THE SOCIAL-COMMERCE REPORT: Social Networks Are Driving More Online Sales And Influencing Offline Purchases

• BRANDON WORKMAN AND EMILY ADLER
 

• SEP. 29, 2014, 7:47 AM

BII

There’s been a lot of hype surrounding social commerce — the idea that posts and ads on sites like Facebook and Pinterest would generate lots of immediate sales on e-commerce sites.

Today only a fraction of retailer's online sales are actually generated directly through a referral from a social network. But the volume of social commerce is growing quickly, in the triple digits in many cases. Overall, social commerce sales grew at three times the rate of overall e-commerce last year.

Here are a selection of the key points from the report:

• Social commerce is growing quickly: The top 500 retailers earned $2.69 billion from social shopping in 2013, according to the Internet Retailer’s Social Media 500, up more than 60% over 2012, while the e-commerce market as a whole grew only 17%. 
• Social commerce is even larger in terms of revenue generation when looking not at traditional direct referrals, when the last click before purchase happens on a social-media site, but when looking at where consumers began their purchase process, i.e., the first click.
• Growth is sure to accelerate and conversion rates should improve as Twitter and Facebook roll out "Buy" buttons, which will allow social-network audiences to initiate an e-commerce purchase by clicking on a retailer's post or tweet. Facebook's tests began in July, Twitter's in September. 
• Facebook is the clear leader for social-commerce referrals and sales: This is due in large part to the sheer size of its audience — 71% of US adult internet users are on Facebook. A Facebook share of an e-commerce post translates to an average $3.58 in revenue from sales, according to AddShoppers. On Twitter, a share or retweet is worth only 85 cents. 
• But other sites are gaining, and even leading on, specific metrics, like average order value (AOV): Polyvore, for example, sees $66.75 in AOV from social referrals, according to Shopify. Pinterest sees $65. That's compared to Facebook, which sees $55 AOV.  Pinterest also drives more social sharing of retail content than any other network including Facebook.