Does Social Media Work For Retail?
Posted on February 11, 2011 by Bill Hansen
Just because we’re in the traditional advertising business doesn’t mean that we have a chip on our shoulder regarding social media. In fact, anything that helps local businesses grow is a good idea in our view.
But a study published this week raises serious questions about how Social Media is being used in retail: the finding suggest SM does much less for local retailers than many expected. The analytics firm ForeSee Results found that social media drove just 5% of visitors to retail Web sites. On the other hand, “promotional emails, search engine results, and [traditional] advertising are more influential,” it says.
In fact, the study found that more traditional marketing techniques not only generated more traffic, they also deliver better-quality customers. “Some of the most satisfied site visitors arrived at the site because of previous familiarity with a brand, promotional emails, word-of-mouth, and product review websites,” it says in its report. See the study details after the jump.
The Big Ideas:
- We don’t disagree with this research. Social media is clearly still in it’s hype stage and there’s a lot of experimenting going on and a lot still to be done. But don’t write off social media. We’re still in the 2nd inning with this rapidly evolving platform and consumer expectations and norms are changing continously. Get out there, get comfortable in the space, and experiment. Get ideas from people half your age.
- Social media is not ‘one thing.’ Different types may have different benefits to your business: watch them all. The goal of any local business shouldn’t be to just drive traffic to its web site. It should include building the brand, informing those that want to be informed, and improving its relationships with customers – and last but not least: driving store traffic! Yelp.com is social media that impacts expectations and perceptions. The Facebook ‘like’ button can influence thousands of people at a time. Same with ‘check-in’ sites like Foursquare.com. Group buying sites like Groupon are social and they can drive huge traffic spikes (just be careful how you use them). Even Google is building social into it’s index for search. Be broadly social, regardless of its immediate impact.
- We strongly agree with one thing here: Email works. The problem with email is that it’s difficult/expensive to reach people outside of your own customer base, so it’s a tough putt for new customer acquisition. With strict ‘opt in’ laws, you run a big risk buying email addresses and many of those you can buy are long-since dormant. You can solve this problem by leveraging other people’s email lists. Start with your local media outlets. Our radio stations have listener email programs that you can usually use to get the message out to thousands of new prospects and ask for your own opt-ins. Consider more creative approaches, like partnering with another complimentary business to reach a broader base. Use traditional advertising to drive people to your site for a reason (a discount, gift, etc) and get them to register as a condition of taking the freebie. Even consider designing a promotion with a large local media co (radio is perfect), to use your advertising dollars to drive entries for contests and fun activities. Again, the goal here is to get them to register so you can communicate directly later. You don’t even need a website for this – your local station can drive it through theirs.
An Overview of Survey Findings:
Here’s the article in MediaPost.
Survey respondents were asked what factors were the primary influence to a store’s Web site, and 38% say it was familiarity with the brand, while 19% say it was due to promotional emails. Search engine results, word of mouth, and ads (newspaper, TV, radio or magazine) were each named by 8%. Just 5% said social media was the primary influence. Some 3% cited blogs, while 2% named both shopping comparison Web sites, and product review Web sites.
The study uses the same methodology of the American Customer Satisfaction Index and is based on a sample of 10,000 adults.
ForeSee, based in Ann Arbor, Mich., also asked participants to name their preferred method of communication with a retailer, and overall, only 8% named social media. Mobile is even less popular, with only 5% saying they prefer to communicate that way. Emails, with 64%, were by far the most popular, followed by snail mail, 25%; Web sites, 21%; and TV, 11%.
“Every retailer should know how many customers are influenced by promotional emails, advertising on Facebook or word-of-mouth recommendations, and furthermore, they should know which group is most likely to buy,” Larry Freed, President/CEO of ForeSee Results, says in the report. Here’s a link to the full research
“Serious thought needs to be given to finding out whether social media is worth the investment for their business, and then if the answer is yes, they need to make the most of it by making sure that interactions on social media meet the needs and expectations of customers. Otherwise, the effort is wasted and could even be detrimental to the business.”
Here’s a link to the full research. Note: they’ll ask you for your email address in order to add you to their communication stream. The experts know that email works!
