Until recently, social media has shown little to no ROI for retailers. But as the new UPS Pulse of the Online Shopper study reveals, those days might be long gone.
Legendary retailer John Wanamaker once said, "Half the money I spend on advertising is wasted; the trouble is I don't know which half." Once upon a time, the same lament could easily apply to dollars invested in digital marketing – especially social media.
"There's more to social media than just making a sale." – Lauren Freedman
But that's changed significantly, and digital marketing – that is, paid advertising and unpaid digital tactics – has ramped up significantly. According to a Duke University study from February 2016, U.S. retail marketers expect digital outlays in the next 12 months to increase 20.3 percent, while traditional ad budgets are forecast to fall 12.1 percent.
There's good reason to rethink the value of social media as a key part of your online marketing efforts. In the 2016 UPS Pulse of the Online Shopper™ study where 5,500-plus shoppers were surveyed, more than three out of four people say they are social media users. The numbers jump higher for millennials (83 percent) and GenXers (79 percent).
Overall, 34 percent say that social media influences their online purchases, and nearly one-in-four online shoppers (23 percent) purchased products directly through a social media network. Among millennials, nearly one in three (32 percent) purchased products via social media.
Seven out of 10 customers use Facebook now
Retailers who want to capitalize fully on social media need to understand who and where their customers are, says Lauren Freedman, president of the Chicago-based e-tailing group, inc. For example, while overall almost seven out of 10 online shoppers use Facebook, she says, "if you are selling to 18-year-olds, you might want to take advantage of Instagram or Snapchat. For a very visual category, Pinterest might be the right place to be."
She recommends using "buy" buttons wherever you can in social media, so customers can make purchases without having to navigate to your site. "It's also good to add ‘share' capability to your product pages, so that customers can share with someone else quickly and easily."
In the study, 39 percent of online shoppers say they "follow" retailers on social media, and Freedman recommends making sure you provide links to social media so that people can find you, friend you or follow you. "It's another way you can reach fans, and someone who comes to you through social media is probably a bigger fan than someone who just lands on your site," she says.
Consumers have become digital evangelists
"Another thing retailers can do is work very hard to be ‘evangelists' in their industry and to their customers," adds Sajeel Qureshi, vice president for Computan digital marketing consultants. "If you're selling steel water bottles, that may mean spreading the word about the negative effects plastic bottles may have on the environment." For example, he says, curate content that shows the benefits of using steel water bottles, or how being hydrated can help customers at work or in the gym.
"The possibilities are endless."
Qureshi however advises retailers to choose their social media platforms carefully. "Pick the right ones for you, learn from other businesses that do this well, and don't discount using your kids or the young people in your life as resources," he says. "They are far more in tune with the latest social media platforms and tactics then any ‘marketing expert' will be."
The final word? Have a clear strategy
Success in social media depends on the strategy you use and the goals you set. "There's more to social media than just making a sale," says Freedman. For some, the objective is engagement and influence, turning strangers into visitors and potentially customers. "In that case success might be measured by time spent on the site, or the number of times a product was shared," she says.
"Measuring sales and visits from social media is very easy to do using analytics software," says Qureshi. "Google Analytics is free and can easily track how many visitors come to a site through various social media channels. Popular platforms like Snapchat, Facebook and Twitter all have built-in analytics that measure customer activity as well."
"The story of social media is not fully written," Freedman says. "A number of companies we've worked with say that one-third of their customer service is now being handled through social media." The study supports that trend: 28 percent of online shoppers say they are likely to make a comment on social media when dissatisfied, up 3 percent from 2015.
"There are a lot of ways retailers can use social media and they need to be able to tackle anything that comes up by adapting to the way customers want to be communicated with."
For more details on additional ways digital shoppers have evolved, and insight on the new logistics challenges retailers face as a result, download the full study in an easy-to-read e-book format.