Groupon says its focus is on the bottom line, rather than top-line growth.
Sharing becomes a big part of shopping on the Internet
Facebook, Twitter and YouTube meant little to most marketers a few years ago. But today they're part of the everyday concerns in e-retailers' marketing departments.
That's because online shopping is no longer a solitary experience. Consumers can ask and answer questions on many e-commerce sites, comment about products on Twitter, and tell their Facebook friends about products they like.
Survey data from The E-tailing Group, a research firm, shows that 57% of consumers cite retailers' question-and-answer features as an element that helps them select a product, 45% point to community forums and 31% cite retailers' Facebook pages. The firm also reports that 78% of merchants surveyed have a Facebook page, with another 13% planning to launch one in the next year. 64% communicate via Twitter, 45% have blogs, and 30% produce their own videos or display videos submitted by consumers.
The friend influence
Social features are more prevalent because there is evidence they can have a direct effect on sales. For instance, 68% of consumers with Facebook accounts say a positive referral from a Facebook friend makes them more likely to buy from or visit a retailer, according to a recent study from research and consulting firm Morpace Inc. The study also found that 36% of consumers with Facebook accounts view the social network as a good tool for researching products.
The consumer voice is increasingly important because, with so much content available at consumers' fingertips, consumers need cues to decide which voices to listen to, says Lauren Freedman, president of The E-tailing Group. And they trust fellow consumers, particularly their friends: The survey found 55% say friends have the biggest influence on their purchase decisions. That outpaces the 51% who cite experts.
No surprise then that retailers such as Levi Strauss & Co. are seeking to leverage the power of Facebook to boost sales. Levi.com allows shoppers to click a Like button for any category or SKU on the site, a feature added in April, taking advantage of an initiative by Facebook to make it easy for all kinds of web sites to forward actions by Facebook users back to the social network. In the case of Levi.com, each action a shopper makes is shared both on the retailer's site and on Facebook.
The retailer also launched the Friends Store, a section of Levi.com that allows shoppers who sign into their Facebook accounts on the site to view just the merchandise their Facebook friends and other Facebook users noted they like. Doing so gives shoppers a selection edited with an authoritative voice—the voice of the consumer.
Going where shoppers are
Levi.com aims to tie together consumers' Facebook universe with its retail site. That link allows retailers to reach shoppers where they're already spending time, namely on Facebook, said Ken Cassar, vice president, industry insights, Nielsen Online, at the Internet Retailer Conference & Exhibition in June.
Web measurement firm Hitwise in May noted that Facebook accounts for 8.59% of all U.S. users' visits to web sites. Moreover, Facebook visits rose 8% in May compared to April. The average person engaged in social media spends six hours a month on such sites, according to Nielsen Online.
Thus, retailers must take part in social media, as that's where their shoppers are, said Cassar. "Being engaged socially is really blocking and tackling," he said. "It's a minimal customer expectation."