Retailers shift their ad spending from TV, radio and print ads to digital ads.
Victoria's Secret trounces Amazon in social media effectiveness.
Images and videos of women in their underwear make great material for sharing on social networks. That's part of the reason Victoria's Secret, No. 19 in the Top 500 Guide, ranked No. 1 in effective use of social media among the Top 500 retailers, says Paul Dyer, head of corporate development at W2O Group, a social media consulting firm that conducted the study.
Despite the racy nature of its business, Victoria's Secret is tasteful in the content it posts, and its behind-the-scenes videos and Facebook-only deals give consumers the sense of being part of the in crowd. "Their secret sauce is in the exclusivity of their social media audience and visual content," he says. "They were one of the first retailers to sell directly through Facebook and their engagement with their content is high because it's very visual and well composed."
To arrive at its social rankings, W2O applied 62 metrics to five social networks—Facebook, Twitter, YouTube, Flickr and SlideShare—and to official merchant blogs. These metrics include number of Facebook fans, average number of comments per blog post, number of YouTube video views and others. The firm then calculated how many people each retailer reaches (Social Reach), to what extent those people are engaged (Social Engagement) and how widely discussed each merchant is on social networks (Social Footprint).
W2O gave each retailer a score for Reach, Engagement and Footprint for each of the six types of social media, and then weighted scores according to each channel's importance (Facebook is weighted higher than SlideShare, for example) to arrive at a Final Social Index. The top-ranked retailer in each category received a score of 100, and other scores were scaled downward from there.
Victoria's Secret beat out online retailing leader Amazon.com Inc. for the No. 1 spot, which is remarkable given the size of the Amazon customer base, Dyer adds. Amazon.com has around 84.3 million monthly unique visitors, according to web site traffic measurement firm Compete Inc.
Victoria's Secret had about 17 million Facebook fans in January 2012 when W2O conducted the research for this study, while Amazon had around 2.4 million. On YouTube, Amazon had posted five videos in the prior 12 months, while Victoria's Secret had 109. Moreover, Victoria's Secret racked up nearly 32 million total video views on YouTube, compared with Amazon's mere 280,000. Victoria's Secret declined to comment for this article.
"If you look at the number of Facebook fans in relation to the number of customers they have, it really is deplorable," Dyer says of Amazon. "Amazon's success is built on organic search, but outside of that they have made very little effort and have not been able to become relevant in the social conversation." Amazon did not respond to a request for comment.
Amazon scored as high as it did, No. 2 on the list, partly because of the large number of consumers who mention Amazon on social networks outside of the retailer's own Facebook page or Twitter feed. Also, many of Amazon's Twitter followers share deals the e-retailer tweets on a regular basis. "Number of retweets is one of Amazon's strengths," Dyer says. "A lot of people link to Amazon's Twitter feed because of that deal sharing."
Still, Amazon could be doing much better with social media than it is, given its relative strength in driving sales. "They post deals but don't create any exclusivity," Dyer adds. "Amazon is basically surviving on its laurels. They have a ton of people coming to their web site and they never had to figure out social media like Victoria's Secret did. They have the opportunity to be the leading expert on product and how-to's, but they don't do it. Instead when you go to Amazon's YouTube channel, they are posting commercials."
Dell is swell
Dell Inc. came in third in the W2O rankings. And that's no accident, because the computer maker has made social media a major priority, says Richard Binhammer, director of social media and community at Dell. As a testament to the level of commitment Dell places on social media, in late 2010 the retailer set aside a part of its headquarters in Round Rock, Texas, to house a team dedicated to monitoring and responding to the average 25,000 comments per day on social networks that pertain to Dell.
Dell's Social Media Listening Command Center resembles a small NASA control room with low lighting, glass walls and a large bank of computer screens.
It is here that Binhammer and his handful of staff track conversations in nine languages ranging from a consumer posting a status on Facebook saying she is out shopping for a new Dell laptop to a tweet about a technical problem with a Dell server from a data center manager.
"The Social Media Listening Center is monitoring 25,000 conversations, parsing them out and keeping an eye open for something that may turn into a big thing," Binhammer says. "We are trying to make sure we have a pulse on everything. It's kind of like Mission Control."
This close attention to what's being said about Dell allows the company to respond quickly to comments or complaints, which resonates with customers. "For example, we listen to a customer who says, ÔI ordered an extended battery from Dell and what I saw in the box was nothing like what was on the web site.' We changed the picture because of that input," Binhammer says. "We take comments like these seriously. Customers appreciate this and become advocates and ongoing loyal customers."
Binhammer's team also helps to coordinate a consistent message on social networks because, globally, Dell has 4,000 employees out of more than 108,000 that are trained as official social media agents of the company. These employees work in many business units, including U.S. home computer sales, foreign operations and its business-to-business segments. They address customer comments on social networks on a regular basis.