The average return on Facebook ad spend rises 26% in Q3, according to social media advertising firm Nanigans.
But a Forrester report takes a skeptical view toward the sales power of social media.
Retailers hoping to boost their e-commerce sales this year should focus more on such areas as in-store pickup for online purchases and making shopping appealing for consumers with tablet computers. Retailers also should give attention to social networks, but not expect to gain large amount of sales from Facebook and similar sites.
Those are some of the main points in a report from Forrester Research Inc. entitled “Five Retail E-Commerce Trends to Watch in 2011.” Written by analyst Sucharita Mulpuru, the report urges retailers to craft responses to the shift of more sales to the web channel, the growing popularity of online marketplaces and the increasing use of ads based on consumers’ web browsing behaviors.
The report says that surveys and the growth in 2010 of e-commerce spending, including during the holiday shopping season, provide further proof that retailers must boost their multichannel offerings. This includes deploying kiosks inside bricks-and-mortar stores where consumers can research products and prices on the web, and also order items not on shelves, along with enabling customers to pick up inside stores items that were ordered online. Forrester says only 12% of retailers have kiosks and 10% have in-store pickup.
The report also urges retailers to prepare for what Forrester calls tablet commerce, sparked by the release last year of Apple Inc.’s iPad. Tablet computers, along with smartphones, are enabling more consumers to shop on the go. Forrester says that in 2011, tablet commerce will constitute a new subset of mobile commerce. “Retailers need to ensure that all pages, transaction forms, and form fields render as well from tablet devices as from any other browser," Mulpuru writes.
That’s not to say retailers should give less attention to smartphones. The report encourages retailers to offer content such as store locations and hours, and to employ geolocation services such as Shopkick, an app consumers can use to earn rewards when visiting stores. “They can help you reach shoppers when they are already far down the purchase funnel and likely to be looking for offers to supplement their shopping experience," the report says.
Mulpuru also urges retailers to take note of the success of Amazon.com’s online marketplace and work with other merchants, distributors and manufacturers to sell via drop-ship programs such products as replacement parts, discontinued items and difficult-to-find goods.
Retailers also can boost sales by using technology to put before consumers ads and offers that are based on shoppers’ browsing behaviors, a tactic Forrester calls conversion marketing. “A slew of companies ranging from established players like Omniture to smaller companies like TouchCommerce are likely to be the go-to partners for objectives like this in the months to come," the report says.
Finally, Forrester says retailers should make sure to weigh the impact of social media through such activities as measuring the traffic to e-commerce site from links that appear on Facebook, Twitter and their competitors. Mulpuru is skeptical of how much social networks will led to increased sales in 2011, given that social media has yet to drive much business for e-retailers. “While social networks are unlikely to be the next Google, they are relatively inexpensive and high-profile,” she writes. “They, therefore, continue to capture mindshare among retail e-business professionals, despite not generating significant sales for most businesses."