Friday, September 25, 2009


More retail merchants are on Facebook and Twitter than they are employing customer reviews and viral videos, according to a survey by The E-tailing Group. The E-tailing Group released the results of its first annual community and social media survey today. Commissioned by customer reviews platform provider PowerReviews, the study is based on a methodology and merchant list proprietary to The E-tailing Group. According to the report, merchants and brands are taking a "more aggressive" approach toward implementing social media strategies, driven largely by the intent to foster greater customer engagement. Surprisingly, however, newer channels like Facebook fan pages and Twitter publishing are being adopted more readily than older, more well-proven tools like customer reviews and viral videos, with community forums and product suggestion boxes coming in at the bottom.

The study surveyed 117 merchants and brands, with company sizes ranging from $20 million in annual revenue or less (29 percent of respondents), to over $1 billion (21 percent). Company types include:

The top social media and community tools adopt today are:

Facebook fan pages (86 percent);

Twitter publishing (65 percent);

customer reviews (55 percent);

blogs (55 percent); and

viral videos (50 percent).

However, when asked which tools lead in terms of generating the greatest increase in sales, respondents ranked customer reviews as the most effective with 78 percent of 100 responses ranking it as number one.
Customer reviews, which by now is considered commonplace for most merchants, is no more than a few years old. However, with some of these things like community forums, they may have been around for a long time but retail hasn't necessarily adopted them." A few years may seem like an eternity given the speedy rise of tools like Twitter, which exploded from just 1.5 million users in 2008 to become the fastest growing Web property in history. The Wall Street Journal reported today that marketing research firm eMarketer raised its 12.1 million estimate to 18 million people who are expected to use Twitter at least once a month.

Despite wide adoption, merchants and brands are still plagued with concerns about social media, the top three of which are:

people can trash my products in front of a large audience;

I am using outdated marketing/merchandising techniques; and

customers might leave my site to find a socially-engaging site.

"People are realizing that if they don't get into [social media], consumers will leave,". Fear will likely dissipate in time. "The more you know, the more your comfort zone comes into play." Retailers have accepted the fact that consumer wants to engage through social media. Now they have to figure out how to make it "part and parcel of the shopping experience," Freedman says. Therefore, companies are struggling to put the right resources and finding the people to manage this side of the business. Nevertheless, merchants and brands taking a more of an aggressive approach toward social media (75 percent of respondents say that brands and manufacturers have become more aggressive in their commitment to social media in the last six months, over the previous six months). We're seeing evidence of social media's value from something as simple as an increasing number of companies including PowerPoint decks in their presentations detailing the number of followers they have on Twitter or fans on Facebook. Despite the fact that retail has historically been such a return on investment driven industry, the top reasons retailers are committed to social media are for:

greater customer engagement;

increasing brand loyalty; and

mobilizing advocates to drive word-of-mouth.

Beyond just the sale, the value of engagement will become so critical and apparent to the company such that, despite current obstacles surrounding immeasurability, "it will no longer be necessary to quantify [it]."

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