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Article published on CSA - October 11, 2022
Social media is where customers spend 2.5 hours each day on average.
Almost half of consumers (48%) think that social media is a great place to discover new products as well. Social has for long been the most important new customer acquisition channel for brands, and although customer acquisition costs (CAC) have risen sharply, social commerce still represents a massive opportunity for brands of all sizes.
Five basic mistakes
But brands are making five basic mistakes on social, leading to poor experiences for customers and significantly reduced revenues from social.
We shopped three major brands on Instagram to illustrate the point: Adidas, H&M and Nike. In common with brands of all sizes selling on social, they are making five mistakes that are easy to fix and directly connected to driving more revenue from social.
1. Inconsistent product tagging
If you haven’t already done so, step one is to upload your product catalog into social. Having done so, it seems obvious that you should tag your products in images, right?
It’s very easy and quick to do, and it makes it simple for customers to find the products that you are talking about. Mentioning products by name in written posts, even though you can’t link to them directly, makes it easier for customers to find and buy them.
Frequently, you can see customers’ frustrations spilling over in the chat when they can’t find products that brands have featured. While almost all brands do tag products, it’s rarely done consistently. All products shown in both organic and promoted posts should be tagged.
2. Promoting out-of-stock products
Another massive frustration for customers is when out-of-stock products are promoted. This is especially common with faster moving lines, such as fashion.
In our Nike example, the products were tagged correctly but are out of stock. Customers have an expectation, especially with paid posts, that products brands are actively promoting will be available to buy.
The quick fix here is to turn off promotions as soon as products go out of stock (note that Facebook Ad Manager will do this eventually, but after many impressions and frustrated customers). Doing this will reduce your CAC and allow you to redeploy ad spend where it can help to drive sales rather than over-stimulating demand for products that customers can’t buy.
3. Inventory synchronization
You’ll struggle to find a major brand that doesn’t have inventory synchronization issues. These happen when products are shown as out of stock on social but are in stock on the brand site and vice versa (where the product is shown as in stock on social, but the order is subsequently cancelled after purchase).
In our example from H&M, a newly launched puffer gilet wasn’t tagged and wasn’t available. In this case, it’s likely that these new products weren’t in the catalog on Instagram yet, but at least they were called out in the detail of a post so that customers could search for them on the brand’s site. Check that your inventory feed is updated as frequently as possible to reduce the impact of this problem.
4. Inconsistent Promotions
Nothing drives customer frustrations higher than paying too much for a product when it’s available elsewhere from the same brand for a cheaper price. Price needs to be consistent across channels; many tests have shown that differential pricing can cause real customer anger and a big backlash.
Yet on social, products are frequently more expensive than on the brand site. This is caused by promotions, such as “Back to School,” not being mirrored up to the stores’ social channels. Maintaining multiple stores and keeping them in synch takes effort, and most brands are under-resourcing their social commerce efforts.
Given the inherent limitations in these social platforms, while you can correctly reflect product pricing, you may struggle to achieve the same overall effect of a seasonal promotion as you can on your brand’s site. The simple fix here is to make sure that pricing is as consistent as possible and that you post and promote the seasonal sale on social channels so that customers can go to the brand site to take advantage of the promotion.
There is another variation, where a sitewide social store promotion seeks to promote sales on the social platform, at the expense of the brand site. From a brand’s point of view, there is so much wrong with this approach it’s hard to know where to start, except to say that in some cases, this can be funded by the social platform itself — in which case, it may be hard to resist.
After all, if Meta wants to provide a 20% discount on your products, it will likely drive sales in the short term. However, from a customer’s point of view, you run the risk of a customer paying full price on the brand site and then finding that they could have saved 20% by buying on Instagram, for example. Not a great feeling and hardly the optimal way to kick off a long-term and profitable new customer relationship. Given that Instagram owns the customer data, the brand doesn’t even know who she is.
5. Social checkout
SimplicityDX research shows 71% of online shoppers prefer to check out on brand sites and not buy through social platforms. Of the small minority of customers that are happy to buy on social, if they’ve ever had to return a product, only 17% would be happy buying on social again because of the disconnected returns experience.
Given this, it’s very clear at this point that best practice is to make it easy for customers to discover on social and buy on the brand site.
The way that customers shop has changed: Shopping has moved to the edge. Social is where customers go to hang out, and increasingly, they like to discover new brands and products there.
For brands, it represents an enormous opportunity to tap into a firehose of new customers by following a few basic best practices: Tag all products; don’t promote out-of-stock products; synchronize your assortment, inventory, pricing and promotions; and redirect customer to your brand site to make purchases.
Charles Nicholls is founding director and chief strategy officer for SimplicityDX.
