Social commerce spotlight: Ignoring peer influence costs retailers £9 billion in online revenue
According to social commerce and recommendation pros nToklo, the use of user-generated-content (UGC) and recommendations could account for up to a 27 percent uptake in sales. However, 50 percent of the UK’s top 101 retailers do not offer these features, and 73 percent of the sites do not allow consumers to discover or share recommendations through social platforms.
‘Social’ is clearly important to brands – over 90 percent of those surveyed have a presence on Facebook or Twitter, yet only 65 percent of retailer’s sites use the integration technology such sites offer, such as Facebook Connect.
Furthermore, 76 percent of the retailers fail to offer their customers social community functions within their sites, despite the majority requiring customer accounts and sign-ins.
nToklo Co-Founder and Product Director, Anton Gething, says: “The increasing interest in social commerce stems from the natural progression of two trends that have seen tremendous growth in recent years: online shopping and social networking.
“However, this research shows that social commerce is yet to become the sum of its parts and many businesses are missing out on a potentially significant additional revenue opportunity.”
According to Interactive Media in Retail Group (IMRG), the UK industry association for e-retail, the UK’s online retail spend for 2011 was £68.2 billion. This is expected to grow by a further 13 percent in 2012 – something, nToklo believes, retailers must take advantage of.
However, as Gething notes, brands must be prepared to facilitate this development beyond their own boundaries: “With the explosion in social engagement, recommendation content is no longer provided by the retail brand alone and increasingly consumers are seeking out more ‘social’ user reviews and recommendations.
“Therefore, those retailers in a position to offer a cohesive social experience online will be in a position to take advantage of the potential growth in revenue available to them.”