Just a third of online retailers are seeing a direct business result or spike in customer engagement from using social media channels in their marketing strategy.

Although the evidence remains patchy and finite, a recent survey by ChannelAdvisor suggests that social media sites such as Facebook, Twitter and Pinterest are either under used or are not delivering effective results for retailers.

The company, who has partnerships with Tesco Marketplace and Best Buy, anonymously interviewed around 50 small to large online retailers last month (April 2014) from a range of sectors including fashion/apparel, sports and outdoors, grocery, health and beauty, entertainment and electronics.

Twitter, which allows advertisers target people by interest, keywords, gender and geography, saw a revenue surge of 116 per cent to $242.7m for the three months to 31 December 2013. Advertising accounts for 90 per cent of total sales at the firm.

Facebook, valued at over $100bn, also makes its money from advertising. Revenue in the fourth quarter of 2013 was $2.59bn and advertising accounted for $2.34bn of that figure. Profit for the period was $1.4bn.

Social not built for buying

Anthony Gale, managing director of Click Here Media who has devised social media strategies for LK Bennett and Hedonism Wines says retailers mainly use social to raise brand awareness but concludes that most social platforms are not built for buying.

“The PR angle of social media which is to create awareness, is key, but some clients try to use it for direct sales which often isn‘t the best use of budget,” he told Retail Gazette.

“Social media sites such as Twitter, Tumblr and Facebook are not built for buying. Facebook does work for some direct sales, but it‘s not geared up for such and often puts people off. When people go on Facebook they don‘t want to be sold to and with the explosion of mobile it‘s now even less likely consumers will want to buy directly from them.”

He added: “When we speak to clients one of the key things they look at is likes, re-tweets and repins but a lot of those are hollow. Social cannot stand alone, but needs to be part of a bigger digital or marketing strategy”

The fashion industry spent 60 per cent of its marketing budget on digital channels in FY2012.

A 2013 CMO Survey conducted by Duke University found that social media spending currently accounts for 8.4 per cent of marketing budgets and over the next year it is expected to increase to 11.5 per cent, jumping to more than 21 per cent in the next five years.

As a retailer, what is your experience of using social media?