Shortsighted Social Media Strategy Misses Huge Revenue Opportunity
By Brian Smith, [email protected]
While investors put a staggering $18 billion valuation on Twitter at its initial public offering last week, the potential direct-sales value of Twitter and other social networks for large enterprise businesses is potentially even bigger. But companies have to know how to reach their customers with the right message to monetize their social media presence.
Check the corporate social media feed of virtually any large company, and you’ll see a prevailing strategy that’s woefully incomplete. Large enterprise retailers issue updates through popular, centralized, corporate social accounts in an attempt to give existing customers consistent exposure to and occasional interaction with the brand. True, the brand visibility made possible through this approach to social media is good for big companies, and existing strategies do sometimes lead to new-customer acquisition; but most large companies aren’t taking aggressive steps to convert social media follows to direct sales, and it’s hurting the bottom line.
Consumers are eager to financially engage with their favorite brands via social media. One recent study found four-in-10 social media users have purchased an item online or in-store after sharing or favoriting it on Twitter, Facebook or Pinterest. But in order to connect in a financially meaningful way, companies have to know how to approach their customers. A huge following on a corporate page might look good in an annual shareholders’ report, but it often doesn’t lead to a measurable return on investment. Instead, companies should focus on engaging with customers where customers want to engage — at the local, personal level.
Starbucks, as just one example, has amassed an impressive 35 million Facebook likes, making it one of the biggest corporate presences on the site. In fact, retailers in all sectors — from general goods retailers like Target (22 million followers) to clothing sellers like Gap (4.6 million) to telecom providers like Verizon Wireless (5.8 million) and AT&T (4.7 million) to video game stores like GameStop (5.6 million) — seem to concentrate on attracting followers to a centralized, corporate-controlled social media presence.
These corporate “likes” are good for brand visibility, but they won’t drive very many sales. While maintaining a strong presence on the corporate “parent” page, companies’ sales team should pay much more attention to the thousands of local stores that have — or should have — a social-media presence. Though those “child” pages have fewer followers, they’re much more likely to convert to direct sales. Why? Because social media is about personal relationships. By liking local pages, a consumer is connecting with the Starbucks barista who makes her morning latte, the Gap fitting-room associate who helped her pick out a new outfit, or the GameStop manager who reserved her a copy of the latest Xbox hit.
And as a Millennial skeptical of enterprise advertising, that consumer is much more likely to buy from those people she knows than from a corporate marketer she doesn’t know. According to emerging research on social media engagement, consumers are five-to10 times more likely to engage with a local Facebook page than they are to engage with a corporate page. With the right approach to the creation and distribution of content, converting that engagement to direct sales is a lot easier than most companies realize. Importantly, they can convert sales while maintaining corporate control over messaging, brand identity and sales strategy.
Most large retail enterprises are good at the analog parent-to-child relationship. Corporate offices create compelling point-of-sale displays and distribute them to thousands of brick-and-mortar stores across the country and around the world. These displays are expertly designed to directly drive sales of whatever product the corporate office is trying to move that day, week or month.
Large enterprises need to start pursuing the same parent-child distribution relationship in the social-media world. Digital marketing pieces published on the social feeds of all local pages, from one dashboard, allows corporate messaging to reach consumers where they’re more likely to engage with it. And, it provides local store managers with much-needed content to keep their feeds populated and keep customers engaged. These pieces should be customized for individual stores, serving as e-commerce versions of in-store displays, showcasing products and appearing in feeds based on the company’s understanding of what products are selling where, and to whom.
Translating that functional parent-child relationship to the digital world has proved challenging for many companies, but a better understanding of how consumers engage on social media and a rapid growth in innovative technology to facilitate the digital parent-child relationship are changing everything. By combining sharable marketing content with an e-commerce component driven by a better understanding of social tools, large companies can broaden their vision for social media engagement and realize a quantifiable return on investment.
Brian Smith is the founder and CEO of BizBrag, a social media consultant and software firm based in Austin, Texas. He can be reached at [email protected].
Sears sells real estate in Canada
Sears Canada announced that it has reached a definitive agreement with Montez Income Properties Corp. to sell its 50% joint venture interest in eight properties it owns with The Westcliff Group of Companies for approximately $315 million.
The agreement is subject to customary closing conditions including site investigations and financing. The transaction is scheduled to close on Jan. 8. The properties involved are comprised of four regional shopping centers, two strip centers and two open-format retail centers. Westcliff will continue as 50% owner and exclusive manager of the properties.
Sears stores that are currently situated on these properties will remain in operation; there will be no impact on customers or associates in these stores as a result of this transaction.
"As we have previously stated, unlocking the value of assets is a lever we use as a way to help create total value," said Doug Campbell, president and CEO, Sears Canada Inc. "The joint venture assets we are selling to Montez impact neither our store operations nor our ability to serve customers. As such, our primary focus in creating long-term value remains on the basics of the business and continuing to become more relevant with Canadians coast to coast."
Sears Canada is a multichannel retailer with a network that includes 181 corporate stores, 246 hometown dealer stores, over 1,400 catalog merchandise pickup locations, 101 Sears Travel offices and a nationwide home maintenance, repair and installation network.
comScore: Digital commerce soars in Q3
Reston, Va. – U.S. desktop-based e-commerce sales grew year-over-year to $47.5 billion during the third quarter of 2013, marking the 16th consecutive quarter of positive year-over-year growth and 12th consecutive quarter of double-digit growth. In addition, newly released comScore data shows that e-commerce spending on smartphones and tablets added $5.8 billion for the quarter, up 26% from year ago, for a total digital commerce spending total of $53.2 billion in the third quarter.
The top-performing online product categories were: digital content & subscriptions, apparel & accessories, CPG, consumer electronics, and jewelry and watches. Each category grew at least 14% from one year ago. E-commerce accounted for 9.4% of consumers’ discretionary spending, the highest third quarter share on record. Of the additional $5.8 billion in mobile commerce (m-commerce), purchasing using smartphones accounted for 62% as compared to 38% from tablets.
“Third quarter e-commerce spending grew 13% from a year ago, and although that marks a pretty healthy growth rate, it also represents a slight deceleration from the prior quarter,” said comScore chairman Gian Fulgoni. “Other macroeconomic indicators also suggested relative softness in discretionary spending, which offers some cause for concern as we head into the holiday season. Although there was evidence of slightly diminished consumer confidence in Q3, a more optimistic take is that increased outlays on large purchases such as new homes and automobiles may have temporarily squeezed other discretionary consumer spending. That said, the trend could still spell a challenging holiday season for retailers this year – particularly given the highly compressed calendar between Thanksgiving and Christmas, which contains six fewer shopping days than last year and is the shortest shopping season since 2002. Nonetheless, we are confident that the growth rate in online spending will once again far exceed that in bricks-and-mortar stores, reflecting the ongoing channel shift to e-commerce.”