Social media: Proceed with caution

By Kevin Moffitt,

There is no denying that social media presents a significant opportunity for retailers. Connecting your customers simultaneously to each other and to your brand is a potentially a powerful marketing strategy.

However, any e-commerce/cross-channel marketing strategy, particularly those that encompass social media, should be both:

   1. Closely aligned to customer needs and behaviors; and
   2. Prioritized against other potential sources of business value.

Amid the excitement generated by social media, I’ve talked to many retailers who want to discuss their social networking integrations prior to doing even a basic usability study on their own Web sites. We’ve found major holes in online checkout processes, for example, that cost the retailer millions of dollars in lost sales. Optimizing product details pages, search, and checkout won’t win a retailer a lot of attention in the press, but it can lead to substantial ROI. The point is to address first things first -- go where the easy money is.

Prioritizing social media against other sources of business value is a critical exercise for retailers to determine what strategy is right for them. Before focusing exclusively on external sites such as Facebook, where it may be difficult to entice customers to “friend” your company, and even more difficult to convert those who do, I would encourage retailers to look at strategies for leveraging the traffic they already have coming to own sites.

Average e-commerce conversion rates vary around 1% and 5%, meaning 95% or more of the traffic an e-commerce site receives doesn’t translate immediately to a sale. On-site community building tools such as ratings and reviews, blogs, discussion forums, photo galleries and contests, and moderated chat sessions can not only help convert new customers, but also help deepen relationships with existing customers.

One significant benefit of this approach is that all of the data that’s gathered on the site belongs to the retailer directly. Another key benefit is that community pages can be monetized through onsite advertising and sponsorship programs, which translates directly to the P+L, allowing the retailer to further leverage non-converting visitors.

That being said, for those retailers who have optimized their own site experience, Facebook and Twitter can be effective marketing tools for communicating promotions and connecting consumers to your brand. Some retailers, such as Victoria’s Secret, boast over a million fans on their Facebook pages. Other sites, such as the crafts marketplace Etsy, have over a million followers on Twitter.

Yet many still struggle to determine the value of friends and followers, at least in the short term. In the Etsy example, their outreach program is successful in part due to their organizational focus -- Matt Stinchcomb, their dedicated VP of community, is responsible for both internal and external social programs, including onsite features such as blogs and forums, as well as integration into Facebook and Twitter.

So, while social media is an exciting platform that carries significant branding and traffic potential, retailers are best served taking a step back to examine both customer behavior and business priorities to ensure future success.

Kevin Moffitt is VP strategy & customer experience of CrossView, which brings more than 12 years of experience building cross-channel solutions for clients ranging from Top 10 Internet retailers to organizations expanding into multiple channels ( He can be reached at

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