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Surges In Social Media Contributing To E-commerce Boom

A CCW Digital Analysis On The Future Of Customer Experience



Matt Wujciak
06/26/2020

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Roughly five months into the COVID-19 era, many businesses today are in fight or flight mode, experiencing unforgiving consumer behavior trends and marketplace Darwinism. However, with Darwinism comes evolution. 

As a result, we’ve seen companies transition from overtly pushing products and services to every demographic imaginable to producing emotional (and in many cases altruistic “do good” ads). We live in a sensitive time and marketers have taken notice. 

Customer-centric businesses are trying everything right now, from shifts in marketing tone to increased investments in digital engagement. This can be internal (i.e. you may have noticed an uptick in Zoom, Microsoft Teams, or Slack meetings among employees) or external (i.e. social media engagement with customers). 

While consumers around the globe feel deprived of social interaction and businesses continue to attempt a blend of online and offline customer experiences, there is a silver lining to the COVID-19 pandemic - one revolving around the future of commerce. Even as many brick-and-mortar retailers continue to open, the future customer experience may be more digitally driven then analysts once thought.

Social media surge

Gains in time spent with social networks had stalled in recent years, but the pandemic has provided clear insights into the future of social media. This year, US adult social network users will spend 7 more minutes per day on social networks than in 2019. Instagram and Snapchat will benefit the most, and Facebook will see the smallest boost. 

Data shows stronger engagement with messaging apps and SMS, such as Facebook Messenger, WhatsApp, Apple iMessage and other messaging platforms as well. Time spent on mobile messaging among US adults will grow by 4 minutes in 2020, to 24 minutes per day. 

Keep in mind, consumer behavior dictates business continuity planning, not the other way around. In other words, when it comes to the customer experience, we want to engage with our target audience on the platforms they’re most frequently using, even if those platforms are changing. 

As bestselling author, former CX and social media leader at McDonald’s, Discover, and Humana, Dan Gingiss recently told me:

“The second titanic shift that I would say happened in the last year or so is that now there’s this move to messaging and that is part social because obviously we have Facebook Messenger. We have Twitter dm’s… but it also includes other chat categories like SMS.”  

Read More: How To Scale Conversational AI: Sponsored By IBM Watson

Have you recently found yourself purchasing a product or subscribing to a service, only to be redirected to a landing page that asks for more personal information, such as your phone number or maybe even your Facebook account? Depending upon the service or inquiry, more brands will be exploiting emerging chat channels such as SMS or Facebook Messenger. 

As digital engagement evolves and consumers spend more time on different platforms across different countries and demographics, customer-centric brands will continue to meet their target audience where they already are. Oftentimes, social media engagement, whether it be advertising campaigns or customer service communication spills into sales, having direct conversion rates for e-commerce businesses. 

Ecommerce surge

As the WSJ recently reported, spending on marketing rose as a share of companies’ overall budgets to 12.6% in May from 11.3% in January, according to the latest CMO Survey from Duke University’s Fuqua School of Business.

Spending on marketing also increased as a percentage of company revenue, to 11.4% in May from 8.6% in January, survey respondents said. The new levels are the highest since Duke began the survey in 2008. 

As social media traffic and omnichannel platforms surge in volume during the pandemic, so too do marketing budgets, and that’s certainly not a bad thing. U.S. e-commerce sales increased by 25% in the month of March alone. It was the start of a steady and unprecedented trend, reaching as high as  50% at the peak of the pandemic as consumers stayed home but continued to shop. 

Many demographics of consumers have even gotten accustomed to digital platforms and e-commerce services for products they didn’t traditionally utilize online capabilities for. 

Have you deliberately purchased any of these products or services online instead of offline because of the COVID-19 / coronavirus pandemic?

According to a Statista study regarding the U.S., Germany, and the UK as of May 31st, U.S. consumers had the following responses: Restaurant delivery / takeaway (31%), Hygiene products (27%), Clothing (26%), Household cleaning products (26%), Food and drink delivery from the supermarket (24%), Health products (21%), and more. 

(It’s also interesting to note that these percentages in the U.S. were either the highest or tied for highest of the 3 countries for 10 out of the 13 industries the study provided). 

While bad customer experiences in these industries cost companies revenue, great experiences drive spiraling advocacy. In fact, many studies indicate a good customer experience makes a person five times more likely to recommend a company and more likely to purchase from that brand in the future, usually through (digital) word of mouth. 

The online customer experience has spiraling results, and it’s no longer deniable. Nearly 84% of consumers are open to sharing positive experiences on social networks, according to CCW Digital research conducted in 2019, and that number is growing steadily throughout 2020. 

