Eighteen months ago the idea of social commerce, selling via a social media platform, was dismissed as too Amway-esque, ie if you try to sell to your friends they’ll get sick of you pretty quickly. Instead of conversions, engagement was the name of game and brands focused on building their audiences.
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That’s slowly changing, with social commerce gaining traction as channels such as Facebook and Instagram introduce more commerce functions. According to new research from PayPal and Roy Morgan, 11 per cent of Australian consumers report that they have made a purchase via a social platform in the past six months and 7 per cent of Australian businesses indicate they accept transactions via social media.
The stats are from PayPal Australia’s new mCommerce Index a biannual barometer on the state of mobile commerce in Australia released today. During a panel discussion at the launch of the report, Simon Holt, financial services partner for Facebook Australia outlined the shift in businesses approach to social.
“If you rewind a couple of years businesses were very focused on engagement and on building community but there was really a dotted line — or no line — to how that was impacting the goals of their business,” Holt said. “I think we have have worked really hard and still have some work to do to educate businesses and show them the value social media platforms can bring to their true business goals. Selling a product is ultimately the end goal to for most businesses. Over the last 12 months I think we’ve seen a real evolution in how clients are approaching the platform for those kinds of objectives.”
As social becomes more closely aligned with broader business outcomes, Holt said Facebook has seen the demand from consumers wanting to buy products on Facebook or Instagram.
“We have seen a real demand from users on our platforms on both Facebook and Instagram to be able to transact more easily on a platform,” Holt said, citing Instagram comments asking where can they buy featured products.
Last week Facebook announced changes to Messenger to allow businesses to sell products and services directly to customers in Messenger. Customers can check out with a few easy clicks, without ever leaving the Messenger app.
Libby Roy, managing director, PayPal Australia said she was surprised 11 per cent of consumers had transacted via social media, with Facebook being the standout platform with 75 per cent.
While early adopters in business aren’t far behind consumers, there’s a “huge gap between the early adopters and the majority in the business community, with 34 per cent of Australian businesses having no social media presence at all and 89 per cent of businesses stating they have no intention of accepting payments via social platforms within the next six months,” said Roy.
Social media is still a strong channel for influencing purchase decisions, with 18 per cent of respondents buying something after seeing it on social media, a figure that jumps to 24 per cent among the 18 to 34 age group. Despite this, 28 per cent of businesses don’t believe their customers want to buy via social media platforms.
PayPal’s mCommerce report didn’t reveal the size of Australia’s mCommerce market, or how much money is spent on mobile devices. According to the NAB Online Retail Sales Index, Australia’s total online retail spend is equivalent to 6.8 per cent of spending at traditional bricks & mortar retailers as measured by the ABS in the 12 months to June 2016.
According to PayPal’s research, consumers still prefer to shop on desktop or laptops over mobile or tablets (69 per cent versus 31 per cent). 30 per cent of the businesses surveyed by PayPal said 1 to 10 per cent of their sales came from mobile devices, while 20 per cent don’t know their mCommerce sales figures, see below.
According to PayPal’s survey, 71 per cent of respondents said that they use their mobile devices to make payments and 22 per cent said they spend more than $500 per month via mobile.
The Index found 49 per cent of online businesses are optimised to accept mobile payments (ie a responsive site, a mobile app or an msite), 31 per cent of businesses state they have no plans to optimise for mobile sales, which is reflected in the proportion of online businesses (26 per cent) which have zero sales via mobile devices.
“Australia has one of the highest levels of mobile penetration globally with 80 per cent of the Australian population owning a smartphone, so I was surprised to discover the low level of business readiness to accept sales effectively via mobile devices,” said Roy.