Buy buttons are shaping up to be the next battleground in tech-driven retail, and retailers are gearing up to take the field on social media sites like Twitter, Pinterest and others. But the new payments technology presents challenges that retailers must consider.
It’s a shift that threatens to upend retail, which, until recently, viewed social media platforms largely as a way to promote products online or to give customers a way to share reviews and seek help with product issues. In the traditional social media retail model, sites like Pinterest and Twitter served as a way to build product awareness and direct potential customers to the retailer’s main site to complete a purchase.
“Buy buttons” are clickable buttons that can be integrated into a social media site to allow visitors to purchase a product without leaving the platform.
It makes sense that the next retail revolution will take place on social media, which is generating an increasingly large share of ecommerce revenue overall. According to an Internet Retailer report, the 500 top retailers generated well over $3 billion in revenue from social media shopping in 2014, a 26% increase over the previous year’s total.
Buy buttons give social media platform users greater purchasing power than ever before. Instead of having to leave one site to visit another to find and purchase a product seen on social media, users can buy products directly via the social media platform. Buy buttons take much of the friction out of the purchasing process, but they present new challenges for retailers:
Less incidental product exposure.Buy buttons are an impulse buyer’s dream, but there’s a downside for retailers; by eliminating the need for the customer to visit the retail site, fewer customers will view other listed products.
Social media platform fees. Retailers who pursue a buy button strategy will incur fees for making it easy for shoppers to instantly purchase their wares. It will be necessary to analyze that aspect of campaigns to determine true ROI.
Managing payments and inventory. It’s necessary to integrate inventory and product information into social platforms since purchases made using buy buttons are typically completed through a separate process than payments made via the retail site.
Updates between retailers and social media platforms. Retailers and social media platforms will have to regularly and consistently update each other when product information changes. Alternatively, they can use a product content management system to streamline the process.
New testing needs. As a brand-new channel, each social media platform will require retailer testing to ensure the retailer is reaching the right audience. Platforms have different audiences, so it may take time to find the right showcase for specific products.
Need to tread lightly to preserve brand integrity. While social media audiences can appreciate the right appeals, buy buttons can also be interpreted as an interruption of the user experience, so it’s important to make sure content and ads are relevant and aligned.
Buy buttons have much promise as a retail channel, but retailers should proceed with caution and make sure they address each of these challenges to ensure a smooth the transition. It’s also important to recognize that while social media is an excellent way to inform and influence customers by facilitating information sharing, its primary purpose is not to persuade users to make a purchase now.
For that reason, it’s crucial for retailers to manage their own expectations about ROI from buy button campaigns. Those who do so successfully can gain a powerful competitive edge in the next retail revolution.
Anil Kaul is CEO of Absolutedata.