Sales directly attributed to social media took a deep dive this year compared to 2011 says an IBM Smarter Commerce benchmark report.

“Shoppers referred from Social Networks such as Facebook, Twitter, LinkedIn and YouTube generated .34 percent of all online sales on Black Friday, a decrease of more than 35 percent from 2011,” stated the report. And out of all social networks listed, Twitter fared the worst driving zero, zilch, nada, nothing in terms of sales!

Ouch! That doesn’t bode well for the future of social commerce…or does it?

Why the decrease? I think some explanation is needed in order to put those numbers into perspective.

Retailers changing tactics

In 2011, retailers used social media as a direct sales channel by offering deep discounts. According to a Wall Street Journal article citing an observation from Jay Henderson, strategy director for IBM Smarter Commerce, the drop could be a “sign that large retailers are using social media more to draw people into stores and less to push shoppers into making instant purchases with deep discounts.”

This tactical shift pushes social media’s influence further up the sales funnel, detaching it from actual transactions. If what Henderson said is true, that doesn’t mean social is less important, only that its role has changed somewhat.

Social media becoming more integrated into marketing campaigns

The WSJ article also suggests that social media is becoming more a part of an overall integrated, multi-channel marketing strategy. That’s as it should be. From a consumer perspective, social is a commonly used channel – a big part of the web’s warf and woof. The use of social by marketers reflects this more deeply engrained behavior.

“Last year was one of the first years there was a big investment by retailers in social media. They tried a lot of things and a lot of discounting,” said Henderson. “Some of what we’ve seen this year is retailers pulling back on promotions designed specifically for social media.”

Better tracking of downstream sales is needed

Techcrunch, which also reported on the IBM study, said better downstream tracking is needed to more accurately determine social media’s influence on sales: “Facebook has been making a major push to get credited for downstream purchases. It’s rolled out both a self-serve User ID matching system and cookie-dropping ads.”

Ad tracking is one thing; tracking organic posts are another. However, based on what it heard from Facebook, Techcrunch says that is “huge.” The top 25 most talked about Pages during the past week were all retailers, and Walmart, Toys’R'Us, and Macy’s had the most Likes, comments, and shares. “User mentions of the word ‘shopping’ spiked 586 percent last week, and many of those probably cited where people were shopping,” remarked Techcrunch.

The lack of downstream tracking could also explain what Twitter had such an abismal showing.

Suffice it to say, for social to become more relevant in terms of commerce, better tracking mechanisms are needed.

Social commerce sales increased late Thanksgiving Day

Part of the reason Black Friday numbers were so low could be due to the fact that retailers were cutting deals on Thanksgiving Day. That had an affect Where social commerce is concerned, as well.

“Sales from social network referrals as a percentage of overall online shopping climbed late Thanksgiving night, presumably after families finished dinner and people reached out on Facebook to their absent friends and relatives,” said the WSJ. Sales via social commerce rose from .2 percent during the day to .63 percent by midnight.

Social commerce aside, the big winner in all of this was mobile. Sales jumped to almost 17 percent from less than 10 percent a year ago, and the iPad was responsible for nearly 10 percent of all traffic from mobile, more than any other device.

Conclusions

Do IBM’s numbers truly mean that the social commerce heyday is over? Are we supposed to throw our hands in the air and label this experiment a failure? Personally, I think it’s too soon to make that determination.

Retailer’s use of social is ever changing. The integration of both social and mobile commerce into an overall marketing mix is taking place. And better downstream tracking is (or will) be developed. My feeling is that we should give it another year before we draw too many final conclusions.

Perhaps we need to think of social media or social commerce as less of a “channel” and more of a layer that accompanies customers all the way through the sales funnel and the shopping journey. Thanks to the growing influence of mobile, consumers are taking the web with them everywhere they go, including stores, and they continue to rely on the influence of friends to help them make smart purchase decisions.

Though its positioning may change, social commerce by its very definition – helping people shop where they socialize and socialize where they shop (including brick and mortar stores) – will continue to be an important factor.

IBM bench report social media summary

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Today’s article is sponsored by Payvment: The #1 Social Commerce Platform
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