S-commerce sales to more than double within the next 5 years

With Facebook membership fast approaching

a billion users and Twitter having more than 100 million active tweeters around the world, social media is becoming increasingly important for retailers, and new research from banking group Barclays shows that S-commerce sales are to more than double to £3.3 billion within the next five years.

Almost a third of online shoppers are active users of social media according to the Barclays Social Media Commerce report, and it states that the next generation of ‘social shopper’ is expected to emerge as a ‘force to be reckoned with by 2021’, with 41 per cent of all UK’s shoppers expected to be influence by or using social media to make a purchase.

Amongst 25 to 34 year olds this figure is much higher with nearly half (45 per cent) of this age group already engaging in s-commerce, by 2021, this figure will have jumped to 73 per cent.

Around 70 per cent of online shoppers are already active users of social platforms, and where social media is really coming in to its own is as an influencer and multi-channel integrator rather than a direct sales channel. Users are receptive to new ideas, suggestions and recommendations when on social networking sites but are not in an active state of mind to purchase. Translated into revenues, in the next five years influenced sales are expected to more than double from £1.4 billion to £3.3 billion. This contrasts with direct sales which are expected to rise from £210 million to £300 million.

The influenced and direct value of social media currently amounts to around £1.6bn. Around 13 per cent of this value or £0.2bn is derived from direct spend, i.e. spending generated directly via the social media platform. The rest and majority of social media’s value (£1.4bn) is generated by influenced spend, where social media has played a role in any part of the purchasing process.

Social media however, is still in the early development stage, accounting for around 7 per cent of total online retail sales, and 0.5 per cent of total retail spend. The retailers enjoying the greatest uplift in sales as a result of social media’s increasing influence are fashion, footwear, music, film and grocers. The report also highlights key brands that have successful social media strategies including Burberry, highlighting its early adoption and continuing innovation on various social media platforms.

Richard Lowe, Head of Retail & Wholesale at Barclays, said: “Shopping has always been a social activity right back to the days when people bartered rather than paid for goods. It wasn’t until the arrival of e-commerce that the social aspect of shopping was removed.

“For most consumers the social element is fundamental – shopping it is a leisure activity in the British psyche – so being able to reintroduce this aspect into the online purchasing process is a powerful tool for retailers. When someone you know and trusts makes a recommendation it’s extremely powerful and we’ve seen that the social shopper isn’t afraid to express online how much they want, love or dislike a product or service.”