Although some recent surveys have shown that social media’s contribution to e-commerce remains small, it’s still growing fast in relative terms. That’s according to a new report from Internet Retailer, which tallied online spending from social media and found that total sales increased 26% from $2.62 billion in 2013 to $3.3 billion in 2014.
Meanwhile, retailers experienced an average increase of 5.4% for traffic directed to their sites from social networks. The total number of Facebook likes for the 500 retailers surveyed by Internet Retailer increased 33% to 916 million, while their Twitter followers increased 26% to 89 million, and Pinterest followers jumped 16% to 35 million. YouTube views soared 78% to 3.89 billion.
However, like other businesses, retailers have seen their organic reach dwindle in recent years, particularly on Facebook, forcing them to spend more on advertising, according to Internet Retailer analyst Stefany Zaroban, who noted: “Merchants are having to spend more on ads to have their content seen by consumers. That’s because Facebook shows fewer of a brand or retailer’s posts to its fans now than it did a few years ago -- a strategy that effectively forces marketers to spend more on advertising to reach Facebook users.”
On that note, the online retailers surveyed by Internet Retailer who shared their ad spending figures had increased their average social ad budget 144% from $7.3 million to $17.9 million per month in 2014.
While the 26% growth rate is nothing to sniff at, as noted, social’s share of e-commerce activity remains fairly small. Separate figures from eMarketer suggest that total e-commerce spending in 2014 came to around $304 billion -- up from $263 billion in 2013. Putting the eMarketer and Internet Retailer figures together, e-commerce from social media edged up from 1% of total e-commerce volume in 2013 to 1.1% in 2014.
These numbers are roughly in line with previous reports; for example Custora’s survey of online shopping over the 2014 Black Friday weekend found that Facebook, Twitter, Instagram, and Pinterest contributed just 1.7% of total e-commerce sales.