2012 Retail Outlook-Part 4: The New Look of Social and Digital Media

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The Ecommerce Revolution

Ecommerce is rapidly developing with endless opportunities. For retailers, ecommerce provides tremendous potential to take advantage of data along with consumer wants and needs to boost conversion rates and create personalized experiences for consumers. It also provides potential for smaller retailers in which they can take a piece of the online sales pie, so to speak, from virtually anywhere.

As for the history of ecommerce, it’s short, but brilliant taking center stage in the 1900’s with the evolution of eBay and Amazon. However, there hasn’t been much innovation in the past 10 years, until now.

Here are some stats on the Internet and ecommerce:

  • North America’s Internet audience will continue to expand in 2012 to 78.3% of the total population – 272 million users in total.
  • Online buyers will reach 154.6 million, up from 4.4% in 2011.
  • The top 2 purchases made online are clothes (3.6%) and books (4.6%).
  • Some analysts go so far as to say that ecommerce will reach $278.9 billion by 2015.
  • The percentage of new shoppers is fewer every year and overall growth in ecommerce sales will come from existing shoppers simply buying more.

Sources: US Census Bureau, Nielsen, Forrester Research and Pew Research Center

The look of ecommerce in 2012

Basic economic principles of new media require that, in order for ecommerce and the media channels it utilizes to have value for its users, consumers need customization and personalization capabilities, a sense of community and the ability to share and receive relevant information. The ecommerce revolution will be just that: truly engaging consumers in 2012 and beyond.

The success of ecommerce has been primarily built on personal recommendations as well as retail and product personalization. But retailers have begun to see an increasing amount of data at their fingertips. According to David Selinger, CEO and co-founder of RichRelevance, “Personalization will be the differentiating factor in ecommerce and digital commerce going forward, especially for multi-channel retailers and new entrants online.” The retailers that take the data and learn everything there is to know about each customer will be the best.

The fact is that right now retailers are merely making suggestions of what other shoppers who bought a certain item also purchased, or recommendations of items similar to what that particular shopper purchased. But there is an endless amount of social and in-depth purchase data that retailers need to acknowledge and source to help increase sales. Starting now, ecommerce is about to get more personal. After all, people become more invested in a retailer who knows their preferences and will be more likely to return.

For information on managing ecommerce inventory visit>>

F-commerce and the Facebook Store

“There was a lot of anticipation that Facebook would turn into a new destination store, a place where people would shop. But it was like trying to sell stuff to people while they’re hanging out with their friends at the bar.”
– Sucharita Mulpuru, Forrester Research analyst

The retailers that were once taking to Facebook opening storefronts as a means to generate profit and achieve business goals are now shutting their Facebook doors. But just because Gap, JCPenney, and the like are closing up shop doesn’t necessarily mean Facebook is a fail. So, do social networks and commerce mix?

A year or so ago, analysts and investors hailed F-commerce as the next big thing and perhaps this is still true today. It’s been said that retailers may be to blame for their own demise, not understanding the true ways to monetize social media, especially Facebook, and not taking the right approach. However, RIS News put together a list of retailers and the ways they are using Facebook as a means to accomplish measurable business objectives:

  •         L’Occitane Lures Facebook Fans with Giveaway: Offering a voucher for a free tube of hand cream built store traffic and boosted the retailer’s Facebook fan base by 80%
  •         FYE Boosts Facebook Fans 56% with ‘Twilight’ Promotion: The entertainment retailer used a chance to attend the Los Angeles premiere of the latest Twilight movie to significantly increase its Facebook fan base
  •         Sephora Boosts Brand Awareness with Facebook Fan Fridays: Weekly deals are shared first on Sephora fans’ news feeds, where they can then share offers with friends
  •         American Eagle Interacts with 6M Facebook Fans in Real-Time: After reaching a goal of 6 million Facebook fans, the retailer rewarded those fans with an exclusive 20% off coupon

Read more about retailers recent Facebook activities by accessing the full RIS News article here>>

Maybe Facebook stores do deserve some of the blame, but retailers shouldn’t dismiss the variety of creative ways Facebook and F-commerce can be leveraged to boost sales, increase service, and engage consumers. Retailers shouldn’t just shove products onto Facebook users – people drive social commerce – so build a feature or service people actually want to use and share with their Facebook friends.

Pin It

The days of cork bulletin boards are gone making room for a bookmarking social media site that lets users collect and share things they like on the web via virtual pinboards. The site, also known as Pinterest, has registered more than 7 million unique visitors and is driving more traffic to company websites and blogs than YouTube, Google+ and LinkedIn combined, according to a recent report from content-sharing site Shareaholic.

Check out Pinterest here>>

As a powerful tool that allows companies and brands to display images of products on Pinterest boards linking them back to websites – sort of like a viral store catalog – is reason enough for retailers to take action launching their own boards on everything from apparel and beauty to travel destinations and recipes. Internal data from the marketing optimization technology company Monetate indicated the amount of traffic Pinterest has sent to brand and company websites has risen fourfold between September 2011 and December 2011 becoming a top five referrer for several apparel retailers.

 

 Source: Monetate

However, Pinterest like other social media platforms is a conversation that involves and requires contributing other content or sharing other users’ pins to be successful. It’s also important for retailers to stay away from images and pins that can be deemed too promotional. For instance, Whole Foods Market pins photos of food, food art and images of recycled and reused products to inspire customers to think and act with the environment in mind.

According to an article in Adweek, retailers including Gap, Nordstrom and West Elm are seeing referrals to their sites from Pinterest. Gap only created its own pin boards after noticing that consumers were grabbing images from its site to use, or pin, on Pinterest. But as Pinterest becomes a top traffic driver for retailers, the format has yet to prove itself as a potential commerce channel. While ecommerce retailers may see more tangible benefits, Pinterest gives businesses the ability to syndicate content, helping brands to tell their story. 

Find more ways to change the game in retail here>>

Building Digital Relationships

Digital relationships are all-important in the social media sphere. It’s with these relationships that retailers can shape and steer experiences, and reach and engage customers. Retailers are now the architects of the relationships they have with consumers building bridges that help customers make decisions in a retailer’s favor now and over time. Regardless of the format – Pinterest, Facebook, website – creating direct, digital relationships is the ultimate strategy to achieve the ultimate results whether they be increased traffic or higher profits.

Look out for our next series on solving retail problems with retail sciences.

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