Over the last few years, the number of adults using social media has skyrocketed worldwide. Facebook recently reported that it had more than 1.2 billion monthly active users on the site in 2013, according to Reuters. More than 70 million people use Pinterest, and Twitter had more than 200 million active users in 2013. Although many people use these and other social media platforms just to stay in touch with friends and family, they have a profound impact on many aspects of business and e-commerce.
Social Media’s Effect on Sales
There’s no better way to increase awareness of a product or service than social media, allowing businesses to not only advertise products but participate in one-on-one customer service by interacting with customers. Surprisingly enough, however, sales often show little impact from social media. When analyzing the Black Friday sales of 2013, only one percent of visits to e-commerce sites came from social media, according to research by IBM published in an article by AllThingsD. Even less than that—a fraction of one percent—actually led to a sale. If this is any indication as to the influence social media has on sales, it is an obvious question to ask: Why bother using social media to promote products?
Although sites like Facebook and Pinterest have little direct impact on sales, they are used to build brand awareness. That awareness can indirectly affect sales, keeping their products top of mind for customers. The process a customer goes through to make an online purchase has become much more complex, and having the ability to interact with the company can have a huge effect on the consumer’s attitude. Dissatisfied customers will make their displeasure known to 9-15 people, according to data from the White House Office of Consumer Affairs in an article on LinkedIn, and there’s no better way to be heard than by voicing a bad experience across the digital divide. A business owner must be willing to listen to his customers and respond in a way that lets shoppers know they are important and have been heard.
Shipping and Order Fulfillment
Social media impacts almost every aspect of e-commerce, including warehousing and order fulfillment. If you have launched a social media campaign that involves a contest prize or samples, then you need a warehouse and fulfillment service that is prepared to handle the results rapidly and accurately. Campaigns that go viral on social media—especially on fast-paced, news-breaking Twitter—may require a much quicker and higher volume of product shipping than had been initially expected or planned.
Many business owners prefer to use warehouses and shipping services that have proven to be reliable and cost effective by other business owners and managers. Just like any other business, social media is an excellent way to advertise such services or find the best company to provide the services you need. When small-business owners look for a warehouse or shipping company to handle their businesses, chances are they will visit the more business-focused social networking sites like LinkedIn to research and read reviews of the services. Too many negative comments and reviews can and usually will result in the loss of a customer. And it is much harder to find new customers than it is to keep existing ones.
Social Media and Word of Mouth
According to Nielsen’s Trust in Advertising report published in September 2013, 84 percent of consumers surveyed said word of mouth was the most trustworthy source of advertising; the same percentage would take action, like a complete a purchase, because of this type of advertisement. With social media connecting the family and friends who provide these valuable word-of-mouth endorsements, the platforms have become increasingly important to businesses. While these sites aren’t the final destinations to sell your goods, simply extending the conversation to these word-of-mouth advertisement hubs could help increase the buzz around your brand. The more you open up your brand on social media, the more people can—and will—talk about it with their friends and family.
Although social media sites may not be as directly responsible for large increases in sales as one might hope, they are necessary tools for building brand recognition, interacting with customers, and influencing the purchasing decisions of consumers in the long run. If your business is not a member of the social media universe, your business may miss out on an opportunity to increase brand awareness and connect with future customers.