Significance of Social Media for Online Retailers

In the offline retailing world, direct contact with the customer cues for the establishment of trust, but in case of online retail two way interaction is a boon. Social networks gives online retail brands this opportunity to form a relationship with the customers and also allow them to interact with the consumers individually, providing platform for building trust, loyalty and revenue from the digitally aware consumer.

Social media sites are expected to become increasingly important for retailers, as it will take more consumers to the sites to browse for, review and even purchase products. A research from Gartner estimates that, “Half of New Retail Customer Identities Will Be Based on Social Network Identities by 2015.”  Various ecommerce companies across the globe are increasingly using the social media platform as a marketing tool and focusing on their social media strategy to capitalize on the platform’s strengths, viz. high consumer traffic, direct communication and low costs. Hence, brands and retailers have started getting onto social media to reach out to consumers, employees and partners.

Some fine aspects how brands can leverage the social media platform.

  • Brand Building: Marketers now accept that social media is a fundamental part of brand building, but putting that theory into action is still a ‘challenge’, as many struggle with how to use social engagement effectively. Marketers must still forge an identity for the brand and communicate it across all consumer touch points to create a consistent brand experience. But in the 21st century, brands need to have a ‘social story’ to leverage the emotional and persuasive elements that make offerings successful (Forrester). In reality, social media doesn’t only establish brand in the market but also play a key role in communicating the brand promise.  Presence on social media is now hygiene if you are targeting demographics of consumers on social media.
  • Consumer engagement: It acts as a platform that offers potential for higher level of consumer participation. Consumers via social media are allowed to offer opinions, write product reviews, initiate discussions and become fans through any of the social media channels such as blogs, review forums and social networking sites. Presence on various social networking sites, gives companies ability to connect with consumers directly.  This has also led to shift from company-customer interactions to customer-customer interactions which have a direct influence on company-customer relationships. Invest in skilled employees to understand your brand and can engage your consumers on social naturally. Be open for negative feedback and understand in the digital world with increasing consumer awareness it’s hard to escape, take it your market feedback.
  • Low Cost: Social media can be a tool of ‘low cost marketing’ as strong proposition and compelling call to action can drive easy referrals and add virality. Butwait, it’s always easy said than done. Online retailers are better positioned to leverage social media marketing because they predominantly operate through a website or a portal. While social media cannot replace traditional advertising, but use of social media to market products and website helps companies expand their reach without increasing cost. And targeting consumers who are online rather than investing in acquiring an offline consumer.
  • Paid Marketing Campaigns: Properly planned and effectively executed marketing campaigns through various social media avenues can encourage a high level of end-user participation and increased sales as well. Aside from that, promotion of products through social media channels also helps in increasing conversion rate and increased ROI as well.
  • Increased Site Traffic & Impulsive buying: By continuously engaging & Leveraging customers on the social media platform, online retailers can increase the number of visitors to their site and thus this rising number of visitors on the website can increase the probability of higher sales and it also encourages impulse buying i.e. consumers may tend to purchase products without proper planning.
  • New Product Launch:  Social media can be a great tool for promoting new product or service prior launch. Online retailers have learned to target key influencers on the social web with free products often in advance of a formal launch. This also gives companies a chance to engage with specific segments of your target audience to generate conversation and interest among them. By posting hints and product images ahead of time you can build up the steam of anticipation on social networking sites.
  • Feedback: As social media help in engaging customers, thus companies always have access to feedback and customer reviews and feedback help companies in making your products or services even better.

Challenges in social media
Though social media provides a great platform for the online retail companies to engage with the consumers and increase sales, but certainly factors like managing content, problem of fake accounts for paid campaigns, and sometimes inability to manage ROI act as the drawback and for many companies it may also act as a costly investment.

  • Managing Content: When a company is engaged on social media platform its needed for the companies to create compelling content, as Content takes professionalism in design, writing skills, video production, photography, webcast production, audio development, etc so it becomes primary task for the companies to manage all and also make sure that the content is engaging and supports the online brand.
  • Fake Accounts: Increased use of fake accounts for like by various companies has led to another drawback on use of social media for brand promotions and thus is also skewing actual social interaction. There are various websites that have come up which provides companies these services like providing fake likes, but companies should understand that fake likes do nothing for a company because those fake accounts are not buying their product, promoting it neither are engaging with the company.

So if you are offline and missing out the consumer impact on social, you can start as below.

  • Invest in a team that can lead your social presence
  • Train your employees to understand and communicate your brand well for social audience
  • Bet on servicing your consumer across the channel and develop a strong communication with them on social.
  • Track the ROI but don’t stick to a single platform, invest in niche communities and mass communities.
  • Create a consistent approach and test wisely.

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