January 6, 2014, 2:45 PM

E-retailers perfect their ROI for social media

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Like many retailers, Amazon doesn't just seek to drive traffic to its site via social networks; it also incorporates social elements into its own site. It recently announced plans to provide shoppers more product information that stems from shoppers' Facebook connections. For example, Amazon says customers with Facebook-connected accounts will see product reviews written by their Facebook connections and products that their connections have put on their Amazon Wish Lists. Wish Lists can be marked private, but Amazon's default setting for Wish Lists is for them to be public and viewable by anyone.

Amazon's on-site and off-site social media efforts tie in with its broader efforts to personalize shopping for consumers using crowd-sourced data, says Wade Gerten, CEO and co-founder of social marketing vendor 8thBridge Inc.

"Unlike the majority of retailers that believe brand-to-fan engagement is the primary goal of social media, Amazon has always concentrated on methods to gather crowd-sourced product information and sophisticated algorithms to personalize the shopping experience," he says. "Amazon believes social discovery is the most important aspect of social commerce."

That's a notion shared by Deb Shops, which works with 8thBridge to offer shoppers social elements on its site. It features a Want It To Win It button that, when clicked, gives a shopper a chance to win that item in a weekly giveaway. Clicking the button also prompts the shopper to give the retailer access to her profile on the social network, and to share the item she wants on Facebook. Deb Shops also offers Pinterest-like Style Boards that let shoppers collect various items on boards around a particular theme such as "Fall formal."

Using A/B testing, the retailer found that the mere presence of those social elements boosted its site revenue per visit 16%. And shoppers who interact with social elements visit 36% more often and convert at a 220% higher rate than other shoppers, says David Cost, vice president of e-commerce and digital marketing at the junior and plus-sized fashion retailer.

Moreover, the demographic information Deb Shops gathers from consumers giving it access to their Facebook information to use the tools enables the retailer to gain insights into its customers. For example, the retailer had assumed that its plus-size and shoes and accessories-buying customers were typically older than its junior customers because those styles skew older. The Facebook data confirmed that hunch—about two-thirds of shoppers interacting with plus-size apparel or shoes and accessories were 20 or older, while a much smaller percentage of junior customers were 20 or older. Cost declined to share the specific percentage.

Facebook's demographic information is unparalleled in its depth, he says, which makes it extremely valuable. "You spend years building up your Facebook profile, which means Facebook has many more details than anything else," he says. "It's like the most detailed marketing survey you could get. You can see patterns in user behavior that you wouldn't be able to see in any other way."

But to unlock that data, retailers constantly have to engage shoppers. Deb Shops reaches out broadly across online social media. Jennifer Fitzpatrick, the retailer's social media and brand manager, posts a mix of promotional and conversational content to eight social networks: Facebook, Twitter, Instagram, Pinterest, Tumblr, Google Plus, YouTube and shopping-focused Wanelo. About half the daily content it posts is planned, while the other half might highlight a new product that hit store shelves that day or mention a trending topic on Twitter.

The retailer has a simple goal: "We use social media to maximize the amount of time that shoppers spend with our brand," Cost says. To gauge its success, it uses engagement measures such as retweets, repins, comments per post, as well as clicks from social media. The formula has helped the retailer attract robust followings across each of the social networks. With an 8.2% engagement rate—which measures what percentage of its fans interact with its posts on Facebook —Deb Shops outranks all but 35 retailers in the 2014 Social Media 500. And shoppers clicking from Facebook and the seven other social networks it is active on, account for 5% of its site traffic, ranking Deb Shops No. 156 in the guide.

But it often isn't enough to rely on "owned" traffic that shoppers see when they follow a retailer, Cost says. In part, that's because the social network says a Facebook user typically sees only about 16% of the content his connections post on the social network. That's because Facebook only presents consumers posts it deems interesting to them.

To increase that share, retailers have to "earn" views by drawing shoppers in by posting content interesting enough that shoppers pass it along or mention the brand in their own posts, Cost says. Deb Shops also pays to promote posts on Facebook and Twitter to ensure its messages are seen by a certain percentage of fans—or other consumers—along with social networks' other ad formats that focus on boosting engagement via Likes, comments or retweets.

Deb Shops uses both Facebook's Custom Audience tool that lets advertisers use information shoppers share with them off of Facebook to target ads on the social network, and its Lookalike Audience tool that lets marketers target ads at consumers who share similar traits to its Custom Audience segments. It also employs other targeting options, such as age, interests and location, to present consumers ads featuring products and styles that match their tastes. It uses ads like Sponsored Stories, which let a brand pay to promote a message about a consumer's friend engaging with its page, app or event, and Promoted Posts, which let it pay to ensure a post receives a predetermined number of impressions from its fans and from consumers likely to be interested in its brand.

The retailer's approach to social network advertising mirrors efforts taken by several social networks including Facebook, Twitter and Tumblr over the past year to introduce new ad units and targeting tools that let marketers seek to drive specific results to a specific group of shoppers at a specific time and to demonstrate how shoppers respond.

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