Groupon says its focus is on the bottom line, rather than top-line growth.
The junior and plus-sized fashion retailer, ranked No. 129 in the new 2014 Social Media 500, boosted its social commerce sales an estimated 131% last year. Learn the retailer’s secret to driving shoppers to see its posts and, eventually, to click and buy.
David Cost, vice president of e-commerce and digital marketing at junior and plus-sized fashion retailer Deb Shops, knows that it often isn’t enough to rely on “owned” traffic that shoppers see when they follow a retailer. In part, that’s because a Facebook user typically sees only about 16% of the content his connections, including retailers, post on the social network, the social network says.
To increase social visibility, retailers have to “earn” views, drawing shoppers in by posting content interesting enough that they pass it along or mention the brand in their own posts, Cost says.
Deb Shops also pays to promote posts on Facebook and Twitter to ensure its messages are seen by a certain percentage of fans—or other consumers—and makes use of social networks’ other ad formats that focus on boosting engagement via Likes, comments or retweets. But to be effective, Facebook ads have to be well-targeted, says David Perleberg, principal at social marketing vendor Rep Empire Inc., which Deb Shops works with.
Deb Shops uses Facebook’s Custom Audience tool that lets advertisers employ information shoppers share with them off of Facebook to target ads on the social network, as well as its Lookalike Audience tool that lets marketers target ads at consumers who share similar traits to its Custom Audience segments. Those tools enable the retailer to present consumers with products and styles that match their individual tastes and preferences, Perleberg says.
The approach has helped the retailer grow the percentage of consumers who click from social networks to its site from 3.0% of total online traffic in 2012 to 5.5% in 2013, according to the just-launched Internet Retailer 2014 Social Media 500, which ranks the leaders in social commerce by the percentage of web site traffic they receive directly from social networks. And many of those shoppers who click to the retailer’s site are buying; the retailer grew its social commerce sales an estimated 131.3% in 2013 to $646,800.
Many other retailers are also seeing greater return from their social media investments. As a whole, the most effective social media marketers in e-commerce generated more traffic and sales directly from social networks in 2013. The Social Media 500 collectively boosted monthly referral traffic from Facebook, Twitter, Pinterest and YouTube 42% to 51.5 million monthly unique visitors from 36.3 million in 2012. Revenue derived from those visitors jumped 63% to $2.69 billion from $1.65 billion.
This growth in part reflects aggressive efforts by Facebook, Twitter and Tumblr to increase their revenue over the past year by introducing new advertising formats and tools. The companies introduced several new ad units that let marketers target distinct subsets of shoppers at specific times, and track how shoppers respond.
“We are working in a number of areas to make the ads people see on Facebook better,” said Sheryl Sandberg, Facebook’s chief operating officer, during a third quarter earnings call. “We want to make it easier for marketers of all sizes to buy ads and measure their impact.”
That helps explain why retailers are boosting their social media ad budgets. Spending on social ads by 40 retailers that supplied data for the Social Media 500 increased 400% from 2012 to 2013.
For instance, the social network ad budget for jewelry retailer Alex and Ani, No. 83 in the Social Media 500, soared from $88,000 to nearly $1.47 million. Meanwhile, outdoor gear manufacturer and retailer The North Face went from having no social media ad budget in 2012 to spending $400,000 on social media ads last year.
The reason, says Perleberg, is that retailers like Deb Shops are finding that the ads are paying off.