We all know that Social networks have a direct influence on what, how, where and when people shop. According to research from Barclays, “Sales from social commerce, driven by the influence of social media, are expected to more than double within the next five years”
According to the research:
41% of the consumer population is expected to be influenced by or use social media to make a purchase.
Among 25 to 34-year-olds the figure is 73% which is unsurprising as 45% of this group are already engaging in what Barclays have called ‘s-commerce’.
Richard Lowe, Head of Retail & Wholesale at Barclays, said: "Shopping has always been a social activity right back to the days when people bartered rather than paid for goods. It wasn’t until the arrival of e-commerce that the social aspect of shopping was removed.
"For most consumers the social element is fundamental – shopping it is a leisure activity in the British psyche – so being able to reintroduce this aspect into the online purchasing process is a powerful tool for retailers".
Around 70% of online shoppers are already active users of social platforms but the number of social shoppers is set to grow further as social networking sites such as Facebook, Twitter and Pinterest continue to blur the boundaries between retail channels.
Why does this work ?
Social networks are an “influencer”. People are receptive to recommendation and feedback from their network and their “sales-guard” is down. Social networking is about being social and so if a friend makes a recommendation about the latest gadget they have purchased it is not seems as a sales-pitch.
Richard Lowe continues: "When someone you know and trusts makes a recommendation it’s extremely powerful and we’ve seen that the social shopper isn’t afraid to express online how much they want, love or dislike a product or service.
"This in turn creates a feedback loop on a product or brand. As more people post reviews, more people read them and, in turn, they give their own feedback which is picked up by a new group of consumers. “
Translated into revenues, in the next five years influenced sales are expected to more than double from £1.4 billion to £3.3 billion. This contrasts with direct sales which are expected to rise from £210 million to £300 million.
What should retailers do ?
Whenever I speak to consult to retailers, I make this point repeatedly. It is no longer about big cash spend on advertising “shotgun” style. Its about clever tapping into the right influencers in a particular circle and through that person be able to create a better shopping experience. Other key people to identify are “bridges” these are people who spread the word joining circle of communities.