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Why social commerce is the next big thing for your business

By Jake Martin

3 min read

Although many businesses have a presence on social media, they aren’t realising their true potential: actually making sales.

Social commerce is growing fast. According to a recent survey by PayPal, 11% of Australians made a purchase through social media during the past six months.

The opportunities to actually make sales using social platforms are growing every day – and those who don’t snap them up could get left behind.

The majority of Australian businesses spend between $1000 and $5000 on social media, according to Sensis. The report also found that 18% of small businesses and 24% of medium-sized businesses don’t know how much they’re spending at all.

The opportunities in social media are huge. Instagram’s reach has doubled since 2013, and the number of people who end up buying online after researching a business has reached a record high of 71%.

This presence is translating into sales. According to a BI Intelligence report, social media increased its share of ecommerce referrals by nearly 200% between the first quarters of 2014 and 2015.

What are the opportunities your business should be considering in the social commerce space?

Facebook: still your first choice

With over 1.5 billion users, Facebook is the biggest social media platform, giving businesses unprecedented access to some of the most sophisticated advertising tools in the world.

According to the BI Intelligence report, Facebook accounts for 50% of total social referrals, and 64% of total social revenue. According to Shopify, nearly two-thirds of all social media visits to Shopify stores come from Facebook.

The benefit of Facebook is that businesses can use the site’s advertising platform to target specific demographics, even down to age groups, living area or ‘likes’, and even target relationship status. Those who understand their customer bases will be able to drive the most traffic to sales pages, especially for those businesses that use more direct CTAs in their ads such as ‘Buy Now’ or ‘Shop Now’, which Facebook offers.

More businesses are finding it advantageous to create dedicated Facebook stores with plug-ins and partners like Shopify, which essentially turns your Facebook page into a storefront – making it easier for businesses to track their finance systems. According to Shopify, Facebook has the highest conversion rate at 1.85%.

Facebook has been experimenting with social commerce this year, allowing users in Southeast Asia to buy products with just a few clicks. Expect to see more brands using Facebook Messenger as a commerce tool. Facebook is already letting larger brands sell products, such as airline tickets, through Messenger using bots instead of a traditional storefront.

Don’t forget about pinterest

Pinterest is alive and kicking.According to the platform, it passed 150 million monthly active users in October, up 50% year-on-year. Importantly for Australian businesses, half of its users live outside the United States – and men now make up 40% of sign-ups.

Pinterest lends itself to shopping with its photography angle – it’s essentially a catalogue – and has invested plenty in getting a type of e-commerce platform up and running.

A Millward Brown Digital report found that 93% of visitors to Pinterest use the site to plan for a purchase, and 87% of visitors make a purchase after seeing something they like.

Pinterest advertisers also uses what the platform calls ‘pins’, which allow users to buy something in one click. According to Small Biz Trends, there are 60 million of these on the platform.

If you’re a retailer, or selling products that have a high dependency on photography, Pinterest is a platform you can’t afford to ignore any longer.

What other trends do you need to know?

More platforms are experimenting with commerce. Instagram, for instance, has already debuted ‘shoppable photos’ that allow users to buy directly from the app – although these are limited to just a few select brands.

Businesses can also make use of its call-to-action buttons that include the words ‘shop now’. Not a native commerce platform by any means, but still effective.

Videos are also a huge play, with YouTube using ‘cards’ to allow brands to sell products within videos themselves. While this is mostly an arena for larger brands, smaller brands would be smart to keep an eye on how they become accessible to more businesses.

If you don’t have a social commerce strategy, then you should. Statistics from Pixlee show nearly three-quarters of consumers rely on social media to guide their purchases – and 43% are more likely to buy if they hear about something on social.

Understanding your customers is the key to an effective social strategy. Know who you’re selling to, then create a social media commerce strategy that plays to those strengths.

To read more articles related to promoting your business, visit here.

Information may be abridged and therefore incomplete. This document/information does not constitute, and should not be considered a substitute for, legal or financial advice. Each financial situation is different, the advice provided is intended to be general. Please contact your financial or legal advisors for information specific to your situation.

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