Recent research from Business Insider found that Americans spend more of their online time using social media than anything else. 60 percent of social time is spent on smartphones and tablets.1
According to Internet Retailer's 2015 Social Media 500 study, purchases totaling $3.3 billion were directly influenced by social media in 2014, up 26 percent from 2013.2 Drilling down to a much more specific example, a study from Netbase and Edison Research found that 3 in 10 American women consult Facebook when making a purchasing decision about professional clothing.3
Clearly, social media has changed consumer shopping and research behaviors and most of the retail industry has taken notice. The Brandwatch Retail Report found that seven in 10 leading industry executives believe social media has a significant impact on their business.4
Yet Brandwatch also discovered that the majority of retail brands don't listen to their customers on Twitter. For example, only 46.6 percent of retail brands engaged with any tagged @mention. Less than two thirds responded to direct @questions, while complaints were virtually ignored.
Retail brands that are succeeding with social media realize that it's not just about offering discounts and coupons and chasing "likes" and "follows." Shopping is a social experience and consumers like to talk about their experiences before and after the sale. That's the "social" in social media. In fact, a Harris Interactive poll found that seven in 10 consumers will reward a retail brand or store for a positive experience with future purchases, even if they could get the same item for a lower price somewhere else.5
Social media has become an integral part of the customer journey. People bounce back and forth from the store to the website to their favorite social media sites. Retail organizations seeking to offer a truly omni-channel experience must factor social media into their marketing strategy and deliver a seamless experience on relevant social channels.
Beyond marketing pitches and financial transactions, social media allows retail brands to have more meaningful interactions with customers. Companies can personalize their brands and develop relationships that lead to long-term loyalty. Social media helps brands become more human.
By listening to customer needs and desires and mining their social profile data and behaviors, retail brands can use these valuable insights to deliver more relevant content and improve the customer experience. This information can also be used to improve ad messaging and placement and build email lists. Many companies are upgrading from traditional customer relationship management (CRM) systems to social CRM's to take full advantage of social data and strengthen relationships.
Facebook, with more than 1.4 billion active users worldwide, plans to make these interactions even more personal. The social media giant recently announced the launch of "Businesses on Messenger," which will allow companies to directly connect with customers via Facebook's Messenger application. This could give consumers the ability to receive order notifications via instant message or even make purchases through the app. The goal is to simplify the online shopping process and remove unnecessary clicks and e-mails. Businesses on Messenger, which will be rolled out in the coming months, is considered Facebook's attempt to have a more visible presence in online retail and e-commerce and further integrate social and shopping.
Unfortunately, social media isn't all flowers and rainbows. Just like social media chatter can quickly spread the word about what you do well, negativity has a tendency to spread even more quickly. Companies that use social media effectively are able to quickly respond to positive, negative and neutral comments so they can better control the conversation. The damage is done when negative comments and complaints are allowed to linger. Monitoring and responding to social media chatter has become essential to effective reputation management.
Measurement of ROI also continues to be a challenge for retail brands. Although social media channels like Facebook offer granular analytics, it can be difficult to connect social media investments with sales. A significant portion of social media's value lies in its ability to influence behavior and cultivate relationships, and the price tag of each of those behavioral changes and relationships is not easy to quantify.
How is your company using social media? What has worked? What hasn't worked? What metrics are you using? If you're not using social media, what are your reservations? RVCF wants to hear what you have to say. Please visit the RVCF forum boards and share your thoughts and ideas about the impact of social media on retail.
CLICK HERE to return to the MAY 2015 RVCF LINK