Although much has been said about the power of social media to drive retail sales, studies show that the amount of shopping done as a direct result of it is pretty insignificant.
Facebook, which drives the most sales—mainly because it has the most users—is being caught up to by Pinterest rapidly, followed by Twitter. It is clear that some of these online vehicles do direct users to e-commerce sites successfully, but the purchasing power is negligible, according to a new study by the omnichannel experts at RichRelevance.
Meanwhile, retailers seem uneducated about this fact or, at least, extremely hopeful that their numbers can improve with social media blasts. Facebook was heralded as a possible boon to e-commerce sales in the recent past, and Pinterest is still lauded for its sales-driving capabilities, with retailers like Topshop using the platform as a holiday shopping gift guide.
Back in August, a study published by L2 similarly found that “affordable luxury” fashion brands failed to acquire new customers through social media. Fewer than .25 percent of new customers have been accrued through Facebook and fewer than .01 percent through Twitter in the past four years. The same study found that the customers that were acquired through social media were less valuable, as they spent less money over time.
Social media is tricky, but can have major payoffs when executed properly. Much like Topshop’s Pinterest holiday shopping gift guide, J.Crew made headlines when the retailer launched its fall catalog on the image-sharing platform. The same went for British brand Burberry with the release of its spring 2012 collection on Twitter.
The takeaway from the data is clearly that brands shouldn’t be spending a significant amount of their resources on social media if their main goal is to directly increase sales.
However, social media is arguably still valuable in terms of branding and increasing awareness across a multitude of communication channels. An innumerable amount of brands have amassed followings across Facebook, Twitter, Pinterest, Tumblr, and Instagram in the multimillions, meaning that millions of potential shoppers are voluntarily viewing, liking, and sharing marketing and brand messages every day.