Facebook, Twitter, Instagram and other social networks are evolving by offering buying opportunities for consumers. They are no longer just about connecting with friends and family to share interests and experiences. Retailers are working with social media channels to sell a variety of goods based on data collected through members’ online behavior.
NBC News – Facebook, Twitter Want You to Hit the ‘Buy’ Button This Holiday Season, social networks are beginning to add a “buy” button, setting the stage for consumers to make impulse purchases. As a consumer scrolls through their feed, an advertisement will appear, along with a button for an immediate purchase.
Retailers hope app features like this will help them tap the rapid growth of mobile shopping. U.S. mobile commerce will increase from $74.9 billion in 2015 to $149.8 billion in 2019, according to eMarketer.
Two steps have been taken by social networks to streamline the shopping experience. They have begun to store credit card information and have partnered with software firms that provide payment security and data analytics.
E-commerce retailers will analyze this year’s holiday sales to measure the success of the “buy” feature. Few of Facebook’s users will see the “buy” button, as it has limited the feature to a small group of businesses. Facebook’s “shop now” feature is more common, appearing next to advertisements and directing the consumer to the retailer’s website.
Facebook is slowly rolling out the “buy” feature. Eighty percent of its $4.5 billion quarterly revenue comes from mobile ads. Companies value the opportunity to target 1.5 billion of Facebook’s monthly active users. Many have incorporated the social network’s user-behavior analytics to target individuals with dynamic product ads. Facebook’s Instagram has begun to integrate a “shop now” feature with customized promotion within photo streams.
Retailers must weigh the benefits of partnering with social networks. Businesses analyze whether spending high dollars is worth the cost of potentially annoying users. To support online purchases, retailers also have to make great investments in inventory, shipping, returns, and contact centers.
Pinterest also jumped on the e-commerce bandwagon, introducing buyable pins in June. Over 10,000 retailers have signed up with Pinterest, promoting over 60 million products. Pinterest’s Head of Commerce, Michael Yamartino, said Pinterest vets the companies that participate in the buyable pins program. However, Pinterest does not fulfill and support the purchases made through its site.
Twitter has been slow to adopt e-commerce. A few months ago, Twitter stepped forward to allow retailers to sell products across the social network through a partnership with Shopify, Demandware, Bigcommerce and Stripe’s Relay service.
E-commerce ads and “buy” buttons are expected to evolve. Pinterest anticipates charging retailers to promote pins. Much like its advertising business, Facebook anticipates the “buy” button will become a significant revenue generator. It is unknown whether social networks will adopt revenue-share models with these features. This year’s holiday season will help transform the future of e-commerce through social networks.