BrainTrust LIVE: Does Your Social Media = Social Commerce?
The ShopperTech LEAD Marketing Conference in Chicago this week included an entire four-session track of panel discussions featuring RetailWire BrainTrust panelists and moderated by RetailWire CEO Al McClain.
While the LEAD conference covered practically every aspect of loyalty, engagement, analytics and digital marketing, the RetailWire BrainTrust LIVE panels tended to home in on the practical challenges of turning theory into increased sales. In particular, in the first two sessions, BrainTrust’ers Doug Stephens, James Tenser and Bob Phibbs discussed turning social media practices into social commerce. Additional guest panelists included: Millie Slamin, agency lead for social media, Defense Commissary Agency; Nick Harris, senior manager of consumer marketing, Benjamin Moore; Teresa Caro, vice president, strategy, rDialogue; Kat Kozitza, director of interactive & direct marketing, Supervalu; and Peter Leech, partner, The Partnering Group.
To say that opinions varied and that discussions were animated would be a severe understatement.
The ideas seemed to split into two fairly distinct camps. One held that engaging consumers in social media is a must for practically any business, and that using engagement to create “advocates” (consumers who ‘shout from the hilltops about your brand online’) is the key to building both online and in-store sales.
The other camp saw social media as a way to generate positive brand buzz and to generate “earned media” (media you don’t have to pay for). They also said it is a good place to learn what consumers are saying about your brand through research. But when it comes to turning buzz into “commerce”, according to this group, the potential pretty much begins and ends with offering online coupons and other forms of discounts.
In fact, a few panelists felt coupon aggregators such as Groupon or even Microsoft’s Bing are a big danger to profitability for many brands and, in particular, to local retailers. Some asserted that these offers attract deal-seekers only and that repeat business rates generated could be as low as three percent.
In the end, everyone felt social media and social marketing are now mainstream for most consumers, especially the all important “wallet-keepers” — women 30 – 50 years of age. The question is not “if?” but “how?” brands will incorporate these media into their marketing arsenal.
Discussion Questions
Discussion Questions: The use of social media in some form seems to be in most brand’s and retailer’s futures — but is social commerce a viable goal for most as well? If not, which categories or retailers in particular do you think should shy away from social commerce and why?
Social commerce shouldn’t be a goal, per se, but a means towards a broader goal — greater overall profitability. Let’s face it, even 10 years from now, purchases directly related to social commerce will be a tiny fraction of overall revenue for the vast majority of retailers. So retailers shouldn’t be investing too much to push social commerce ahead in a focused way, but they should start developing policies, infrastructure, and communications strategies to enable it to grow on its own as a natural part of their overall operations. In other words, social commerce won’t be a huge profit driver, per se, but it will be a good indicator of a retailer that has its act together as a whole.
Most of my clients are brands characterized as niche, specialty, or premium. All are destination items. I do not advocate using coupons or discounts via the social media except for when we are promoting a new product to generate initial trial. Otherwise, we use the social media extremely aggressively to create buzz, and to get message across in a most efficient way. But over exposure of coupons is not a winning proposition for my clients.
Well, I have to say, I firmly believe that the social media die hards are a temperamental bunch. The recent changes to Facebook have sent users into a tizzy. Post after post complaining about the new setup. So the next question I have is, when and how quickly does a social media vehicle die? MySpace comes to mind. So if retailers invest thousands upon thousands of marketing dollars into social media, can they expect solid returns or be washed away in what becomes less trendy? I think social media has a place in all industries and categories. It’s a way to convey information and every business needs that capacity.
While there should be no doubt that social media branding efforts generate positive results and will only gain traction, social commerce is a delicate matter. Consumers are resistant to participating in what sometimes feels akin to a new style of network marketing (Amway?) and are not usually comfortable assisting brands with marketing to their own friends and family.
There are some natural exceptions, including the media space and some services. People like to share and promote what they’re listening to, reading, watching, etc. And when we’re able to get recommendations from the social sphere on new things we might like, it can be a winner for the commerce merchant and the consumer. It’s really all about execution and making it feel like a valuable, informative endeavor.
Social media should be thought of as a feeder to owned media. That is where the engagement and commercial action is for a retailer and in fact, for most marketers. Example: although Starbucks has 25 MM fans on Facebook, only a tiny fraction of them visit the fan page in a given month, much less than the traffic that goes to Starbucks.com.
Social media is the new means of getting the word out about how you do business and who should be your customers. Social media will become your customers’ means of telling their friends how good/bad your business is. It becomes your success or failure marketing tool. If you are not doing some type of social media now, you are already behind the curve.
I think the Facebook changes represent an exciting step forward for social commerce. I probably see this extending from music and books, films, games and things like that, but it’s not hard to imagine other discretionary items following quickly, e.g. electronics, vacations, and cosmetics. Clothes could be interesting as not everybody wants to see others in the same outfit!
I do think in just a few years we have seen some interesting developments in this space and future innovation is likely to make this an even more important part of the mix in the future.
It’s very important to tie social commerce into a retailer’s complete marketing philosophy. It is important for retailers to begin to integrate these media into the other promotions and technologies being utilized. More innovation is coming and this social commerce experimentation period will help retailers to better utilize the complete array of solutions available today and to quickly leverage new opportunities.
The short answer here is it’s vital for brands to jump on the social media bandwagon, and utilizing social media is an aspect of social commerce. With social media, as many of the speakers at the conference said, the goals need to be generating buzz, establishing a direct, 2-way line of communication with consumers, and tailoring your offering as best you can to their expectations. These aspects of social media are in place because the ultimate goal of all marketing tactics (including social media) is to drive sales. And social media allows brands to listen to the people buying their products like never before…and if a brand isn’t participating, most likely their competition will benefit.
One of the biggest challenges with social media is to not come across as “salesy,” so the social commerce aspect needs to be handled by a resource that knows proper etiquette and how to engage the brand’s consumers via social media with the goal of social commerce…subtly.