In the retail sector, the jury is still out on the effectiveness of social media relative to other marketing methods, in part because good metrics remain elusive. So says an Economist Intelligence Unit survey, summarised in The Social Shopper: Harnessing the Disruptive Influence of Social Media, sponsored by SAP. A striking 84% of respondents rate their effectiveness at measuring social media initiatives as average or poor. Only 4% say they have advanced metrics in place that can tie social media campaigns directly to retail sales.
“Retailers are still, for the most part, bootstrapping their social media investments,” says Gilda Stahl, editor of the report. “Because many retailers still regard participation in social media as an experiment, they are wary of dedicating significant investment to the channel.”
One in five retailers is not using any digital channels to communicate with customers. Nine out of every ten US Internet users visit a social networking site at least once a month, spending more than four hours on average on these sites monthly. So it is surprising that 21% of retailers polled say they are not using any digital channels to communicate with customers.
Product promotions are the low-hanging fruit of social media marketing, finds the study. More than half (56%) of survey respondents are using social media to promote new or existing merchandise, while 32% are offering coupons or other purchase incentives. While such promotions are consistent with the way marketers have always executed campaigns, these activities do not take full advantage of social media’s potential to help retailers develop a deeper understanding of their customers.
The study also finds that social media are slowly influencing other parts of the organisation.
More than one-third (37%) of respondents say they are currently exploring ways to incorporate social media insights into product and merchandising operations. And 15% say they have launched at least one new product based on social media insights.
To gain most advantage from social media, the report says, retailers can follow the following principles:
- Consistency. Implementing policies that ensure their brand promise remains consistent across all media channels, including social media.
- Community. Understanding that social media are not purely a communications channel– in which the retailer controls the message – but are more a community of individuals who share an interest in a brand, a product, or a category of products.
- Collaboration. Moving beyond the customer service objective and sharing insights among different departments.
- Commitment. Securing buy-in to the benefits of social media—from senior management to front-line personnel.
MORE ARTICLES ON SOCIAL MEDIA