The Swiss decide to rock the markets

The Swiss central bank has removed the peg to euro today, which instantly resulted in a market tumble, as the franc jumped almost 30% in value.

As Swatch CEO told Reuters:

Swatch Group chief executive Nick Hayek called the Swiss National Bank’s decision to discontinue the minimum exchange rate on the Swiss franc a “tsunami” for the Alpine country and its economy.

So far the Swatch Group is down by 10%, Richemont by 11%.
What does it mean for the luxury goods industry? Will the franc stabilise quickly? If not, we will definitely see price increases across the board. Will this also result in a great year for non-swiss watch brands, like Bremont? Time will tell.

The twittersphere reacted with the usual diligence:

 

Social media, e-commerce and conversion rates

The Christmas shopping bonanza is peaking just about now, and while we’re a bit quieter, t here’s time to look at some figures.
For quite some time now we were leaning towards the opinion that while social media are a fun channel to engage on, they don’t exactly convert when it comes to purchases. Looking across the board on all our sites, those trading actively and those that are catalogue-only, we are definitely seeing a trend. Below I’ve shown stats for two of our of our most active retail sites:


Website 1

Organic traffic: 45% of acquisition and 56% of sales with 1.95% conversion rate.
Direct: 20% acquisition, 19% of sales and 2.05% conversion rate
Email accounts for 10% acquisition and is responsible for 9,5% of transactions, with 1.67% conversion rate (bounce rate is 31% against site average of 29%
Social media account for about 2% of acquisitions with 1.1% of transactions, with 0.73% conversion rate (where facebook sports 0.72% conversion rate compared to twitter’s 2.65%) (bounce rate is 26% against site average of 29%).


Website 2

Organic traffic accounts for 49% acquisitions and 51% of transactions, with 1.52% conversion rate
Referrals: 22% of acquisitions but only 6.5% of transactions,
Direct: 17% acquisition, 29% of transactions and 2.94% conversion rate
Email accounts for 11% of acquisitions and is responsible for 13% of transactions, with 0.90% conversion rate (bounce rate is 36% against site average of 26%)
Social media account for about 0.74% of acquisitions and 0.6% of transactions, with 1.04% conversion rate (bounce rate 47% against site average of 26%)
(again facebook drives 7x more visitors than twitter, but has lower conversion rate at 1.13% compared to 1.85% for twitter, but overall 4x the amount of transactions).
In multichannel funnels, email is involved in 16% of visits, while social doesn’t seem to be involved in any multichannel funnels at all.


Paid advertising is not included in the stats, but is a reasonably well-performing channel.

Across the board, the highest acquisition rate we’ve seen for social media is 3.5%, but it’s important to note that on that particular site the social media traffic did not result in ANY sales.


Our figures seem to be consistent with recent studies:

Direct email marketing is the most popular trigger for online shopping, suggests research from shopping and price comparison website Give as you Live, with 64% of consumers likely to stop what they are doing to click an email link from a retailer,

The study of 4,234 UK shoppers in November found that social media posts and advertising were less appealing – wooing a comparatively meager 10% of shoppers each.

via dotrising.com


CONCLUSIONS

Well, put it simply, the social media don’t seem to be a key acquisition channel, both in terms of visitors and definitely when it comes to transactions. The social media figures above do not include any paid advertising, but even then the conversion rate seems to be in the lows.

Of course, as part of our clients’ websites’ objective is to drive more traffic through the door, we can’t exactly say that the social media never result in sales. I am looking at the above figures as indication only, but they do confirm that onboarding, targeted email campaigns and acquisition through optimization and referrals are more important to invest effort into, than social media.
I am not saying that we should abandon marketing through social media or stop using them, not at all. Social media are a GREAT channel when it comes to raising brand awareness, customer service and communications. But I have been to a couple of seminars for retailers recently, where we were told that the best investment now is to send staff for social media training, and I disagree with that.
There are so many better areas to explore, educating the staff on how to improve content in the new digital environment in general, get them more involved in creating content, improve CX using the chat facilities, training on how to write engaging newsletters and create personalized emails to customers, would all be a better investment in my opinion.