For one example, Netflix has enjoyed a massive uptick not only from people staying at home and binge watching, but people staying at home and scrolling through social media – ultimately encouraging more engagement -> more interest in binge watching -> and, of course, more Netflix sales. 

In April the company announced that it had racked up 15.77 million new subscribers in the first quarter of 2020, and now the analysis from the data and analytics company has shown that influencer discussions related to Netflix spiked more than 60% during March-May 2020. 

Back to social media 

“The single best way to market your customer, is to have other people do it… The research says that consumers are actually willing to share more positive experiences with their friends, with their family, on social media than they are negative experiences.” - Dan Gingiss. 

The fluid nature of social media platforms combined with emerging consumer behavior trends such as the rise of digital communication and media (whether it be video conferencing, streaming, or social media) makes it the perfect launch pad for storytelling, product launches and new initiatives, similarly to the way advertisers once utilized traditional TV advertising. 

As consumers have gotten more comfortable with frictionless, online customer experiences, the new era of e-commerce will be hard to get rid of. 

Marketers and customer experience analysts, (specifically in retail) need to think about what behaviors consumers have gotten used to during the pandemic. Is there a reason for consumers to get rid of those behaviors? If the answer is no, it’s time to adjust our products and services to accommodate those behaviors, even after a pandemic. 

And in many cases, that’s a good thing. It's clear that social media marketing isn't just a competitive advantage anymore. It’s one of the preferred engagement options for digital marketing and customer service teams alike, complementing other channels such as the phone or IVR. 

Visuals are at the heart of building a brand and maximizing ROI on any channel. Brands need to ensure that every visual they put in front of their audience inspires action.

For example, many brands have been incorporating user-generated content (UGC) and influencer partnerships (as seen in the Netflix example) into their strategies.

When UGC is done right, it often outperforms brands' average engagement and converts followers into customers. Seventy-nine percent of consumers say that UGC influences their purchase decisions, and over 44% of consumers between the ages of 18 and 34 have made a purchase based on a recommendation from an influencer. The impact of UGC and influencer photos and videos on online revenue is now undeniable. 

Consumers spend more time on social engagement platforms, making them more susceptible to brand advertising, increasing conversion rates for e-commerce.

Brand loyalty and top-of-mind awareness are long-term growth metrics that separate the industry leaders from the rest of the market. Especially right now, brands need to double down on social engagement to reach consumers through authentic storytelling. 

Identifying your audience 

If your audience doesn't feel connected with your brand beyond a transaction, they are more likely than ever to switch to the next best option. 

In fact, as WSJ and NYT’s bestselling author, and #1 CX and customer service influencer, Shep Hyken stated in a 2018 Forbes article

NewVoiceMedia’s 2018 “Serial Switchers” report reveals that poor customer service is costing businesses more than $75 billion a year. That’s up $13 billion since its last report in 2016. 

When I asked Shep about the concept of serial switchers, he replied:

"I mentioned this in one of the speeches I keynoted at CCW… You have to recognize 75 billion dollars may be lost. But guess what that means? Somewhere, somebody did it right..” 

While social media is a larger component of the customer service and CX landscape than ever before, a larger percentage of that lost revenue comes from poor social media encounters with consumers. For many advertisers right now, that can mean something as simple as an insensitive Instagram ad. For customer service teams, that can mean failing to reply to an SMS or DM within 30 minutes. 

But as Shep mentioned, it can also result in gained revenue for the ones who did do it right.

To foster a community that connects with your brand, authenticity and genuine empathy should be your top priorities online, especially during sensitive times, harsh economic circumstances, and unpredictable shifts in a marketplace. The brands that show up and are there for their communities through thick and thin are the ones that will see long-term growth in return.

Take a stance and share what your brand cares about and educate your community with long-form content through IGTV, Instagram Stories and YouTube. These tools and mediums empower brands to offer a closer glimpse into their team, products and roots with behind-the-scenes content. 

Authenticity is one of the greatest social media marketing strategies right now. The better we are at it, the more relatable our brand is, the more engagement we drive, and the higher our conversion rates. 

But remember, social media engagement is not about being everywhere, but rather focusing on niche channels to target customers that are more likely to contribute to your customer-lifetime-vale (CLV) metrics. 

"Do I have a snapchat account? Yes. But it’s mostly to make sure by son’s not getting into trouble. I practice that too, and I think companies will do well when they find the channels where their customers are, where they can really be good… don’t worry about being everywhere." – Dan Gingiss. 

No one’s safe from the behavioral economic consequences brought upon by the coronavirus. But adapting to the right CX strategies and consumer behavior trends will give you the best chance at being on the favorable side of financial Darwinism. 

For media coverage, lead gen, and digital marketing inquiries, contact me at matt.wujciak@customermanagementpractice.com.

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