More than half promote merchandise, but few can demonstrate monetization
Retailers are using social media sites in a variety of ways, but many are still working to determine how this outreach affects their bottom line.
A June 2011 Economist Intelligence Unit (EIU) report titled “The Social Shopper” found that, of 179 senior executives in the retail industry worldwide, 56% used social media to promote new or existing merchandise and 36% used it for customer service as of April 2011. Other popular activities included offering coupons and engaging in dialogue to understand customer sentiment.
These varying activities support the different objectives retailers reported for their social media outreach. Some cited increasing brand awareness as their primary objective (29%), while others wanted to increase customer engagement (27%) or expand their customer base (24%).
Yet despite the fact that retailers are pushing their merchandise and hoping to expand their customer base via social media, they have not found a way to link social media outreach back to sales. Of the respondents, 39% said they were doing a poor job of measuring social media effectively, while 45% say they were just average at it, with basic metrics in place, such as number of fans or followers.
Looking at it from the slightly different angle of monetization, only 6% of respondents reported that they were able to monetize their investment in social media. However, 32% believed monetization had occurred though they could not prove it, and 38% said they had no evidence that monetization had occurred.
Many companies need to prove the effectiveness and business results of their social media to the C-suite, so this is an important thing for retailers to uncover, and soon. More consumers want to make purchases via Facebook, but many retailers do not offer that option. This is one way to demonstrate the business connection to social media outreach and by making that option available, retailers can benefit and start to showcase monetization for their social media efforts.
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