A research whitepaper commissioned by social commerce and recommendations platform nToklo has found that retailers in the UK are not taking full advantage of the sales opportunities offered by s-commerce, missing out on a potential £9 billion in extra online revenue.
The paper also revealed that user generated content (UGC) is shaping the world of ecommerce faster than retailers themselves can develop and keep up with online trends. Optimised UGC could result in up to 27 per cent more sales.
Internet watchdog IMRG reported that online retail spend in the UK during 2011 was approximately £68.2bn, with growth of some 13 per cent expected for 2012. With nToklo’s research finding that half of retailers do not yet offer online recommendations to consumers, it can be estimated that retailers missed out on an estimated £9bn worth of additional online revenues in the last year.
In order for retailers to take advantage of this additional revenue stream, they need to implement a productive, engaging, and relevant s-commerce strategy. In addition to using existing social platforms, these features can and should reside within the retailer’s e-commerce system (website, mobile optimised site, tablet application, etc.), providing users with the tools they require to be social while shopping. Only half of the sites surveyed by nToklo allow users to submit reviews on products or services.
The research also highlighted the ever-increasing importance of social media channels to British retailers, of which over 90 surveyed had a presence on Facebook and Twitter. 65 per cent of these social media accounts also utilise integration technology such as Facebook Connect . 50 per cent provide customers with recommendations through their website but 73 per cent of do not enable consumers to actively discover or share recommendations via their social media platforms.
nToklo co-founder Anton Gething, said: “The increasing interest in social commerce stems from the natural progression of two trends that have seen tremendous growth in recent years: online shopping and social networking. However, this research shows that social commerce is yet to become the sum of its parts and many businesses are missing out on a potentially significant additional revenue opportunity.”
“Presenting users with relevant, timely recommendations has been an understood and valuable part of the traditional retail purchase funnel for a number of years, whether in-store or online. However, with the explosion in social engagement, recommendation content is no longer provided by the retail brand alone and increasingly consumers are seeking out more ‘social’ user reviews and recommendations. Therefore, those retailers in a position to offer a cohesive social experience online will be in a position to take advantage of the potential growth in revenue available to them.”
In order to start tapping into the huge revenue growth potential of s-commerce nToklo advises retailers to develop a community on their brand site. Stimulating user engagement in this way can in turn build a wealth of user generated content and Social Capital. Users should be able to ask questions directly to the brand about products, whether in store, through expert opinion, or online with real time Q&A pages, and to offer their own feedback, whether good or bad.
Users should also have the option of being notified about topics and products of interest and to offer suggestions online via simple channels such as a suggestion box. It should also be made simple for users to generate and share content about particular brands and comments on their own websites and social media outlets.
As important as it is to post their opinion on a brand’s site, it’s equally important to also allow them to voice this opinion elsewhere. Allowing consumers the ability to share reviews and recommend products to other users, whether this is onsite or via other social networks, means consumers are able to become advocates for a brand in the social sphere.
The results highlighted in the whitepaper are based on research and analysis conducted on the online and social media presence of the top 101 retailers in the UK according to reported and estimated 2011 group sales figures.
