June 24, 2010, 1:58 PM

Social media set to shine during holiday shopping season

Online retailers also will deal with more phone calls and last-minute orders.

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Social media likely will play a significantly larger role for online retailers this holiday season than in 2009, says John Squire, chief strategy officer for Coremetrics, a web analytics firm. Coremetrics technology can measure the traffic that e-commerce sites gain from various sites such as Facebook, Twitter, YouTube and blogs.

This year, social media will be among the five most effective ways to bring new visitors to retailer web sites, Squire says. Social media was no higher than number 10 in 2009, he says.

“The thing that is really interesting is that the second best channel for getting new visitors has turned out to be Facebook,” he says. The most popular way that new visitors find retailer web sites is to type the site’s URL into a web browser, he says.

Retailers are noticing the increasing popularity of social media, with companies investing more in Facebook and similar efforts, Squire says. Often retailers lure consumers via contests and coupons.

Retailers this holiday season also should prepare for consumers starting their shopping efforts early—in some cases, soon after chewing that last bite of pumpkin pie on Thanksgiving night.

Last year, web retail sales on the day after Thanksgiving increased 35% from 2008, Coremetrics says. Web measurement firm comScore Inc. says that Thanksgiving e-retail sales were up 10% and sales the following day, commonly known as Black Friday, grew 11% year over year.

The trends show no signs of abating, Squire says, especially as retailers continue to send promotions and “exclusive looks” at sales and products out on Thanksgiving night. “One of the lessons from 2009 is that the holiday season is going to start earlier than we expect,” he says.

Consumers this holiday season also can expect to see more retargeted marketing efforts from retailers, Squires says. In general, consumers who visit a retail web site but do not purchase an item receive a targeted ad or e-mail that encourages them to buy products the shoppers might have viewed, or which reflect purchase or viewing histories.

Meanwhile, retailers are beefing up their customer service in advance of the holiday shopping season, absorbing lessons learned last year. CSN Stores LLC, which operates more than 200 niche retail sites, received more consumer phone calls during the 2009 holiday season than expected, says Eric Klose, senior vice president of sales and marketing for CSN, No. 61 in the Internet Retailer Top 500 Guide.

“At extremely busy times we had to recruit other CSN staffers quickly to satisfy our high service standard,” he says. “Learning from that experience, we are investing well ahead of time this year in a greater number of well-trained customer service representatives.”

Klose says the retailer is optimistic this holiday season will be better than the last one. He says sales this year are up by at least 60% over 2009. “That’s a major increase for any year, and we believe it could be even higher in November and December of this year,” he says.

With higher sales will come more last-minute orders, he adds. “One other expectation we have for the end of this year is that consumers will make their holiday purchases later than ever,” Klose says. “We’ve seen this year after year and we believe it’s largely attributed to increased consumer confidence in fulfillment by online retailers.”

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