This May Be The Biggest Barrier Stunting America’s Innovative Startups
The most pervasive barrier stymying the advancement of tech-focused American startups can be boiled down into one word: disconnectedness.
You know those sponsored posts and video ads you’ve been seeing all over social media? Well, this may finally be the year that so-called “buy buttons” go one step further, allowing users everywhere to purchase products directly from their favorite social media sites.
These days everyone from Facebook to photo-sharing site Instagram is experimenting with ways to make it easier for consumers to buy products online. Even Twitter has their own limited version of a shopping application, while image-collecting site Pinterest hopped on the bandwagon in 2015, covering their sites in what they’re calling “shoppable pins.” Some tech giants, namely Facebook and YouTube, are still testing buy buttons.
Buy buttons allow consumers to purchase whatever they want in real-time via popular e-commerce platforms, such as BigCommerce and Shopify, effectively turning these social sites into marketplaces.These e-commerce platforms facilitate online sales and range in price. For instance, Shopify offers all-in-one plans for businesses that start at $9 and come with transaction fees of 2.9% plus $0.30 for every sale via its platform.
In theory, these buy features should not only increase revenue for participating businesses, but also boost engagement for the platforms they reside on — a win-win for both enterprises. However, for small businesses with limited time and demanding budgets, it’s worth asking whether making their wares shoppable on social media is a worthwhile investment.
The meteoric rise of the buy button in recent years can be traced to increased mobile use and the natural evolution of shopping habits, says Mike Manning, a public spokesperson for Facebook. Most users now use a phone as their primary device, which means that it’s up to companies to provide an easier way for people to engage with their products.
Facebook is currently testing out its own buttons with select small businesses in the U.S., though Manning couldn’t divulge when the buttons would go live. Manning says Facebook won’t take a cut from purchases made on the site. Rather, he says that it’s in Facebook’s best interest to offer shopping services so that users don’t have a reason to leave the site.
Tim Richardson, a professor of ecommerce at Seneca College and the University of Toronto, sees this new e-commerce channel as a must-do for businesses. The power of being able to buy on demand is simply too convenient for consumers to ignore, and for now, while it’s not a universal offering, it’s a great way for a small business to stand out from the competition – or keep them from leaving a business site and going to Amazon.
“You’re cutting out the middle men and shortening the time between when you make the thing to when it arrives at someone’s door,” he says. More importantly, shoppable buttons allow businesses to find consumers on sites they already use frequently.
Still, the buttons aren’t yet perfect – if they were, they’d probably be more widely adopted by now.
“Everybody from the New York Times to the Washington Post has been asking me, ‘The buy buttons are coming, what’s going to happen?’ for years,” says Nora Barnes, director of UMass Dartmouth’s Center for Marketing Research.
One potential reason for a slower-than-expected rollout? Payment.
“PayPal has become the payment choice for many, but most of the systems will use something else,” Barnes said. “We don’t have a universal payment platform (that all social sites use), and a lot of people find it inconvenient to have several payment platforms.” Dealing with several payment sites may sound like a nightmare for consumers, but for small businesses that must manage those systems, it can be even more of a headache.
Another pain point, says Barnes, is that instant buy buttons largely eradicate the ability to read reviews. “A lot of people like looking at reviews – millennials average 10 reviews before they make a decision or purchase,” she says, referring to a recent UMass study about buying habits.
Still, Richardson would argue that businesses can’t afford not to engage in the next big shopping trend. “It doesn’t matter whether you’re a small business or a big business. People will give up if they don’t see what they want. You need to be where the people are.