The e-retailer spends at least 50% of its monthly display ad budget on the highly targeted, data-driven—and often cheap—ad placements using programmatic platforms.
A new report suggests less than 1% of transactions stem from social links.
The report, “The Purchase Path of Online Buyers,” finds that less than 1% of transactions for new and repeat customers can be traced back to social links.
To reach that conclusion, Forrester worked with e-commerce technology provider GSI Commerce Inc. to analyze 77,000 purchase paths taken by new and repeat shoppers prior to completing their purchases on the sites of GSI retailer clients in April.
The finding is curious given that an accompanying survey of 5,778 consumers conducted in 2011’s third quarter found that 48% of consumers agreed with the statement that social media posts are a “great way to discover new products, brands, trends or retailers,” and 40% agreed that posts are a “great way to discover sales and promotions.” Moreover, 17% said that they have bought something based on a friend’s post.
The report suggests that even though consumers say they are interested in using social media as a product discovery tool, that doesn’t mean they will click and make a purchase after reading a post right away. "We've known for awhile that Facebook hasn't been a direct sales channel for most companies and it never will be," says the report's author, Sucharita Mulpuru-Kodali, vice president and principal analyst at Forrester Research. "Hopefully we can put that conversation to rest now. But there are interesting opportunities to leverage Facebook to amplify a brand or a product, or to drive traffic to image sharing sites like Pinterest which seem to have more engagement from a shopping perspective." Those efforts, she says, require a longer measurement period to understand their impact. The analysis covered two weeks in April.
The purchase path analysis found that many consumers’ purchase paths are multifaceted. That is, consumers interact with multiple marketing channels, such as e-mail, display ads and paid search ads before making a purchase. 33% of new shoppers interact with two or more trackable touch points before making a purchase. That percentage shoots up to 48% for shoppers who end up buying at a site where they had previously purchased, the report says.
New customers have fewer touch points because many of them are what Mulpuru-Kodali calls “spear fishers,” that is, consumers who look for a specific product or brand via a search engine or by directly visiting a retailer’s site. When they find what they’re looking for, they click and buy. That’s why the most common ways those shoppers arrived at their purchase were direct visits (20%), organic search (16%) and paid search (11%). The final interaction for those first-time shoppers who had multiple touch points were the same as those with one touch point, but at lower percentages. Those were direct visits (7%), organic search (6%) and paid search (6%).
E-mail is a far more important marketing channel for repeat customers, the report finds. In fact, 30% of repeat customers made their purchase after interacting with an e-mail—13% did so after reading the e-mail and 17% did so after seeing the e-mail and interacting with other forms of marketing, such as display or paid search ads. Other common touch points for one-click buyers were direct visits (20%), organic search (6%) and paid search (5%). The final interaction for those repeat shoppers who had multiple touch points were display ads (13%), direct visits (10%) and organic search (4%).