CORRECTION: On Feb. 26, we shared some data from Monetate that showed social media outperforming search and email for e-commerce conversion rates. It has since come to our attention that there was an error in Monetate's data, which has been corrected. Our new chart and analysis based on the new data is below. We apologize for the error.
E-commerce conversion rates from social media improved slightly in the fourth quarter of 2013, according to Montetate. However, social media's primary role in e-commerce continues to be coaxing consumers further down the purchase funnel.
Social networks lag search and e-mail as a direct source of sales.
- Approximately 0.75% of people referred to an e-commerce site by social media turned into paying customers during the fourth quarter. That's up from roughly 0.5% in the third quarter.
- For comparison, roughly 2.3% of people referred by search converted into customers.
- Email remains the most effective referral channel for e-commerce, with a 3.8% conversion rate in the fourth quarter.
Search and email still provide a more effective method for targeting consumers who intend to purchase something (e.g., someone searching for the nearest store that carries a specific product).
However, some retailers are leveraging social networks to influence consumers before they exhibit an intent to buy. For example, many people use Pinterest to discover new products, and Facebook or Yelp to read reviews. This top-of-funnel activity is extremely important for attracting new customers.
"Sixty percent of a consumer's journey in deciding whether they want to purchase a product is already decided by the time he or she interacts with a brand," estimates Tim Barker, chief product officer at DataSift, a company that uses machine-learning methods to work with social media data.
It's worth noting that Monetate's sample of e-commerce sites changed between the third and fourth quarters of 2012, as shown by a dotted line in the chart, when it went from using a sample of 600 million online shopping sessions, to looking at a sample of more than 7 billion. The larger sample should provide a more reliable indication of broader trends.
Monetate provides e-commerce services to some of the world's largest online retailers, including Best Buy, QVC, and Macy's.
Download the chart and data in Excel.
