Here’s Why We Should Care.
Facebook long has let people share ideas and dreams, but if leaders within the company have their way, it’s going to become a major method by which people hook up with e-commerce retailers they like, too.
Messenger’s Big Shift
Facebook has released a new version of its chat platform, Messenger Platform v1.2, available both through Facebook’s desktop site and standalone mobile app. Now, when a Facebook user clicks on an advertisement that appears in their Facebook feed, the click can open a Messenger window that contains either a copy of the ad or a preconstructed message from the seller. Users then can interact with the retailers’ chat bots to proceed with a purchase, complete with making a payment while still inside the chat platform.
Social Media E-commerce Is On the Rise
Looking at stats from Neil Davey of Mycustomer, only about 2% of all e-commerce traffic currently comes from social networks. Still, companies have good reason to have faith in the potential of social media in marketing and sales.
The top 500 retailers earned $3.3 billion from social shopping in 2014, an increase of 26% over the previous year (the overall e-commerce market grew about 16%, by comparison).Social media increased its share of e-commerce referrals nearly 200% between Q1 of 2014 and Q1 of 2015.Social media spending is projected to account for 22% of the overall budget by 2021.
Juggernauts like Pinterest, Twitter, Reddit and Instagram all are involved in social media-based e-commerce growth. Facebook, however, is the clear frontrunner. Based on Shopify’s analysis of 37 million social media visits that led to 529,000 orders, an average of 85% of all orders from social media come from Facebook. The social media giant also has the highest conversion rate at 1.85%. Davey adds that 62% of U.S. millennials follow at least one brand on Facebook. Enabling a more seamless purchase experience through the Messenger app likely will establish the company further as a primary driver of social retail.
Research Says Facebook’s E-commerce Move Makes Total Sense
Facebook’s move to support sales via chat has some solid research behind it. According to stats reported by Daniel James of FurstPerson, 44% of customers say having a chat customer support specialist available during an online purchase is one of the most important features a company can offer. What’s more, 63% say live chat increases the odds they’ll visit a site again, and 77% of customers won’t buy at all if they can’t chat with someone.
The above figures might tie to the technological conditioning buyers—particularly millennials—have experienced with real-time platforms. Text messages, for example, have an open rate of 98%, with individuals taking just 90 seconds to reply. Additionally, James asserts that 79% of customers say they prefer live chat customer support because of the immediacy it provides. Customers are used to fast communication, so by pulling retail into a chat-based environment, Facebook is catering to their desire for novelty and moving quickly on the fly.
The Bottom Line
E-commerce is growing and social media is expanding the role it plays in that development. Facebook’s new version of Messenger ups the game for other social media that want to connect to retail. As a precedent, it’s a significant point in retail history.