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Sales influenced by social media to double in next five years

Social commerce sales are set to more than double to £3.3 billion within the next five years, according to new research from Barclays.

By 2021 41% of UK consumers are expected to be influenced by or to be using social media to make a purchase. Among 25 to 34 year olds this figure is expected to be much higher at 73% as 45% of this age group are already engaging in s-commerce.

Richard Lowe, head of retail and wholesale at Barclays, explained: "Shopping has always been a social activity right back to the days when people bartered rather than paid for goods. It wasn’t until the arrival of e-commerce that the social aspect of shopping was removed.

"For most consumers the social element is fundamental – shopping it is a leisure activity in the British psyche – so being able to reintroduce this aspect into the online purchasing process is a powerful tool for retailers."

The research found that around 70% of online shoppers are already active users of social platforms with the number of social shoppers set to grow further as social micro-blogging websites, such as Facebook, Twitter and Pinterest increasingly blur the boundaries between retail channels.

Barclays’ research found that social media is primarily an influencer and multi-channel integrator rather than a direct sales channel with users being receptive to suggestions and recommendations but not necessarily in an active state of mind to purchase while on social networks.

Translated into revenues, Barclays estimates that social media influenced sales will more than double from £1.4 billion to £3.3 billion in the next five years. This contrasts with direct sales which are expected to rise from £210 million to £300 million.

The retailers found to be enjoying the biggest sales uplifts as a result of social media influence were in the fashion, footwear, music, film and grocery sectors.

Lowe added: "When someone you know and trusts makes a recommendation it’s extremely powerful and we’ve seen that the social shopper isn’t afraid to express online how much they want, love or dislike a product or service.

"This in turn creates a feedback loop on a product or brand. As more people post reviews, more people read them and, in turn, they give their own feedback which is picked up by a new group of consumers. Retailers should be exploring ways to tap into these communities in order to create more personalised shopping experiences."

Source : The Retail Bulletin
www.retailbulletin.com

23 May 2012
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