Stephanie Himoff, VP of sales and business development for Demand Media in Europe, looks at how retailers need to understand the true value of social media to make it work.
Change is afoot. More and more the phrase being bandied around progressive marketing departments across the country is not social media but social commerce. This reflects the growing desire on the part of companies to find ways to make money from the new engagement tools that social technologies provide.
The big retail brands were pretty quick off the mark when it came to the internet game, and the likes of Ocado, tesco.com and Sainsbury’s Online are among the biggest online retailers. However, to date few of them have embraced social media, and as a consequence have failed to engage as deeply as they otherwise might with their increasingly important online audience.
Retailers in the US have been quicker to realise the benefits of making their online experience more social. Not surprisingly, they have concentrated their use of social media at the point of purchase. Product ratings and reviews have been very popular among these pioneers, because they allow customers to influence each other during the purchase process and provide product and marketing feedback to the retailer.
Even US retailers for the most part have been slow to understand the full power of social media, but there are a few organisations that have expanded their use of social media beyond the point of purchase and into their customer acquisition, customer engagement, brand affinity and customer relationship management endeavours. These trailblazers often have begun to realise the benefits of offering a truly social internet experience, and their efforts gives some insight into what the future looks like for brands here in the UK that are prepared to take the next step on the internet.
The first lesson pertains to customer acquisition. Pioneers like Lowe’s, the second largest home improvement retailer in the US, have found that social media can be a very effective source of new customers; and in fact, it turns out that social media is especially good at attracting intent-driven audiences, people who come to a Web site with a well-defined purpose. The key is social content.
Search-optimised content – keyword-rich, relevant content deployed in an SEO-friendly way – will drive new site traffic for retailers, just as it does for successful Web publishers. Retail destinations are a natural place to have product or lifestyle content (e.g., “Refreshed Kitchen Countertops” at Lowe’s Creative Ideas). Online communities predictably generate large volumes of content that perform well in organic search, and attract intent-driven audiences making complex, long-tail queries. Lowe’s invites community members to document their home improvement projects, and these journals bring project-focused visitors to the Lowe’s destination.
The second lesson relates to customer engagement. Not everyone who arrives at a retail site is ready to make a purchase. And most retailers want to turn a one-time buyer into a lifelong customer. Social media can play a very significant role in helping a shopper become emotionally attached to a retail brand and, ultimately, make a retailer’s destination part of the customer’s online routine. Content has a role to play here, too. Retailers can promote their own staff and expert customers with informative blogs that establish the company’s commitment and authority. But conversation and interaction are equally important. Forums can become a valuable source of insight for shoppers, product owners and retailers alike. Social networking and group features can encourage like-minded people to build personal relationships around topics that are central to the retailer’s business.
Southwest Airlines, the largest US passenger airline, does more than sell airline tickets on its Web site. It has made its site into a social destination with a wealth of resources for travelers. It sponsors online conversations concerning a range of topics, everything from what to do in cities that Southwest serves to travel themes and activities. And of course, Southwest’s e-commerce engine is only a click away.
The third lesson, of course, pertains to conversion. As the trailblazers have demonstrated, social media can have a measurable impact on conversion rates. Ratings, reviews and product forums are essential to retailer efforts to drive conversion rates. These social technologies connect users with shoppers in a question-and-answer experience around product features and benefits, allowing users to influence each other in the purchase decision. Nielsen reports that 70 percent of people trust recommendations from unknown users online, and nearly half of US online adults read ratings and reviews at least once per month, according to Forrester.
The final lesson for UK retailers is around the importance of embracing the larger social Web. Retail site content and social experiences work even better when they are not in fact confined to the retail site. Smart retailers will let their customers syndicate, share, and distribute the content elements of the online shopping experience across the Web via a technique we call “social bridging.” Social bridging lets retailer sites connect with the Web’s popular social destinations. It makes it easy for enthusiastic members of these sites to communicate their enthusiasm to their friends on Facebook, followers on Twitter and similar destinations. It also makes it easy for enthusiasts to bring their “real” friends back to the retail site to share that experience and, ultimately, to become customers there.
Most retailers have only begun to capture and channel the power of social media. But there are retailers who through hard work have learned the four lessons outlined here. By building and maintaining vibrant communities that tap into the passion inherent in the retailer’s core audience, spreading that passion to the larger Social Web, and offering up to the community a steady diet of both expert- and user-generated content, retailers will scale their businesses and engender loyal and engaged customers. This is when social media becomes social commerce, and it is at this point that you can start to think about how you use the social channels to sell.