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Retailers & social media: know your objectives


Aaron Chatterley, CEO and founder of online health & beauty business, offers his views on e-commerce and how companies can get the most out of social media.

If you ask 100 retail CEOs if they are increasing their spending on social media in the next 12 months, I firmly believe about 95 or more will say “yes”.

Ask the same 100 CEOs whether they can measure ROI from social media spend and I would be surprised if more than a small handful could provide a positive answer.

Therein lies the dilemma facing every retailer, be they based on the high street or online.

The pressure to have a fully fledged social media presence is overwhelming. For marketing and communication directors schooled in the days when having an online presence meant a basic corporate website, the development of Facebook, Twitter and so on, presents a fundamental challenge to established ways of thinking.

While many follow the “everyone else has a Facebook page so we need one as well” philosophy, fewer marketing directors know what to do with it once its up.

I feel sympathetic towards a marketing director who proudly trumpets the fact that his company’s Facebook page has 10,000 fans, only to be confronted with the question “so what?” What on earth do you do with these fans and more importantly do they add value to your business?

Both questions are tricky to answer. The answer is best formed by another question: What are you objectives? For retailers, showcasing new ranges, new products and sales offers is obviously important. But companies that solely use social media as another sales channel are missing the point. Any retailer’s community of advocates does not want to be bombarded with sales messages.

At Feelunique we use our Facebook group as a way of providing beauty advice to our fans. Over a dozen of our staff, who have specific expertise in areas such as make up, hair care and so on, provide at least the same level of consultancy as you would find in a premium department store.

For us, the challenge has always been to convince high end brands to supply stock to a dedicated online retailer. Our social media interaction with customers demonstrates our ability to provide that layer of value added consumer support that places Feelunique on a par with department stores. And we have reached a point where nearly all premium product suppliers agree with us.

In addition, we are developing our own Facebook shopping engine, but it is too early to tell whether it will ultimately become a significant sales channel.

I do not want to focus on Feelunique’s social media strategy, but rather I use it as an example of how social media spend should be rooted in answering the question: What are my business objectives?

And that leads to how ROI is measured. For Feelunique, the value of convincing premium beauty brands to supply to us is invaluable. But other retailers will have other objectives and other methodologies for measuring success.

At a fundamental level, social media allows you to enter into a dialogue with your customers. That invites criticism, but more importantly it allows you to publicly respond to criticism and that greatly boosts any retailer’s brand credentials. I wonder why any company hires expensive market research firms anymore. Why bother - just ask your customers directly. And they will appreciate being asked!

Social media works to drive traffic to your online sales environment - but too many e-commerce players fail because they think social media is the start and end of their sales strategy. Paid search, PPC, Affiliates and offline marketing are still vital elements of any sales strategy - and always will be.

So what does the future hold for e-commerce companies?

If you look at Mintel research, most sectors are still growing rapidly. What is becoming apparent is the emergence of niche players that are beginning to become household names in their own right. A few years ago e-commerce in the UK was dominated by the online equivalents of giant supermarkets such as Amazon, Play and Lastminute.

But now e-commerce players are making serious money from dominating a niche vertical market. Whether its bathroom taps, duvets and pillows, beauty products or retro clothing, the market is now sufficiently developed to allow smaller companies to thrive. In that regard, the e-commerce marketplace is now more closely mirroring the diversity of a town high street rather than an out-of-town retail park made up of a few giant stores.

Social media is fuelling that trend by providing additional visibility for smaller players. And as far as the consumer is concerned, that can only be a good thing.

Published on Friday 18 February by Editorial Assistant

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