Online retailers still waiting to sell directly via social media

Social media shopping is in vogue, yet almost half of Swiss online retailers do not yet want to use the announced option for direct sales via Facebook and Instagram. However, many expect social commerce to increase sales in the future, as a new study by the ZHAW shows.

On Facebook and Instagram, Swiss users will in future also be able to order products advertised directly on the platform without having to switch to the provider's web store. This process is called "direct checkout.

Swiss online retailers are still reticent about this new function: 42 percent of the companies surveyed are critical of its use and want to wait and see for now. 28 percent are likely to use Direct Checkout. However, only two-fifths have actively addressed the issue at all.

These are the results of a study conducted by the ZHAW School of Management and Law. The researchers surveyed over one hundred Swiss online retailers and experts in the field of social media and e-commerce from April 13 to May 19, 2021. The study was conducted together with the agencies Webrepublic and B+H Communication and the consulting firm Carpathia.

No substitute for the online store

"Most companies assess Direct Checkout as an additional sales channel that will complement their existing online store, but not replace it," explains study leader Darius Zumstein from the Institute of Marketing Management at ZHAW. Accordingly, only slightly more than a quarter of the companies fear that visits and sales in the online store would decrease as a result of using the new function. In contrast, 72 percent of the companies expect an increase in their overall sales.

More spontaneous purchases

Around eight out of ten of the companies surveyed said that other benefits include a seamless shopping experience for customers and the promotion of impulse purchases. In addition, many companies expect a more targeted approach and more direct interactions with their target groups. "Online retailers are often already active on Facebook and Instagram. Facebook and Instagram stores enable them to increasingly encourage their customers to buy where they spend a considerable amount of their time," says Zumstein. "Being able to buy products right where you're inspired makes online shopping significantly easier and faster." About 80 percent of the companies see a disadvantage of the new sales channel in the fact that control over customer data lies with Meta, the operator of Facebook and Instagram. 

When selling via social media - s-commerce - the researchers identified fundamental differences in 30 areas compared to classic online stores - e-commerce. They also provide a series of recommendations for integrating direct checkout into the marketing and sales strategy: For example, they advise companies to sell mainly consumer and durable goods on social networks that appeal to emotions. They should also clarify the necessary processes and resources in advance.

Direct Checkout is currently only available to some online stores in the USA. The exact date of introduction for Swiss users and companies is still open.

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