Social(izing) During the Holidays
Cross-channel retailers must focus on acquiring more social visitors this holiday season, as their value to brands is undeniable. According to the IBM Coremetrics Fourth Annual Online Retail Holiday Readiness Report, social media users are more than twice as likely than the overall population to convert into customers (10.7 percent vs. 5.2 percent). But the study also revealed that both site visits and sales by social media visitors accounted for less than 2 percent of each category's total from October 2010 to April 2011, although those figures did rise incrementally over the six months. While social visitors (Facebook fans, Twitter followers) have an affinity for your brand and are more likely to purchase from it, they still represent a small percentage of most retailers' customers.
Here are a couple of retailers that found success last holiday season using social media as a sales and customer acquisition driver, as well as a sneak peek into what they have in mind for this year's holidays.
Check-Ins Drive In-Store Traffic, Sales
Cross-channel electronics retailer RadioShack and Foursquare partnered last holiday season for a promotion that offered discounts to consumers who checked in with the location-based social networking site from one of RadioShack's 4,500-plus retail stores. Consumers received 10 percent off for every store check-in, 15 percent off for store "mayors" and 20 percent off for unlocking RadioShack's "Holiday Heroes" badge.
"Our original objectives for activating Foursquare were threefold," says Adrian Parker, social media director at RadioShack. "One, increase awareness of RadioShack in the wireless and mobile space. Two, test, learn and understand an emerging platform that's endemic to our brand. We've sold over 72 million cell phones, so we should have a stake in using the phone to communicate with our customers. Lastly was the idea of reciprocity — giving consumers something in return for checking in and purchasing. We saw it as a way for Foursquare users to rediscover RadioShack … incentivize them with an offer that's compelling and then try to close that sale."
Analytics revealed that those objectives were met. Up to 80 percent of the RadioShack Foursquare users were trying the site for the first time, indicating to the retailer that Foursquare was a viable channel for getting incremental shoppers into its stores. The majority of the transactions attributed to the Foursquare promotion were for wireless devices, helping RadioShack capture a larger market share of the profitable tech-savvy consumer demographic. To that point, customers driven to RadioShack via Foursquare spent, on average, 3.5 times more than non-Foursquare customers.
RadioShack tracked each Foursquare transaction via a unique code in its point-of-sale system. The retailer is currently tying its Foursquare purchases back to its customer database to get a better understanding of the lifetime value of those customers.
As for what role social media will play in RadioShack's 2011 holiday marketing plans, Parker says that you can expect to see the company's employees take center stage. YouTube videos with store associates talking about the latest electronic devices and a corporate blog are just two examples of RadioShack investing its time and resources in its employees. Campaigns and promotions will be spread out across the various social platforms, including YouTube, Twitter, Facebook and Foursquare. And don't be surprised if you see RadioShack doing something with Instagram, the fast-growing photo sharing app, Parker says.
Ugly Sweaters Help Grow
A flash-sales site for U.S. college students, Kembrel was launched in September of last year — just in time for the holiday shopping season. The retailer figured what better way to connect with college students than social media, particularly Facebook, with 75 percent or more of the demographic (18- to 25-year-olds) active users. Seeking to take its store where its target audience was, Kembrel worked with ShopIgniter, a social e-commerce software company, to become the first private-sale site to launch a fully integrated Facebook store.
Kembrel's first holiday promotion took place on Cyber Monday and was a relatively standard refer-a-friend program. Members who referred 10 of their peers (along with their email addresses) received a voucher that they could redeem on Kembrel's e-commerce site. The promotion was broadcast via Kembrel's Facebook page and Twitter account.
The retailer's next campaign was a little more unique. Kembrel promoted an "ugly Christmas sweater sale" on Facebook. The ugly sweater sale was a success in two areas, says Stephan Jacob, co-founder of Kembrel: one, the sweaters sold very well and, two, it grabbed attention for the startup.
Initial analysis of social media's impact on the growth of Kembrel is promising. The brand's commerce-enabled Facebook app was responsible for 20 percent of the company's 2010 holiday sales, and customers who purchased via Facebook had an average order value 7 percent higher than Kembrel's dot-com customers. Jacob doesn't see this trend slowing down as the company prepares for its second holiday season.
"I'd expect that share to go up," says Jacob in regards to 20 percent of Kembrel's sales being captured via its Facebook storefront. "There's really no reason for people not to use Facebook's interface because it offers the same level of flexibility, convenience and user experience that you'd expect of a well-designed dot-com site. The apps are becoming significantly better and more convenient, which will ultimately drive a lot of consumer adoption to transact on Facebook."
While no specific social media holiday campaigns have been planned as of yet, Kembrel will be relying heavily on the channel once again. Giveaways based on a customer action — e.g., commenting or sharing on Facebook or Twitter about Kembrel — figure to be part of the mix, Jacob says.
Despite all the buzz surrounding how social media is changing the retail industry, there are plenty of people who haven't bought into the hype. Yes, the channel has its place as a brand-building and customer engagement tool, they concede, but it won't have consumers abandoning shopping in brick-and-mortar stores and on e-commerce sites.
According to The Purchase Path of Online Buyers, a joint study from Forrester Research and GSI Commerce, less than 2 percent of all e-commerce sales in a five-and-half week period during last year's holiday season were tied to social URLs (the report analyzed data captured from online retailers between Nov. 12 and Dec. 20). More traditional online marketing channels such as email and search are consistently outperforming social media when it comes to driving online purchases, the report concluded.
"I don't think that social drives direct sales," says Sucharita Mulpuru, vice president, principal analyst at Forrester Research. "It does a lot to potentially drive more relevant experiences to consumers, but the sales benefits are usually 'small wins.'"
Mulpuru singled out Best Buy as a company that's effectively using social media. But again, it's not necessarily about driving sales for the electronics retailer. Best Buy uses Twitter as a support forum for its customers, with over 2,500 of its employees signed up for its Twelpforce. For Best Buy it's about listening to and better serving its customers via social media, not using the various platforms to push out products and promotions.
As for what consumers can expect to see from retailers in the social media space this coming holiday season, Mulpuru believes more Facebook "Like" integrations are on the horizon, along with the ubiquitous "Share" button plastered throughout the shopping experience in all channels.
What's not yet known is the impact social media will have on retailers' 2011 holiday sales. One way or the other, I think it's a safe bet it will be a hot topic of conversation in the retail industry come 2012.