One of every five beauty purchases online is made via the Amazon marketplace, according to a new report.
In 2013, online retailers increased their focus on social media is a big way, the new Internet Retailer 2014 Social Media 500 shows. Small web-only merchants are benefiting the most from social-derived traffic and social sales.
Social commerce is becoming mainstream in e-retail.
In 2013, retailers large and small, hip and not-so-hip, moved social media marketing up a notch on their priority lists, data from the just-released Internet Retailer 2014 Social Media 500 show.
Whether they boosted their ad spend on social networks by 150% like Office Depot, ranked No. 492 in the new publications, hired their first social media director like Boot Barn (No. 201), or built out a new photo studio to create eye-catching visuals to share on social networks like ClickToShop (No. 33), online merchants increasingly view social media as a crucial part of their overall business strategies, the Social Media 500 shows.
Why? Because they are getting the picture: consumers are spending more of their time on social networks than ever. Combine that with the slew of new social ad formats Facebook and Twitter have introduced—many of which retailers say are very effective—and retailers see the results in big growth in traffic and sales that stem from social networks.
Consider these facts gleaned from the Internet Retailer 2014 Social Media 500, which ranks online merchants on the percentage of site traffic they receive from social networks—a key indicator of their effectiveness in this channel:
- Monthly referral traffic to e-commerce sites from Facebook, Twitter, Pinterest and YouTube increased 42% in 2013 to 51.5 million monthly unique visitors from 36.3 million.
- Social commerce sales retailers raked in, that is, revenue derived from those visitors, jumped nearly 63% to $2.69 billion from $1.65 billion.
- Spending on social ads by 40 retailers that supplied data increased 400% from 2012 to 2013.
By and large, it’s the small merchants like shoe maker BucketFeet (No. 1), which attracts 48% of its site traffic from social networks, and military gear e-retailer Ranger Up (No. 2), which gets 39%, that operate exclusively online that dominate the top ranks of the Social Media 500. All top 10 merchants in the Social Media 500 brought in less than $150 million in online sales in 2012, and only one, AveYou Beauty Boutique, ranked No. 6, operates a physical store.
Many of these e-retailers are relatively new to e-commerce, and don’t have the brand recognition of giant department stores like Macy’s Inc. that have been selling to store consumers for decades. Nor can they outspend Amazon.com Inc. on paid search—the leading online retailer spent on average $3.9 million per month on paid search ads in 2012, according to search marketing firm ROI Revolution Inc.—or offer free two-day shipping without going broke.
But they do know how to engage with the customers. The Top 10 e-retailers in the Social Media 500 have a 30% engagement rate on Facebook—more than 10 times the 2% engagement rate of all merchants ranked in this publication. What this means is that of the nearly 5 million Facebook fans of the Top 10 merchants, 30%, or close to 1.5 million consumers, are interacting on Facebook with the those brands weekly—whether it be sharing their posts with friends, Liking a product or leaving a comment.
The leaders in social commerce realize that since they can’t outspend their much larger competitors, they have to outflank them with great content, and smart choices about where to devote resources, says Aaron Strout, managing director of online marketing firm W2O Group, a digital marketing agency that works with HP, Michael’s Stores and other online merchants on their social strategies. “These are guys that know, ‘I have to out-think and out-execute at every turn,’” he says. “They have three or four smart people who can be nimble, and do things on social that have the maximum impact.”
Even the bigger store- and catalog-based merchants are making a real push to advance their social media strategy.
Take Office Depot Inc., the second largest online office supplies retailer in the U.S. behind Staples Inc. While office supplies might not seem like the kind of product that inspires a lot of social sharing, Office Depot increased its focus on social media in a big way this past year. It spent 150% more on social media ads in 2013 than it did the year prior, and it’s experimenting with new strategies like on-site social sharing buttons, Facebook content targeted to segmented audiences, and partnerships with influential social media players who share content on the retailer’s behalf, says Emery Skolfield, senior director of digital brand and public relations.
Similarly, business-to-business e-commerce giant W.W. Grainger Inc. increased its social traffic 158% last year and its direct social commerce sales 226%, Internet Retailer estimates.
Now in its second year, the Internet Retailer 2014 Social Media 500 is a comprehensive ranking of e-retail’s most effective social media marketers that includes an in-depth breakdown of each online merchant’s social media strategy and results. In addition to traffic and sales from social networks, the Social Media 500 features the names of social commerce executives, a tally of which vendors retailers work with on social, as well as key engagement metrics such as the number of shares per Facebook post, average retweets per tweet, and total daily pins from each e-retail site.