Cyber Monday proved to be the biggest shopping day of the year, especially for digital commerce. IBM’s Digital Analytics Benchmark reported that on-line sales were up 20.6 percent for 2013 compared to last year’s figures. How people make decisions and actually buy has shifted once again and three key trends are emerging:
(1) Mobile sales are skyrocketing! Not that long ago, there were plenty of retail experts who doubted that mobile shopping would never really take off. Yet this year mobile traffic accounted for 31.7 percent of all online traffic, up more than 45 percent compared to last year, and generating more than 17 percent of all online sales.
(2) Social content is a key underlying influence that we should be thinking about. That is, to what degree were the purchasing decisions on Cyber Monday shaped by the opinions of social peers, social content and thought leaders? Social influence attracts the same kind of skepticism as mobile ecommerce did in the early days. While it’s harder to measure social influence, it clearly accelerated in 2013. For example, I often find myself researching a product across my social networks before opening a browser to buy it and I’m not alone – consumers are 71 percent more likely to buy a product when referred by social media.
(3) The millennial generation is now having a big impact. Millennials make more mobile purchases than any other generation. Furthermore, there are now 72 million people in this group in the U.S. alone (18-32 years old). They have the biggest combined purchasing power—nearly $2.5 trillion—worldwide of any generation in history. Roughly 63 percent of millennials keep up with their brands of choice via social content and 84 percent report that word-of-mouth plays the biggest role in influencing their purchasing decisions. Clearly, millennials and their buying behavior are of critical importance to business.
On the other hand, two-thirds of all Americans are on the FTC’s Do Not Call List and 86 percent mute the TV or change the channel when an ad comes on. We also know that the brand experience is now starting to supersede the value of the actual product. The combination of these trends is why I am so strongly encouraging all of our customers to activate their digital ecosystems to transform their customers’ experiences and sell in the way people want to buy today.
I’m betting that enterprises of all types, but especially retailers, will need to place social at the center of their interactions with customers. We’re talking about integrated toolsets that improve self-discovery of goods and services, marketing effectiveness, online sales, service and loyalty programs. Social communities may well prove to be your best and most effective marketing, with many actually transforming their customers into virtual members of their extended sales force! Increasingly sophisticated analytics will underpin all of these investments and shed new light on the revenue generated by social referrals.
All businesses are becoming social businesses, whether they realize it or not, as the fundamental behaviors of how people consume is changing. The question is, are businesses ready to harness this new reality or just sit on the sidelines?