June 21, 2010, 10:42 AM

Here comes social media—ready or not

Kurt Peters

Executive Editor

One of the most frequently mentioned topics the 2010 Internet Retailer Conference & Exhibition in Chicago was social media. Those words were on the tongues of almost every speaker, from the pre-conference workshops on Tuesday (Ravelry.com, a social site for knitters, drives 6% of traffic to Yarn.com, Steve Elkins, president of Yarn.com’s parent WEBS, told Tuesday’s Beginning Search Marketing Workshop) to Friday, when the conference concluded with a whole day devoted to understanding social initiatives (“Mingle around online social media to find out where your market is,” Michael Jansma, president of online retailer GEMaffair.com, advised attendees).

Anyone attending any of the many sessions that dealt with social media went home with lots of ideas—and with the idea that there is no silver bullet. Each retailer has to harness social media to its own particular circumstances.

A couple of great examples came out of the Facebook session during the post-conference Social Media and E-Retailing workshop. David Pohl, head of e-commerce for Equator Estate Coffees & Teas, focused on small-bore initiatives. He reported that when the company gets small lots of coffee in stock, it sells them on Facebook. Why?  It’s too much trouble to put small quantities on the web site. And those offerings have the advantage of tying fans closer to the brand. “Treat your fans special,” Pohl advised.

Pohl’s co-presenter David Saville of Hallmark Cards reported that Hallmark is planning to spread its presence across Facebook. Rather than offering only a few things on Facebook, Hallmark is getting ready to build Facebook stores for the many different brands, such as Disney, that Hallmark licenses for cards. That could result in Hallmark’s operating dozens of Facebook presences.

Whatever the approach, social media is early enough in its life and fluid enough to allow online retailers latitude in experimentation. The real challenge is to find the return on such investments. Notwithstanding ForeSee Results’ new service (announced at IRCE) to track how consumers use social media and whether it prompts them to buy, many speakers urged e-retailers not to be concerned about return, arguing that social media is still a relatively small investment. “Don’t try to calculate ROI on social media programs, just do them,” Ken Cassar, vice president of industry insights at Nielsen Online, told Friday’s Social Media workshop.

Said GEMaffair’s Janmsa: “It’s a challenge for us right now to monetize Facebook.”

Profitable or not, the consensus among speakers is that successful retailers will be where consumers are—and that’s on social sites these days. In fact, Jansma cited research showing that social sites are now the No. 1 use of the Internet—displacing porn for the first time since the rise of the Internet. Having a social presence, said Nielsen’s Cassar, “is a minimum customer expectation.”

Comments | 4 Responses

  • Should retailers be “where consumers are” in regards to social? Let's think about offline analogies. People congregate in social settings such as bars. Should retailers advertise there? In some cases, yes (beer companies do). But in most cases no. Or let’s take an online analogy from the early days of the web. At first advertisers flocked to the eyeballs – and it didn’t matter where or why they were there. But we learned that context – relevance – is actually more important than sheer numbers alone. Retailers have a lot of angst around figuring out how to make money off social. There are so many people on Facebook, there are so many tweets, there are so many homesteaders in SecondLife (oh, wait, all the retailers already slunk away from that one) – there simply has to be a way to get people to buy from us there. But the real value in social is the ability to listen in on what people are saying about us and our products in a way that’s scalable and legal. So Ken’s quote is right: forget the direct ROI, focus on acting on the insights gleaned from listening. Sure, some companies will see an ROI from direct sales through social channels, but it is likely to be the equivalent of beer companies putting signs and posters in bars: right time/right place outweighs simply being where consumers are.

  • Some great points there Kurt, and I agree that for retailers, simply there are no excuses not to be engaging with their customers through social media. Social media should be an indefensible part on any large retailer in their brand authority building and monitoring. My two cents. Regards, Arturas http://sysiq.com

  • Great post. I completely agree that Facebook and other social networks need to be used in a very targeted way to be effective for eCommerce. There is a great whitepaper addressing this topic entitled Started with Social Media and eCommerce, written by AJ Angus, Kenny Rosenberg and Elbert Bautista of business and consulting site Credera. Many retailers have yet to develop a strong presence on social networking websites and integrate their features within their eCommerce websites. This paper analyzes the ability of social networks like Twitter and Facebook to drive traffic to eCommerce websites and increase a company’s brand on the Internet. This paper will address common questions around the demographics of social networking users, how to utilize social networks to meet business goals, metrics for the success of social networking activities, and how to address feedback from users. Finally, this paper will discuss the risks of using social networks and the implications for businesses.

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