Think social is driving ecommerce? Think again. Some data.

Interesting analysis by SeeWhy Software looking at 60,000 completed ecommerce transactions across multiple ecommerce sites in the first few months of this year. Note this is TRANSACTIONS, not visits, so this looks at the visits to a site that led to the site taking money.

When they analysed the sources of traffic to the shopping cart, they found that by far the biggest source of referrals was email. (Remember, that thing that is dead?).

ecommerce website referral traffic sources to shopping cart

Over 50% of the traffic to shopping carts was from email. Social media drove just 4%.

Even more starkly, when it came to actual conversion of visits to a shopping cart to actual revenue, email actually accounts for a total of over 2/3 of the traffic.

ecommerce site top revenue converting traffic sources

Social media drove just 2% of the volume of transactions.

In a world where the new kids on the block seem to believe that email is totally dead, and social is the future, this is some interesting data that might just make people think.

Of course, that doesn’t mean social media or other forms of promotion and engagement are not relevant, but it does mean you need to think hard about what you use it for. ecommerce businesses know that the bulk of their revenue and profits come from the people they know which is why so much time and effort is spent¬†understanding customers, building up mailing lists, newsletters and the like that they can use to put the right offer in front of the right people at the right time.

3 responses to “Think social is driving ecommerce? Think again. Some data.”

  1. A Forrester study in April 2011 found:

    “average Facebook metrics are a 1% click-through rate and a 2% conversion rate. E-mail marketing, by comparison, has an 11% click-through rate and a 4% average conversion rate”

    http://blogs.wsj.com/digits/2011/04/07/facebook-wont-become-e-commerce-force-analyst-says/

    http://www.forrester.com/rb/Research/will_facebook_ever_drive_ecommerce/q/id/58603/t/2

    Facebook are pretty coy in their case studies, citing relative improvements compared to initial Facebook Ads campaigns rather than giving hard numbers, and claiming that they are achieving similar acquisition costs to Google . One of the rare examples where they DO cite rates is in line with the Forrester finding

    “The highest performing ad had a click-through-rate of 0.096 percent and a conversion rate of 3.5 percent”

    http://ads.ak.facebook.com/ads/FacebookAds/KeyBroker_Casestudy.pdf

    They benchmark themselves against Google AdWords, not e-mail:

    “On par with Google AdWords on a cost-per-lead and cost-per-customer basis.

    – $1.25 CPC delivered $10.25 cost-per-lead

    – $100 average rentals; $600 average life time value per customer”

    http://ads.ak.facebook.com/ads/FacebookAds/G5_StorQuest_FBcasestudy.pdf

    From the Facebook case studies, its clear that the quality of the ad itself has a lot of impact, so maybe like most new disruptive technologies the art of using social media is still evolving. Measured on a cost-per-sheet basis Epson photocopying looked lousy relative to Xerox centralised copying. That didn’t stop Epson from completely killing Xerox because frustrated PAs could afford to expense a cheap local Epson copier for their own office.

  2. Very interesting stats.

    It is important to separate out the aim/intent of social here. So far the figures can be interpreted as 6000 people who use a variety of marketing techniques were better at converting email than any other. (a harsh conclusion, but scientifically fair..)

    What were the experience levels of those practising “social”? What budget was allowed for “social” ?

    What industry was this in, or was across many?

    Social is a way to communicate, it is not a thing, email can drive transaction very effectively because it’s often a webpage delivered straight to an inbox. 140 characters, or 4sq campaigns lack this ability, but make up for it by being “real-time”.

    I think I’d be interested to see how social drives repeat business, customer satisfaction and brand loyalty as compared to email.

    “Social media drove just 2% of the volume of transactions.” A a statement this is misleading, inaccurate and sadly like comparing apples to oranges.

    Marketing is everything that you do, social is one part of it, but think of it more holistically than a one-sided, digital “converted/not-converted” and think about how much damage you could do by NOT using social to talk to your customers.

  3. Ben Hoyle says:

    I wonder what percentage (if any) of the emails were notifications or forwards from social media sites?