In January, Booz & Company produced a report suggesting that stores on Facebook were set for explosive growth—a 56% CAGR over the next five years, which some commentators have hyped as 600% growth. In 2015, the report says, the market for products sold on social network sites will be worth $30bn, of which $14bn will be in the U.S.
According to some commentators, this is a ‘massive opportunity’ that ecommerce companies should jump on and get the ‘first mover advantage.’
Hmm. Many of the ecommerce heads who I’ve talked to that have Facebook stores are somewhat more cautious, referring to their stores as ‘an interesting experiment’ or ‘we’ve learned a lot and so has our Facebook shopping cart vendor.’ When asked about sales volumes, they typically report low single-digit sales.
All of this says to me that these are very early days, and while early adopters may want to plunge onto the bleeding edge, it’s frankly not right for most ecommerce companies. In fact, I’ll go further and suggest staying away for 2011, with a few exceptions.
Here’s why.
A $14bn U.S. market may sound really big, but I wanted to see how big it is relative to forecast growth for traditional ecommerce.
It’s miniscule.
By combining the data from Booz with the U.S. Commerce Dept. and mobile commerce forecasts from CODA, for the first time we can see where commerce on social networks sits relative to overall online sales.
As a percentage, in 2015, after that 600% growth, commerce on social networks will represent only 4% of all online commerce.
Mobile commerce is forecast to be three times bigger by 2015.
Here’s the data, published for the first time:
Of course, all forecasts are wrong: They’re either too high or too low. But for mainstream ecommerce it just doesn’t make a whole ton of sense right now to duplicate the ecommerce site, particularly when sales using the Facebook channel are miniscule. (…)
Online retailers roll out holiday promotions this week to combat high shopping cart abandonment rates.
Two thirds of online retailers are rolling out holiday promotions this week or have already done so. 61% of holiday promotions this year will be focused around free shipping, and 29% on promotional discounts. Multi-buy and free product offers will account for only 10%. (…)
On July 27, SeeWhy conducted an online poll among 221 eMarketers. The results reveal some potential shifts in focus over the next 12 months: shopping cart recovery, reducing landing page clutter, link building, and transactional email all emerge as top priorities.
The poll also looked in detail at four key areas of conversion to determine their priorities. The four areas examined were as follows:
• SEO
• Landing page optimization
• Email marketing
• Web conversion/shopping cart recovery techniques
Each respondent was allowed to pick only one response in each category, forcing them to choose their top priority.
SEO Priorities
Marketers plan to focus on link building as their top priority in the next 12 months, with 42 percent stating that it is their top SEO focus. Changes to website pages to ensure they are more SEO friendly were the highest priority for 22 percent, while 21 percent plan to focus on social media integration. Site-based optimization (such as sitemaps and navigation) was the main focus for only 15 percent. There are two notable conclusions that you draw about these findings:
1) Marketers have taken on board the changes made over recent months by Google to prioritize quality and diversity of links in search results over the content itself.
2) Social media integration is unexpectedly high. While social media is hot for marketers, in SEO terms this is really cutting edge stuff, and it signals that marketers have recognized the importance of social media in driving traffic. In particular, Facebook’s social plugins, including the easy to implement ‘Like’ button, are beginning to be viewed as a simple ‘social SEO toolkit.’
Website and Landing Page Optimization
Marketers are taking the ‘less is more’ philosophy to heart when it comes to landing page optimization. Just over half (51 percent) stated that reducing clutter was their top priority, recognizing that landing pages have been added to gradually over time at the expense of simplicity and simple, strong calls to action. (…)
‘Have we conditioned most customers to the point that they expect discounts and won’t buy without one?’
This is a great question, and it’s worth considering in more depth. Recent research shows that coupon redemption is at an all time high, and at the same time, Ben Bernanke warns that the economic recovery is fragile and taxes will inevitably have to rise. It’s no wonder that customers are nervous and cautious. (…)
Amazon has announced that it has implemented a range of social commerce features based on Facebook Login and Facebook Recommendations. This is a significant move for Amazon, with implications for the ecommerce sector. Amazon has for some time had its own social features (such as reviews), but this new move signals a strategic recognition of Facebook—and the importance of social commerce.
We’ve called for a while now for tighter integration between Facebook and ecommerce sites, because it is just common sense. When Facebook rolled out its range of social plugins at the F8 developer conference this year, it became not just common sense but easy to do as well. (…)
The advent of some high profile ecommerce sites on Facebook, such as 1-800-Flowers and Disney’s Toy Story 3 ticket application, have sparked a debate about whether to build duplicate ecommerce sites (or subsets) on Facebook itself. (…)
In January, Booz & Company produced a report suggesting that stores on Facebook were set for explosive growth—a 56% CAGR over the next five years, which some commentators have hyped as 600% growth. In 2015, the report says, the market for products sold on social network sites will be worth $30bn, of which $14bn will be in the U.S.
 – Think Social Plugins){kind=link}
