Guest Blog by Aneesh Reddy
Social media is entering an unusual phase in its life as a form of communication and potential business tactic. While marketers have been using social media for more than a decade and there is a growing array of diverging social media networks, its dynamics still change regularly, and what we come to learn about the field is still somewhat yet to be determined.
On the other hand, retailers have enough information about social media to take actionable measures that drive better customer engagement, improve satisfaction, increase loyalty, build purchase frequency and boost size of retail baskets. Social media serves as one of the most flexible ways to leverage classic marketing message strategies, including upselling, cross-selling and bundling for customers. Its speed and capability to create a prolific volume of communication remain unmatched. The Q4 2013 Social Media Intelligence Report from Adobe clearly demonstrates that website traffic by retail customers driven by social media use is rising across all major networks and that revenue per visit (RPV) from customers is on the rise in all networks, too.
In other words: Retail works. Well.
But what’s the actual reason behind social media’s role in retail success? Like most market dynamics, the forces driving social media’s connection to retail prosperity are multi-faceted and complex yet explainable. Furthermore, understanding those dynamics drives ROI for both short-term campaigns and long-term planning.
Force #1: Big Data
The amount of information yielded to companies in real-time through social media outpaces almost any other method of data collection. One of the biggest potential impacts social media brings to the table is its ability to both gather and unpack data. Given that customers may not have initially provided 100% of information in-store, on the phone or during an initial e-commerce transaction, social media can provide tremendous amounts of help in completing the picture of customers. Social media trumps previous electronic information-gathering methods such as email in that it creates a social realm that allows customers to engage the brand in a more comfortable digital environment. This leads to wave after wave of data for retail marketers and business development specialists, all of which requires analysis.
This need has opened up an extended B2B market, as solutions that provide customer insight have become a key part of the marketing toolbox. Those same solutions are then used to take immediate and impactful steps on performance.
Force #2: The Omni-Channel Exchange
Using multiple channels simply to gather information is not the only way to utilize the multi-dimensional communication network available to companies. Social media’s role in the larger ecosystem of customer communication makes it a cornerstone of what we might call “the omni-channel universe.”
In the omni-channel universe, customers can interact and engage, send and receive, and generally have a complete customer communication experience. Congruently, brands can engage customers on an open platform, monitor loyalty and customer churn, make timely offers and couple marketing channels to build better campaigns.
Social media is an excellent route to either establishing (hunting) or enhancing (harvesting) these campaigns, both of which are essential to better sales performance. Social media also allows for real-time customer feedback both positive and negative, and in combination with feedback from other channels, builds a richer and more textured set of customer touch points. Conversely, brands are capable of equally involved, high-speed engagement with customers, leading to better understanding and stronger relationships with the most important stakeholders of your business.
Force #3: Engagement in Over-Drive
Social media’s real differentiator as a potential retail business game-changer is in its ability to drive engagement tactics that haven’t previously existed. While customer feedback has been gathered for a long time via various innovative methodologies such as mystery shopping and surveys, social media allows for that feedback to be immediate. This same effect is at play in advanced gamification: check-ins, picture capabilities and comments on different social media channels open the door to a new world for retailers looking for inventive marketing tactics. Social media combined with in-store activity leads to fascinating instant offers tethered to movement as complex as in-store footfall and general purchase frequency. As social media and measurement tools simultaneously evolve, their complementary interaction becomes ever more powerful.
Implications for the Future
As social media continues to grow, shape and evolve, several major trends will likely occur. The popularity of certain networks will rise and fall according to user preference evolution, demographic and psychographic shifts, and other unforeseen variables. Retail brands will continue to provide real-time feedback, shortening the window between initial customer feedback and brand response. Brands will continue to investigate more and more powerful ways to engage the audience. Most importantly, social media use will continue to grow and continue to be effective.
Aneesh Reddy is Co-founder & CEO, Capillary Technologies