Retailers shift their ad spending from TV, radio and print ads to digital ads.
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For instance, the group's "American Idol"-like competition Get on the Shelf launched on its own site, GetOnTheShelf.com, earlier this year. However, the contest relied on Wal-Mart's broad reach and recognition to attract attention. Consumers and small businesses submitted YouTube videos of their inventions or designs, with Wal-Mart promising to sell the winner's products on Walmart.com and on the shelves of the retailer's bricks-and-mortar stores. The chance to sell products to Wal-Mart's millions of customers produced more than 4,000 contest entries.
There's more to come from @WalMartLabs, Raj promises. On the drawing board, for example, is an app that would let consumers use their mobile phones to interact with other shoppers in Wal-Mart stores, creating in effect a temporary social network.
But Wal-Mart doesn't ignore more conventional interactions with its 14 million Facebook fans. The Wal-Mart Facebook page features daily recipes, a tool that helps consumers plan their meals for the week, and an application that connects consumers with events and promotions at their nearest Wal-Mart store. "They know who they're talking to," says David Spitz, president and chief operating officer at online marketing company ChannelAdvisor Corp. which tracks retail trends on Facebook. "It's truly a two-way conversation."
Express's Gavales takes a very different approach to keeping the attention of the 40,000 consumers who follow her personal Twitter account, @ExpressLisaG. She regularly tweets an inside look at what it is like to be a chief marketing officer at a lifestyle brand, complete with photos from fashion shoots. "People follow me to hear about my personal perspective on the company," she says. That explains why her personal account has attracted more followers than the brand's corporate and customer service Twitter handles, she says.
Wal-Mart and Express took the same approach in creating a unit dedicated to research social marketing. But web-only retailer 1-800-Flowers has decided that social marketing is so essential that it's every employee's responsibility. "Every element in every campaign we run has to be viewed through a social lens," says the retailer's president, Chris McCann. "Everything we do should compel someone to share. If it doesn't, we're not doing our job."
Everything the retailer does—from its web site to its marketing e-mails—is aimed at fostering sharing, which is a modern twist on word-of-mouth advertising, McCann says."Getting consumers talking about your brand is really about letting them do your marketing for you," he says.
The focus on Facebook is evident at 1800Flowers.com where a shopper can sign in using his Facebook credentials, tell his friends that he Likes a particular product and see which of his Facebook friends have Liked a particular product, which of his friends have upcoming birthdays and which products might appeal to a particular friend (which the site infers via the friend's public actions on the social network).
Seeking another way to drive shoppers, the e-retailer signed on to be a launch partner in March for an American Express Co. program in which consumers who tweet a message containing a specific hashtag can access exclusive deals. Any word that starts with a pound sign (#) is a hashtag, which becomes a clickable link to all other mentions of that word. For example, a tweet that says, "See all the fun gift ideas on our Mother's Day Gift Guide #giftideas" makes "giftideas" a clickable link that brings up other tweets about that term.
An American Express cardholder who syncs his card to his Twitter account gets a discount after he tweets a message found on the Favorites tab on the American Express Twitter page and then uses his card at the participating merchant. "In the old days you took a coupon and went to the store and redeemed the coupon," McCann says. "You weren't really able to help your friend know about the deal. This takes something that is old school—coupons are as old as retail—and makes it fun and engaging by making it social."
The first coupon 1-800-Flowers offer, $10 off a $50 purchase, prompted more than 120 consumers to retweet the message as of early April. That exposure multiplies quickly because all of a Twitter user's followers see anything she retweets. With the typical Twitter user having 346 followers according to analytics provider TwitterCounter.com, 120 retweets could reach up to 41,520 other shoppers.
1-800-Flowers also draws on consumers' Facebook posts to gain attention, using the social network's Sponsored Stories ad format. The format enables advertisers to highlight posts or actions, such as when a consumer's Facebook friend Likes a product, checks into a store or uses a Facebook application. The advertising format is particularly effective because the ads display the actual content a consumer posts, rather than a retailer's offer or promotion, McCann says. "They work because they tell a story," he says.
They also broaden the brand's exposure. Sponsored Stories are the only ad format consumers see when viewing Facebook on a mobile device, which is the way that 425 million consumers accessed Facebook in December. A consumer, on average, only sees about 16% of the content her connections post on the social network because Facebook selects what it believes are the most relevant posts to display in the "Top Stories" section of the individual's news feed. Facebook makes those judgments based on the consumer's posts, Likes and other actions on the social network, said Mike Hoefflinger, the social network's director of brand product marketing, at the Facebook Marketing Conference in February.
But advertising on the social network can boost that percentage, as well as entice shoppers to interact with the retailer's page. That explains why a 1-800-Flowers' Sponsored Stories campaign leading up to last Mother's Day helped boost engagement, measured in terms of all social interactions, such as Likes, shares and comments, with the retailer's posts by 393%, compared with engagement when it wasn't running a campaign. Moreover, the retailer says the campaign boosted sales, although it declined to say by how much.