The e-retailer spends at least 50% of its monthly display ad budget on the highly targeted, data-driven—and often cheap—ad placements using programmatic platforms.
Budding social networks give retailers opportunities to reach distinct types of consumers.
HSN Inc. has always had a social bent. As long as there's been HSN, consumers have called in to its TV shows to ask questions about a product or simply to chat. As the web took root, the retailer let shoppers chat live on the web with HSN, and with other shoppers. And, as soon as consumers flocked to Facebook and Twitter, HSN began using those social networks to highlight its merchandise and to mingle with shoppers.
Even so, it wasn't until a few months ago, when the number of consumers clicking from Pinterest to HSN.com passed referral traffic from Twitter, that the retailer fully realized the extent to which the social landscape had changed. "All of a sudden, looking at our stats, looking at the broader industry stats, it became clear that consumer behavior is changing," says Jill Braff, HSN Inc.'s executive vice president of digital commerce. She's referring to statistics like this one: 32% of online shoppers have made a purchase based on what they've seen on Pinterest and other image-sharing sites, according to a recent survey from Bizrate Insights, a unit of comparison shopping engine Shopzilla Inc.
Those data points are driving home the message that social media marketing isn't just about Facebook and Twitter anymore. Shoppers are increasingly interacting on an array of social networks, notably Pinterest, Instagram (which Facebook is in the process of acquiring, yet pledges to keep independent), Tumblr and StumbleUpon. For instance, in the six months between October 2011 and April 2012, visits to the Instagram web site grew from 68,800 to 3.8 million, according to web measurement firm Experian Hitwise. Even though the majority of Instagram activity takes place within Instagram's mobile app, and the web site only provides links to download its app and account management tools, the growth demonstrates the sharp rise in consumer interest.
These emerging social networks—some of which, like Pinterest, aren't even that small anymore—present opportunities for retailers to interact with consumers in unique ways, to promote their brands and, in some cases, drive sales.
Brand-building is the key motivation for men's fashion e-retailer Bonobos Inc., says David Fudge, director of consumer engagement and innovation. "When we're on social networks like Instagram or Pinterest it enables us to relate to our customers in different ways," Fudge says. "The more they relate to us, the more they identify with us, and the more they want to be associated with us, the more likely they are to want to buy our products."
The emerging social networks are a bit like children—no two are exactly alike and they each have their own distinct personality. For instance, Pinterest, which allows shoppers to 'pin' images from around the web on Pinterest boards, is largely fashion-focused, says Melissa Parrish, senior analyst, interactive marketing, for Forrester Research Inc. Its user base skews female and well off, with 68.2% female and 28.1% with annual household income of more than $100,000, according to marketing agency Modea Corp. Similarly, Instagram, which offers a platform for sharing photos, attracts younger consumers—more than 51% of its users are age 34 or younger, Experian Hitwise says.
Retailers and brands should go where their customers are, Parrish says. "Any social network can be successful for a brand as long as it provides a match for what its shoppers are doing."
Given its focus on fashion, Bonobos figured many of its customers visit Pinterest, and that the retailer could highlight both its style and irreverent personality by becoming active there itself. Nor did it want to ignore Instagram, given the 30 million consumers who share photos via the social network. With its own presence on Instagram, the retailer could bolster consumers' notion of Bonobos as a lifestyle brand by showcasing its inspirations and sharing photos of the people behind the company.
Similarly, SkinnyCorp LLC's Threadless.com has a young, hipster clientele and, as such, it uses microblogging platform Tumblr, which is dominated by 20-somethings, to highlight funny and clever designs. Threadless turns to personalized search engine StumbleUpon to spread news of sales and highlight specific products.
Make an event of it
But for any of this to pay off, a retailer has to attract attention on any social network it targets.
Before using a Pinterest board to host an "Easter Egg Hunt" promotion, Bonobos had fewer than 100 brand followers on Pinterest (users can follow a brand or a just a brand's boards). Even so, the contest generated buzz. The retailer offered discount codes if a set number of consumers, say 250, repinned colored Easter eggs featured on a Bonobos board. That means clicking the Pin button, which adds the image to a user's board. Users organize various images they've pinned on a board, which are usually organized around a theme, like "Shirts I like." Once a shopper pins an image on a board, all of his connections can see the image.
The campaign garnered more than 2,000 repins, which Bonobos' analytics provider, Curalate, found attracted more than 500,000 impressions.
While consumers can pin images of Bonobos apparel on Pinterest without the retailer doing anything, Bonobos creates its own boards to showcase its styles. For example, its "We're suckers for seersucker" board features six ways to wear its seersucker designs, ranging from a casual shorts outfit to a more formal suited look. It also offers a taste of its personality via boards like "Things that make a Super Bowl party" that features images of foods like chipotle macaroni and cheese with bacon, kitchen gadgets like the Krups BeerTender and a messy countertop with the caption: "Someone else's apartment so you don't have to worry about the mess."
Kirkland's also built its Pinterest following via a contest. The home decor retailer in mid-April launched a "Pinning Parlor" section of its MyKirklands.com online forum, featuring inspirational images, do-it-yourself-type tips and images the retailer encouraged consumers to pin. Each image a shopper pinned from the Pinning Parlor onto Pinterest counted as an entry to win a $2,000 weekly giveaway.