In the previous post, the decentralization of e-commerce, I laid out how e-commerce goes from marketplaces to independent retailers and how social networks offer native storefronts, which disrupts their ad-marketplace nature.
In this post, I want to go a step deeper and look at the impact on SEO and how social networks might have an edge in a growing but specific part of e-commerce.
A follow-up question I want to answer is, “What’s the role of SEO in a decentralized e-commerce world?” The question has two angles: SEO as a channel and SEO as an industry.
SEO as a channel for e-commerce
To understand the impact of storefronts on social networks on SEO as a channel, we just have to look at marketplaces like Etsy, Amazon, Ebay, or Walmart. The implementation might be very similar.
I recently ordered a new coffee kettle from Fellow, which has an Amazon store and their own site. Fellow.com gets ~60K branded and ~36K non-branded visitors to their site every month.
Amazon doesn’t have a subdirectory for store names, just amazon.com/stores/page/, but with SEMrush, we can search for a keyword in amazon.com’s URLs and add up the traffic.
For August, I get to roughly ~7,250 monthly visits when adding up traffic from each Fellow page on Amazon. Fellow’s products probably get some of the traffic from category pages, for example “electric kettle’ (amazon.com/electric-kettle/).
Amazon’s electric kettle page gets ~22.5K monthly visitors but the competition for Fellow is fierce: the category page lists 40 kettles. If each of the 40 got an equal amount of clicks from organic traffic, they would get 550 clicks (22,500/40). However, I suspect a few well-rated or highly-ranked products getting most clicks, which we generally consider a power curve.
To draw a line under the calculation, Fellow gets a lot more organic traffic from its own site than its Amazon listing. Keep in mind this is just one example and there might be others that tell a different story but in this case, having their own site is a good thing for Fellow.
SEO as an industry
SEO jobs have exploded since the pandemic. To be clear, some SEOs also lost their jobs and that’s tragic. Across the board, though, we see more opportunities than ever before: Indeed lists over 11,000 full-time SEO jobs in the USA as of August 2021. Over 2,000 have a yearly salary higher than $90K.
Even if some shops move on to a social network, I wouldn’t expect SEO to become redundant for e-commerce. There will be enough independent merchants left, just like not every shop is exclusively on a marketplace today.
Independent from SEO jobs, businesses need to understand the difference between rented and owned web property.
Rented vs. owned web property
Any platform other than your site is not 100% in your control. Channels being subject to filters and algorithms is one thing, but your whole business being at risk of losing visibility is a different thing. Look at what happened to publishers when Facebook turned the visibility faucet down.
The downside of independence is that you have to build your customership and audience from the ground up. You cannot tap into an existing network of users that might be ready to buy, unless you pay for it.
Storefronts on social networks might not be that different from marketplaces. Both commoditize stores and show many (40!) results next to each other. For consumers, it’s like standing in front of 100 cereal boxes at the supermarket.
Native storefronts might also limit customization. If a marketplace or social network limits how your storefront looks, you have fewer leverage points for differentiation. Every brand looks the same, hence commiditization.
Owned web property also allows you to build direct relationships with your customers and own customer data. Building on rented land means when you want to move out, you leave with empty hands. I can’t take my Twitter followers to Tik Tok or export the emails from my paid Apple Podcast (I don’t have one, just to be clear).
It’s like working for a company to help someone else build their business or start your own company. Both have up and downsides. Working for someone else lowers your risk and provides a certain level of plannability. Building your own company increases your chances of making a lot of money and working on what you want to work on.
It’s important to be aware of the trade-offs.
More reasons social networks go after e-commerce
In the last post, I mentioned three reasons social networks go after e-commerce:
- Covid kicked e-commerce 10 years into the future and widened the market
- The rise of the creator economy, which floods the market with more merchants
- Growing problems with ad targeting due to browser tracking
From what I can see now, there are two more.
According to Alexa Internet, SEO is the largest traffic source in 15 of 20 industries with a share of 33-59% (source). In 2017, SEMrush found 37.5% of traffic comes from organic search and only 1.9% from paid (source).
Here is the kicker: both analyses found that only 2-4% of total traffic comes from social (exception: news). Traffic from social networks doesn’t even come close to organic or direct. Paid social is a different story but organically, Social networks don’t play in the almost $5 trillion USD e-commerce industry (source).
Let’s make this more tangible. I looked at 3 successful shops and their traffic distribution (data from SEMrush Traffic Analytics, August 2021, US):
Gymshark - 5.9M visits
- Direct: 53.6%
- Referral: 5.5%
- Search: 29%
- Social: 3.6%
- Google Ads: 8.2%
Fashion Nova - 14M
- Direct: 70.2%
- Referral: 5.7%
- Search: 19.1%
- Social: 3.6%
- Google Ads: 1.3%
Matcha.com - 63K visits
- Direct: 55.6%
- Referral: 0%
- Search: 33.3%
- Social: 3.5%
- Google Ads: 7.5%
Social traffic is not significant, which brings us to reason number 1: social networks want a piece of the pie. You could argue they already got one because a lot of ads are run for e-commerce stores. However, success still depends on merchants adding a pixel, understanding the metrics, and fine-tuning ads. With a native storefront, the social network could do all this for you and maybe even automate it with machine learning. All you would do is pour money in and get money out.
The second reason I think social networks go after e-commerce is video. When I think about what value proposition or edge social networks have over e-commerce marketplaces, video is certainly one of them.
Instagram boss Adam Mosseri declared that Instagram is no longer photo sharing app. It’s now a video-first social network and Mosseri explicitly calls out that Tik Tok and Youtube are direct competitors.
Video commerce is already makes a ruckus in China where Taobao generated over $18b in sales in 2018 (source).
Amazon already shows livestreams on its product pages:
Video commerce is growing fast and social networks, except for Twitter, already have a footing in video. It’s a strength they can lean on. Not to jump on this opportunity would be foolish.
Where marketplaces need to add video and fundamentally change the user experience, social networks already have native video features and user habits. The timing of these developments - video-first, creator economy, ad mistrust, social commerce - is no accident.