraction, it’s no wonder social channels and brands have sought a way to bring the shopping process directly to consumers, eliminating the steps it takes to find and buy a product.
All Channels Are Not Created Equal
Despite widespread experimentation and adoption of social buy buttons by thousands of brands, many have argued social media is not an effective sales channel. This might seem to be the case if you narrow your viewpoint to Twitter. In September 2014, Twitter began testing out its “Buy” button in an effort to make its channel more shoppable. The feature allows users to buy directly from a Tweet, with an entire purchase completed in a few taps. But in May, Twitter stopped product development on its Buy button, indicating poor performance. Instead, the company is shifting investments to dynamic product ads, which show users image ads of products they previously viewed on advertisers’ websites.
But just because Twitter hasn’t experienced great success with its Buy buttons doesn’t mean it can’t work for other social platforms. Amrita Parmar of our Retail Business Group attributes the lack of traction with Twitter’s Buy button to the fact that the channel is perceived more as an expressive platform, rather than a commerce platform. Twitter is less visual than Pinterest and Instagram; users might be on Twitter more to “learn” than to “look.” In addition, there’s an aspirational component to Pinterest that translates to purchases, Amrita explains. Users pin recipes they’d like to make, fashion looks they aspire to, home décor they wish to replicate. And to create any of these “looks,” users will mostly likely have to buy something, whether it’s fabric or a piece of furniture. This theory is supported by research from Cowen and Company, which indicates that image-based platforms like Pinterest lend themselves better to shopping. The study found that discovering and shopping for products was the second most popular use of Pinterest, followed by viewing photos. Moreover, 55 percent of Pinterest users find and shop for products on the platform, compared to only 9 percent of Twitter users.
In June 2015, Pinterest announced the launch of its Buyable Pins, which allow users to purchase a product directly from a Pin without ever leaving the platform; users tap the Pin to choose the color and quantity, and then input payment and shipping information to complete their purchase. While Buyable Pins initially were only available to a select few brands, after a positive consumer response, Pinterest extended the feature to big brands and thousands of new merchants. A reported 60 million people used the Buyable Pins during the first few months, with merchants claiming to have acquired new customers through these Pins. Pinterest also reported seeing an increased usage of Buyable Pins between Thanksgiving and Christmas 2015.
Across food, fashion, beauty, home, and overall retail, a growing number of brands are experimenting with click-to-buy in the social space:
- In the food marketplace, Domino’s Pizza pioneered the click-to-buy trend back in 2012, when it launched Facebook in-app ordering in Australia and New Zealand. Since then, Pizza Hut, Whole Foods Market, Wingstop, Taco Bell, and BurgerKing are just some of the other foodservice bands that have entered the competition. While companies like Burger King and Pizza Hut have pursued ordering via Facebook Messenger, others have turned to less mainstream channels: Taco Bell, for example, experimented with Slack, a workplace chat app. Through Slack’s TacoBot, customers can send a message to place an order, fine tune details with a friendly bot, and pick up their food at the nearest participating Taco Bell. And it looks like these foodservice operators have the right idea. Our restaurant industry analyst, Bonnie Riggs, cites delivery as one way to stay competitive in a low-growth foodservice environment. Over the past four years, delivery has grown by 69 million orders, while drive-thru traffic is down, falling 128 million visits from May 2012 through May 2016. In an era when drive thru seems laborious compared to the alterative of delivery via pizza emoji, restaurants exploring bot-driven message ordering tap into this consumer demand for ease and convenience—enabling customers to plan orders in advance and minimize time spent idly waiting in a drive-thru line.
- In the home space, online furniture retailer Wayfair was one of the first retailers to try out Pinterest’s Buyable Pins. Wayfair has a “Shop” board where users can click on photos of products ranging from toilet shelves to cat trees and “add to bag” with one simple click. In The PinterestShop, a collection of shoppable products curated by Pinterest’ editors, Wayfair’s Buyable Pins sit next to those of brands like Overstock.com and Gwyneth Paltrow’s lifestyle brand Goop.
- Historically traditional retailers like Bloomingdales, NeimanMarcus, and Macy’s have become a little more social, too. They all feature Shop boards on their Pinterest pages, where visitors can browse and buy anything from clothes to cribs.
- In the fashion world, Michael Kors just brought back its #InstaKors Instagram initiative to create a seamless shopping experience for its followers. On posts captioned with the #InstaKors hashtag, followers can click on Michael Kors’ profile link, after which they’re directed to a special site mirroring the Instagram feed where they can purchase products.
- Sephora is disrupting the beauty world through its shoppable Snapchats. In June, the beauty retailer allowed its followers to purchase products featured in live stories by taking a screenshot and downloading the ShopStyle application, after which they could select color and size and complete the checkout process.
The Future of Click-to-Buy
It seems too early to know with certainty the future viability of one-click social commerce. From our perspective at NPD, we do know online sales are healthy, consumers are spending more time on social sites, and humans are hungry for technology that makes their lives (and shopping) as painless as possible. So we’re willing to bet that we haven’t seen the last of shoppable, click-to-buy ads.