The e-retailer reports a $126 million net loss, stemming from a $640 million year-over-year increase in spending in the quarter on technology and content ...
And several are offering customer service via social networks.
The growth of social media in recent years has led many online retailers in the United Kingdom to devote significant amounts of time and energy to developing their profiles on popular social networking sites such as Twitter, Facebook, Pinterest, Google+ and LinkedIn.
In fact, 64% of U.K. retailers in an Econsultancy survey conducted in March say they are using social media to market their brands.
But retailers are still experimenting with ways to get the maximum benefit from social media.
"As far as return on investment goes, it is very hard to judge how much value there is in social media," says Joanna Robb, head of multichannel development and strategy at B&Q, a large home improvement and garden center retailer in the United Kingdom and Europe. "We have nearly 40,000 'Likes' on Facebook, but it is difficult to quantify what that means for sales."
B&Q's Facebook and Twitter accounts were first launched as a marketing channel, Robb says, but have since morphed into a forum for customer service.
B&Q now has a dedicated Twitter account to deal with customer complaints and questions that it monitors daily, Robb says. The retailer has around 11,000 Twitter followers, she adds.
Richard Beattie, vice president of Europe, the Middle East and Africa at Vitrue, which provides a social marketing platform that helps brands and agencies manage and expand their social media communities, says using social networks for customer service is a growing trend amid e-retailers in Europe.
"At first people thought of social media as purely another marketing channel, but there has been a shift from talking at people to talking with people," he says. This new approach, he says, enables retailers to have a conversation with consumers, which helps personalize brands.
David Hathiramani, co-founder of online tailor and suit retailer AsuitThatFits.com, says the e-retailer uses social media to offer style advice. "All of our style advisers tweet and blog, so people know who they are talking to and we can offer a very personalized service," he says.
He adds that it is important to keep a consistent tone and voice across all social media channels. "If you have an online personality that completes the brand, then people will be more comfortable and will engage,” he says.
For a large organization this can be difficult to control.
For example, Robb says that B&Q had to shut down a number of Facebook accounts that had been set up by individual store branches but were inconsistent with B&Q’s branding. Now the retailer has a set of rules for each social media channel, with special training courses for Twitter and Facebook.
"At first we tried to be a little cheeky and irreverent, using informal language, but we found we weren't hitting the right tone with the users,” Robb says. “We are still more casual on Twitter and Facebook, but now there are standard responses for most situations that our staff can use."