As Liz Morrell observes, for retailers social media offers a new, easy to access, cost effective channel that used correctly can not only complement other online marketing efforts but also drive sales and customer loyalty

Whether through ignorance or fear, many companies are missing out on such opportunities. A recent survey by dotCommerce of 100 UK retailers found only 42 per cent had some kind of social media presence and that only a third of those that had a Twitter or Facebook account actually promoted them on their website.

Paul Dunay, global managing director of services and social marketing at Avaya and author of Facebook Marketing for Dummies, is puzzled. "Facebook has 450 million users - half of whom show up every day. It's a very engaged audience and they will surpass Google by the middle of the year. If I could offer you a
billboard in Times Square or Piccadilly Circus for free you would take the opportunity so why would you not take advantage of this? Unlike your own website the likes of Facebook and Twitter are free so setting up in that space is a brilliant idea," he says.

Hedley Aylott, managing director and founder of specialist retail and digital marketing agency Summit Media, says retailers can't afford to shy away from the medium. "Social media is happening whether they like it or not but most retailers aren't even aware of what people are saying about them," he says.

He advises companies to run social media audits following the example of the likes of Comet and Argos who already have a listening approach. Using Summit Media's Stingray technology the company can monitor mentions across the web. "Those issues can vary from HR to delivery so you need to catalogue and prioritise those mentions according to sentiment and then get it to the right person in the business," says Aylott.

As well as being an important marketing tool social media also offers opportunities to deal more effectively and publicly with customer service issues especially on sites such as Twitter. "It's a public conversation so is a great opportunity to really impress people," says Phil Stewart, director of customer services at Virgin Media Business who says that retailers such as Next and Marks and Spencer have already realised the benefits of using Twitter for customer service but that only 16 of the FTSE 100 have got onboard with it.

In the US electrical retailer Best Buy has signed up more than 2,500 employees as part of its Twelpforce - a Twitter community which, since its launch last July, has provided more than 24,000 answers to customer enquiries in the US.
Making a decision to invest in social media isn't so much about cost but about commitment and it seems this is what scares many retailers off. Content has to be maintained and sites such as Twitter continually monitored otherwise the message portrayed to customers is worse than not having a social media presence. "Having a Twitter account that is not responded to is like having a call centre where no one is answering the phones - it's very dangerous - whereas if you approach it correctly you will immediately see the benefit," says Stewart.

A spokesman for American Apparel agrees retailers must invest both time and effort in social media. "It's important to us, but also important that we don't just pay lip service to it. We're trying to use this space to do creative, artistic and interesting projects like our Lookbook.nu Lookbook," he says. This 64 page booklet was created using images of outfits sent in by customers. The
retailer also has Twitter, Facebook and Youtube channels of communications with its customers as well as featuring bloggers on its product pages.

"Many people spend more time planning the wedding than they do the marriage and the same is true in social media - people spend more time planning their Facebook page than managing it," says Dunay.

Others simply treat it as a tickbox exercise, according to Simon Bird, technical director at dotCommerce. "The most successful ones are opening up their business - for instance, the chief executive is tweeting about the business and being really personal whereas you see a lot of people getting into social media and it's like the comments have gone through the legal team," says Bird.

Handle with care

For some, the fear comes from a supposed overload of information but Roger Llewellyn, CEO at Kognito, say this is no longer a reason not to be investing. "The value of social data is multi-fold when you can combine it with retail data. The issue becomes the ability to absorb huge amounts of data but modern technology can read billions of conversations in a second. Technology is now allowing us to do anything we want with data so it is only limited by the imagination of the client user," he says. But he believes many retailers have yet to realise this. "If you are a retailer looking at this you need to establish what you want to do without thinking about the technology needed," he says.

Retailers will also increasingly use social media to sell to customers - though this also has to be done with care. When Interflora incorporated a Facebook page into its customer engagement strategy earlier this year, the company reached 700 fans and generated 60 orders in the first month alone.

Snap on functions such as Facebook Connect, which the likes of Dell is already using to send coupons to customers, is also going to become increasingly important. "Retailers are starting to have success in creating revenue through their social networking sites," says Dunay. "The revenue model for social media is going to be very strong. The future of retailing is going to change and starting to understand now how you can harness social media for the benefit of sales is going to be key," he says.

In the UK social media has aided Best Buy's launch into the UK with its content and community-rich website launched at the beginning of January. "Our aim is to encourage enthusiastic participation with our brand, our company and our plans - and to educate and inspire people about how connected technology can improve their lives," says Kevin Styles, marketing director at Best Buy UK. "Our website, with our blogs and forums, provides us with a platform to capture feedback, to see what people think," he says. However, it is also complemented by a range of other social media measures. "It's just one component of our social media strategy, which also encompasses Twitter, YouTube, Flickr, social bookmarking, and are ways for us to reach a wider audience who may not already know Best Buy," says Styles.

Technology is key. "We are employing a variety of technologies including our own proprietary web platform which sits alongside a third party blog platform. We're also using a number of measurement tools which measure and track trends and hot conversation topics in social media, and which areas of our own website and its forums and blogs are most popular and engaging," says Styles.
"Equally important to us is the reaction to our efforts on our own site, and on Twitter, YouTube, Flickr and social bookmarking sites. The number of people that are following us and getting involved in conversations on all these sites has grown at a rate we are very happy with," he adds.

And customer reaction has proved that customers want to have a voice. "It demonstrates the latent demand there is for this kind of activity in a retail environment," he says.

Charlie Osmond, managing director at social media agency Fresh Networks, agrees: "There is a real opportunity to connect and drive sales and it works more strongly when you are hosting a conversation on your own terms. That can be as simple as ratings and reviews or can be your own blog," he says.
Jacob Salamon, international marketing manager at Bazaarvoice, says ratings and reviews are an ideal first step in social media because they place the customer conversation directly within the purchase path. "Technologies such as customer ratings and reviews are a quick win. They provide customer opinions and recommendations directly where potential buyers are shopping, are proven to increase conversion rates (sales), decrease returns, increase average order value, and ultimately build loyalty and a community for a brand," he says.

"Overall, there are many places a brand can start with social media, but we recommend making the conversations relevant to the products being sold, so that other shoppers have the information they need to feel comfortable buying the right product. This user-generated content will have benefits to the brand on-site, but can also be used in many other marketing channels, such as in-store, in blogs, on Facebook, in catalogues, etc."

Organisations undoubtedly need to do more. According to the dotCommerce survey only 12 per cent are using more than one social media channel and only 32 per cent of those with a Facebook page actively promote it on their website.
Bird believes retailers are in the testing stages or are nervous. "Some people don't want that association because they see the likes of Facebook as a little like the Wild West, as it's not controllable, so the thought of actively sending site traffic to somewhere that is not controlled really does fill them with dread and they won't take the risk," he says. But by having staff active in social media communities - in the same way as Best Buy's staff are active on Twitter can mitigate those risks, says Bird.

Social media will change the way retailers and shoppers interact. "The future has yet to be written but a lot more is possible and it's a whole new playing field," he says.

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