The volumes of data that e-commerce businesses generate feed our inclination to manage them using key performance indicators (KPIs). Marketing effectiveness is easily distilled into a cost per click (CPC), cost to acquire (CTA), cost per account (CPA), and overall return on investment (ROI) for our marketing dollars. While business metrics are important, they can become the trees that prevent us from seeing the forest, or the longer-tail macro trends that help inform broader strategies.
One trend that definitely warrants attention is how shoppers are responding to “shoppertainment,” or what we at Mercator Advisory Group are calling Social Commerce. Some folks may remember the analog version of this, the TV shopping channels and infomercials where you could see products being used, hear feedback from satisfied customers, and where operators were standing by to answer your phone call as you place your order. In today’s digital world, these shopping interactions are becoming more common on social medial channels, and social media has begun to evolve from the “top of funnel” to “mid-funnel,” and in some cases the whole funnel.
What does this mean?
An example of a top-of-funnel strategy is placing an ad in social media that prompts the user to go to your site to learn more about the product and make a buying decision. A mid-funnel strategy informs the shopper about the product right on the media site, perhaps through a video, use case, or other means of engaging the consumer. In this case a link to your site might bring the shopper directly to a checkout page with the product already in the shopping cart. This type of social strategy can have a huge positive effect on conversion rates, because shoppers coming to the site have already formed a positive opinion about the product from the social site. The “whole funnel” embeds commerce right on the social site so that the consumer never has to leave to make the purchase.
An offshoot of this is looking at Amazon as a channel vs. as a competitor. Amazon, through its Prime membership and review platform, is acting more like a marketplace of sellers vs. as a single merchant, and share many the same attributes and potential as we see on “traditional” social media sites.
Watch for research from Mercator scheduled for publishing in 2Q22.
Overview by Don Apgar, Director, Merchant Services Advisory Practice at Mercator Advisory Group
