Marketing

Social Commerce: How Online Retailers Can Do It

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Retailers who want to develop new target groups rely on sales via social media channels. It is more important than ever to meet the expectations of the target group. Florian Haubold, Vice President Sales and Account Management at Arvato Financial Solutions, explains in an interview with Christiane Manow-Le Ruyet, Editor-in-Chief at e-commerce magazin, how online retailers can successfully operate social commerce.

Christiane Manow-Le Ruyet: Social commerce is becoming increasingly popular with consumers. What’s so attractive about it?

Florian Haubold: The personal relationship to the product and the community is the focus of social commerce. In addition to being inspired by advertising, recommendations or advice, the user is offered a direct purchase option. The gap between the purchase request and the conclusion is very small and therefore very interesting for retailers. Conversely, customers find it an advantage to have a direct line to dealers.

Brand owners groan that social shopping reduces brand loyalty. What reasons do you see for this?

The consumer connects the product strongly with the advertising influencer or exclusively with the channel on which the purchase was made. The connection to the brand is therefore not as omnipresent as in classic advertising. A second point is the amount and frequency with which new brands and products pass through the various channels. Often it is one-product brands that score points in the short term through powerful marketing.

How can you counteract this?

With the help of market observation and trend analysis, companies can optimize their communication and develop employees as brand ambassadors themselves – or work with influencers on a long-term basis. When influencers or even consumers are involved in brand and product development, companies can gain credibility. Online retailers can then place offers with a community that is curious about them.

“It depends on strategically courageous decisions “

For online retailers, however, social shopping means that another shopping channel is added to the omnichannel that follows its own rules. What is it about?

It depends on strategically courageous decisions. Which channel suits the company, is my target group there and what is my goal? This also includes actively deciding against a platform. If a channel is used for sales, it should be optimized. Simple, seamless processes for the customer, for example when logging in, desired payment methods and faster customer service. All of this must be able to be implemented as a structured backend for the company without any effort.

How can social shopping be integrated or linked into an existing online shop IT landscape – especially for data evaluation?

That depends on whether you are linking to your shop from social media or whether you are setting up a shop page on the platform yourself. The integration of social shopping and the collected data into an existing shop system is now quite easy using plug-ins.

With the help of snackable content, products can be sold well on social networks. What is the secret of success behind this form of content?

Usually, social media channels are only visited in between. It is scrolled through the timeline at the same time and content has to be appropriately catchy these days. The so-called snackable content must be prepared in such a way that it can be consumed in just a few seconds. I see the greatest challenge in the change from classic advertising, in which long stories are told with impressive images and videos that last for minutes, and can now be presented in a few seconds or in a few lines. In a very short time you have to attract attention between hundreds of other posts – this can be done, for example, with very appealing images, reduced headlines and breaking through learned patterns.

Social commerce retailers should rely on these platforms

Not all platforms are suitable for all products. In your opinion, which social media networks are popular with which target group?

Statistics from Statistia, for example, or information from the respective platforms show that the over 35s generation primarily uses Facebook because it grew up with it; many companies use this platform as a second homepage. This is about community management: Companies should share content, but can also integrate their shop directly. On Instagram, the focus of the over 25s is already on consuming shorter content, primarily pictures or short videos. Users build relationships with influencers and trust their opinion. Which is why product placement plays a major role on Instagram. At TikTok, too, the focus is on this, with the content having to be told even more briefly. Overall, it is important to understand the target group and their communicative preferences in order to be able to sell successfully.

One of the major challenges for online retail is the issue of customer centricity. The more consumer-oriented the product offerings, the better. To what extent do the requirements in terms of customer orientation for social shopping differ compared to other channels such as web shops or shopping via app?

The focus here is clearly on the customer and his interests. It’s not just about offering a product. Rather, a company has to offer additional added value. Fast and direct customer service also plays a major role. Any questions from the user must be answered as quickly as possible, otherwise the purchase will be canceled. Using segmentation options based on profile information or preferences, users in social media can be addressed in a much more personal way and with individual offers. Traders should take advantage of this.

This is how ratings and user data evaluations help

Data analysis is an essential part for online retailers. This is the only way to assess the ordering behavior of users and initiate appropriate advertising and marketing measures. What pitfalls lurk in user data analysis?

Before I mentioned that the sales strategy in social media can always include a reduction. This does not mean that retailers should not look to the right and left, because the data analysis should be done across the board. One possible pitfall is that user data often cannot be compared with one another. The derivation of overarching KPIs, such as click rates, should therefore always take into account differences in the channel, the buyer personas and the previous communication. Last but not least: The requirements of the GDPR should not be pitfalls, but rather nomenclature in online trading.

Reviews play a big role in social shopping. Why and how can this be automatically integrated into the data evaluations of this shopping channel?

Social commerce in particular lives from reviews, which should be shown in good review monitoring. You can of course build this monitoring yourself. However, if you want to concentrate on your core business, especially if you don’t yet know how long the users have been using the social platform, review management software can help. These already aggregate the data with the help of the interfaces of the most common shops. Thus, they not only help with the technical connection, but also with the further processing of the data. Reviews on the various portals can be filtered in order to gain new knowledge. They also help to integrate into the existing customer management and to be able to respond directly to negative reviews.

What would you recommend to online retailers who want to start social shopping now?

Anyone who purchases online as a customer is used to the good service and professionalism of the major e-commerce players. Retailers should therefore concentrate their services on the main channels and realistically assess what they can do themselves – and where tools and service providers close gaps.

Social Commerce: “Stories have to be told”

Social and live shopping – two shopping channels that go perfectly together. Or not?

Yes, of course. Instagram, YouTube or TikTok now offer the technical basis for successfully implementing live shopping in social channels. The big advantage is the bidirectional communication that allows advice or enables exclusive shopping experiences. Combined with purchasing with a click, special drops or product launches, retailers can actually stage shows. This is definitely an exciting field in which a lot will still happen.

How do you think social commerce will evolve? What do retailers have to adjust to?

Even today, it is not enough to pull up an Instagram channel with an integrated shop and display photos of my products there. Stories have to be told in which customers play the leading roles.

Purchasing has to become faster and easier, otherwise the customer will lose interest and break off. Traders must therefore position themselves on the system side in such a way that the foundation is reliable – and that they can keep up with market movements.

Also read: Social Commerce – New Opportunities for Retailers in Competition.

Social Commerce, Florian Haubold
Image: Arvato Financial Solutions

Florian Haubold, Vice President Sales and Account Management at Arvato Financial Solutions, has been helping e-commerce companies monetize their businesses for over 15 years. He appreciates getting to the bottom of things in order to give companies a verifiable lead in digital business.