Mobile shopping rose while social media sales fell, providing an indication of where US retailers may invest in order to capture the attention and loyalty of the digital consumer, according to a new report from IBM.
The IBM Retail Online Index, a cloud-based analysis of the online retail sector reported that retailers experienced 15% growth in sales from mobile devices but saw a 20% decline in sales traced to social media based on a much smaller base over this three-month period.
The IBM Retail Online Index integrates factual marketplace data from its analytics offerings including the Benchmark with insights from the IBM Social Sentiment Index, an advanced analytics and natural language processing tool that analyzes large volumes of social media data to assess public opinions. The combination of these two offerings provides the most accurate and immediate snap shot on the state of the online retail market.
IBM’s Retail Online Index identified several trends of importance to chief marketing officers (CMO), e-commerce leaders and customer service professionals.
Over the second quarter, consumers continued to embrace mobile devices as a shopping tool, with mobile commerce accounting for 15,1% of all online purchases, an increase of more than 14 percent. Despite this momentum retailers are still struggling to sustain substantial success with their social media efforts, evidenced by a more than 20% drop in social shopping.
According to IBM’s State of Marketing 2012 survey, one explanation for social commerce’s failure may be the absence of a CMO (chief marketing officer) and CIO (chief information offier) alliance, which is critical as marketing and online commerce become increasingly technology-driven.
The lack of this alliance hinders the deployment of integrated technologies capable of fueling effective social media efforts. A second factor is marketing’s inability to form a clear consensus on how to utilize social channels. As a result, the retail online index saw a decline in positive sentiment around social media, which according to the online index dropped from 25,1% in Q1 to 18,6% in Q2. Leading factors for this shift were the lack of deals being offered by retailers through these channels, which were more prevalent in Q1.
“Shoppers today are shifting from a singular online approach to a multi-channel experience that includes both mobile and social media. As a result, retailers must be prepared to connect with their customers on all fronts, or lose them to the competition,” says Craig Hayman, GM of IBM Industry Solutions. “As we enter the home stretch for the 2012 holiday season, we will continue to watch how CMOs and CIOs tackle these challenges and create social media efforts that deliver value to the customer while driving revenue for the business.”
Over the second quarter, while online traffic and sales for Q2 were down 6,7% and 2,3% from Q1 respectively, there were signs of optimism. Specifically, for completed orders, shoppers bought more items (average items per order grew 2,6%) and spent more for each transaction (average order values for each purchase grew by 2,3%) over the second quarter..