Dan Leberman is vice president and general manager of PayPal’s North American Online Small & Medium Business unit.
The holiday season is here, and shoppers and merchants alike are gearing up for the busiest shopping season of the year. How will technology impact retail this season, and what’s new in 2015 about the ancient “art of the sale”?
eMarketer predicts a happy holiday season for retailers this year, with U.S. retail sales in the months of November and December increasing 5.7 percent year over year, reaching $885.7 billion. E-commerce is expected to account for 9 percent of total retail sales this season, or $79.4 billion, up from 8.3 percent share last year.
Not surprisingly, mobile commerce will play a bigger part in e-commerce growth this holiday season than in years past. eMarketer expects U.S. retail m-commerce sales to rise 32.2 percent in full-year 2015 — more than double the 14.2 percent increase forecast for retail e-commerce sales as a whole.
The biggest growth will come in smartphone retail m-commerce sales, as consumers become more comfortable buying on their mobile devices. Retailers are quickly adapting to this increased demand for simple mobile shopping with mobile-friendly websites and apps that make shopping on the go as easy as checking your email or sending a text.
But there’s something even more interesting brewing in the world of mobile commerce. It’s called contextual commerce, and it blends the power of mobile devices and their inherent data about their owners’ preferences with consumers’ presence in the real world. For example, when finishing up a meal at your favorite restaurant, your mobile device can pay the check via your OpenTable app, and also ask you if you’re ready for a ride home via Uber or Lyft.
When out shopping with friends, your phone may be able to notify you that the hard-to-find perfume you’ve been considering buying for your girlfriend is available at the shop on the corner. As our devices become even smarter about our choices, desires and preferences, our mobile phones become the ultra-simple “remote control” for our lives, simplifying and enabling all of our daily transactions.
Social media will also play a big role in this brave new world of e-commerce. Billions of us already use social media platforms such as Facebook, Pinterest and Instagram for keeping in touch with friends and family and discovering more about our world, and also for learning about new products and services. Social media platforms also provide a wealth of information for merchants regarding our purchases, interests, browsing history and preferences, as well as those of our connections.
This vast data network of posts, recommendations, associations, views, likes and dislikes within a trusted “word-of-mouth” context creates a vast web of information that is incredibly useful to marketers. The information is being used today by merchants to deliver relevant information about products and services that are of interest to us or to someone we may know. The next logical step, of course, is to monetize this data network even further and shorten the journey for consumers from discovery to transaction or purchase.
Already many shops and merchants offer discounts to shoppers for doing things like checking in online via social media. This year we’ll begin to see the emergence of “shoppable social,” whereby you’ll be able to easily make a purchase or claim an offer from directly within the Facebook, Pinterest or Instagram app on your mobile device.
So instead of just learning about new products via ads or recommendations from friends, you’ll be able to more easily “close the deal” without clicking away from your social media app. This “shoppable social” brand of commerce is an obvious win for merchants who will be able to leverage the data from social media and mobile devices to target the best customers at the most appropriate moment. It’s also great for consumers who won’t need to waste time with irrelevant ads and content that simply does not apply to them.
Here are a few ideas for integrating contextual commerce and social media strategies into an existing marketing program, which can help merchants add customers and increase sales this holiday season.
Deliver native, interactive product experiences for each social media channel
Merchants should enable easy sharing of their content within the context of each target social media channel for viewing, commenting, rating, and further sharing. Consumers trust the opinions of their friends and associates more than they trust traditional advertising and marketing campaigns. Smart merchants will leverage this and rely on the trust between friends that is now finding new modes of expression and distribution via social media platforms.
Reward customers for sharing with incentive and loyalty programs
The holidays are an ideal time to build and nurture customer relationships with incentive and loyalty programs that reward current and new customers for sharing their positive experiences with your brand and products on their social media networks. Current customers will appreciate rewards such as 15 percent off their next purchase for sharing their positive experience, and such programs will also help win new customers.
These instant incentives can be part of longer-term loyalty programs that reward current customers and encourage new customers to continue their engagement. Merchants should prominently display these opportunities and rewards for social engagement in their social media posts, websites and mobile sites, and make it as easy as possible to share the love.
Implement buy buttons for instant, seamless checkout
The buy button is essential in contextual commerce for ensuring a convenient, effortless, quick and seamless sale following a customer’s exposure to an item on a social media platform. Merchants should also implement the buy button for instant sales, with as little additional input required as possible, on their website e-commerce and mobile-commerce platforms.
That way, customers have the same convenience wherever they choose to purchase — across all channels. Payments partners can integrate social media channels with merchant e-commerce platforms for seamless checkout.
The ancient and most trusted form of sales and marketing, word-of-mouth, has found a new, amplified and more efficient voice in social media. Contextual commerce brings this ancient tradition to fruition with modern engagement and sales technology. While the ancient and enduring holiday spirit of good will can never be digitized, contextual commerce makes the act of giving easier, simpler and more intelligent than ever before.