Mobile Social Consumerization and “Buy Button” E-commerce
Mobile + social consumer is a new and growing market segment. Making it easier for the mobile consumers and mobile social consumers to purchase is the new frontier of digital strategy and audience monetization.
Why? The millennials don’t socialize or buy the same way they did 10-15 years ago. They’re almost exclusively on mobile and social media.
The mobile + social media audience data is staggering. Facebook shared in its Q2 earnings report that they have 1.44 billion monthly active users. Of those, 1.25 billion were mobile users, an increase of 24 percent year over year. Facebook also revealed that it now has 936 million daily active users and 798 million mobile daily active users. This means about 65% of Facebook’s members use the service daily, and 64% of its mobile members use it daily on mobile.
Traffic monetization is the #1 priority for social networks. The blending of community and commerce is the new frontier. Google, Facebook, Twitter, Pinterest, Yahoo, Instagram, and others are testing new call-to-action button on ads and posts to go beyond advertising and close the loop – make it easier to purchase while viewing ads. This direct “interactive” commerce capability aims to reduce the friction in mobile purchases. This can be a game-changer that puts even more pressure on the existing consumer-retailer engagement.
Source: Business Insider
Call-to-Action Buy Buttons
The average time spent on Facebook by an average user is 46 minutes per day. Users conduct 1.5 billion search queries on Facebook per day, and the site has indexed more than 2 trillion posts.
How to convert this high volume sticky traffic into revenue is a core business problem. Traffic monetization is a multi-year voyage for Facebook and other social networks.
Facebook and others are experimenting with “buy” button strategies that enable their audience, especially the millennials, to pay for e-commerce purchases from other businesses without leaving their site or app.
Rather than clicking away to a merchant’s site, the Buy button lets consumers complete the entire purchase flow within Facebook, Google etc, which could boost conversion rates and endear retailers to the social network. Consumers can use a credit card they have on file with Facebook, enter new payment details and save them for future use, or just checkout and not store payment info.
Through the Buy button, millennials can complete a transaction while staying in Facebook or Pinterest. This is a big step by social networks toward becoming online e-commerce marketplaces rivaling those run by Amazon.com Inc. and eBay Inc.
Improving Conversion in the Purchase Funnel
Conversion – how to make a prospect who might be interested in buying a product actually complete the purchase.
Whether its websites, apps, social media, or ads, it all comes down to conversion rate. The problem with the typical advertising to purchase process is that every step and hand-offs results in customers abandoning their cart and not moving to the next step. Two critical steps in every sale are getting the customer to the checkout screen, and having them painstakingly enter their credit card number.
Facebook effectively eliminates both these steps with the Buy button. You don’t have to leave the news feed of Facebook. And even if you’ve never bought something from a merchant before, you don’t have to re-enter your payment details if you’ve already stored them on Facebook. You just click Buy, and click again to confirm, and the item is on its way to your door. This is perfect for products that are fall into the impulse purchase category (similar to candy, soda or water at the checkout line).
By shaving down the time and effort from interest to purchase, Facebook could get more people, especially millennials, spending for ecommerce purchases. That’s something retailers might be very willing to pay for in an extremely competitive environment.
How does this work? After clicking Buy, users are shown a higher-quality image of the product in an overlay. If they choose to check out, there are just three more screens to go through: shipping information, payment information, and check out.
What’s the big deal?
The ability to close the advertising to purchase loop is the holy grail in attribution and direct marketing.
Among the call to action buttons, the one closest to the bottom of the funnel has been Buy Now, prompting the user to finish a transaction on the external website. Even if someone doesn’t complete the transaction after clicking Buy, advertisers can guage “intent to buy” and know that the user is interested in making a purchase of that particular product, and they can target them with more ads for that specific item.
As long term trend… It will be interesting to see if consumers can be persuaded to buy directly inside social networks like Facebook or Pinterest. It will be interesting to see how effective this would be in the mobile social channel and what category of products are a natural fit for this channel.
- Facebook made several forays into ecommerce over the years. It tried a Pinterest-style Collections featurewith buy buttons that led off-site back in 2012. It enabled on-site payments to charities with its Donate Button, last year. And most recently, it’s been testing an “Auto-Fill With Facebook” feature that automatically enters your payment details when you’re making a purchase in a third-party ecommerce app.
- Twitter has experimented with a Buy button, indicating it too wants to try hosting ecommerce transactions. If the test is successful and rolls out, Twitter could earn money on the feature by charging a fee or revenue share in exchange for processing payment and improving conversion rates. It could also use the purchases to prove ROI to advertisers, encouraging them to buy bigger campaigns. Collecting credit card info could also help Twitter with other commerce-related initiatives.
- Google recently announced a new feature called Purchases on Google, which will make it easier for consumers to buy products directly from mobile search ads. The merchants will still handle the actual product fulfillment, although the pages will be hosted by Google.
- Pinterest has launched their buy button recently. Purchasers will have the choice to pay using Apple Pay or a credit card. Payments will be handled by Stripe and PayPal-owned Braintree. Pinterest is partnering with Shopify and Demandware to make it easier for small- and medium-sized businesses to sell products through the site. In announcing the news, Pinterest said that millions of products will be available from its initial brand partners, which include Macy’s, Neiman Marcus and Nordstrom.
- Yahoo buys Polyvore
- For more on this topic… See also Mobile Marketing Automation