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Why are retailers getting social media promotions so wrong?

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6th Jul 2014
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Ten years ago, if you approached the CEO of a leading retailer and said you need to organise your social media presence they would of either thought you mad or asked what social media was.

Believe it or not Facebook, the biggest social network has been around for ten years now. Social media has been an interesting phenomenon in the retail space, it seems everyone is doing it, but few retailers are seeing real change or results from it. It seems that after it’s initial hype, many retailers are ready to give up on social media as a channel for sales. Before retailers give up completely, they should know that there are new technologies on the horizon that might make social profitable in it’s second decade.

Social advertising

Before you launch a social advertising program you want to make sure you are targeting the right customers. As with most advertising programs, social ads can be very expensive. Some retailers have found that they are paying for clicks that are bringing existing customers back to the site, rather than acquiring new customers, and some customers that come in through social can sometimes turn out to be highly unprofitable, for example because they return products a lot. Most social networks now have advanced features like ‘custom audiences’ and ‘lookalike targeting’.

Custom audiences make it possible to upload a list of your existing customers to Facebook and suppress them from the advertising campaign since those customers can be reached via other channels like email. At the same time, if customers have opted out of email communications, the custom audience feature of social media networks may be the only way to reach these customers. Of course any custom audience campaign is only as good as the underlying customer data that you feed the social network. This means that retailers must have a very good customer database.  

Social targeting is another advanced feature of social media. Facebook allows retailers to run ‘lookalike’ campaigns. A retailer can feed Facebook a list of its best, most profitable customers, and ask it to find customers that are just like those VIP customers. For example, they might be looking to sell a batch of dresses, so give Facebook a list of all customers who have bought dresses in the past and Facebook will find these customers as well as ‘others just like them’. In these cases, you don’t even need to specify a demographic or geo-location.

Content marketing

In an age where consumers are becoming more and more adverse to blatant marketing and advertising, marketing messages disguised in information have become increasingly commonplace. Some retailers even go as far as viewing themselves as content companies, with the CEO taking the title of chief editor.

Homebase, the home improvement retailer has recently been sharing barbecue recipes over Twitter. As a seller of barbecues, Homebase are using social media to promote the idea of a Barbeque, without explicitly stating they sell them. This is great, but why not specifically target barbecue lovers with this content. Through social media, retailers can see a selection of peoples likes and dislikes. This information allows retailers to start to create a customer profile and save time and money by only targeting relevant groups of people.

Twitter, Facebook and LinkedIn all have ‘sponsored posts’ programs, which allow retailers to promote content – such as barbecue recipes – to the top of the stream of consumers. This form of advertising shows far greater promise than traditional banner-type advertising.

Some fashion retailers are betting on user-generated content to turn a profit. New technologies make it possible to tag items in user posted photos and videos so that friends can buy these items easily. Early results are inconclusive: some retailers report that user generated content increases sales, whereas others worry that having unflattering pictures of everyday models might reduce the appeal of the brand.

Geolocation

With so many consumers regularly using their smartphones whilst out shopping, retailers have the opportunity to track customers as they move round stores, or see when they are nearby and target them with marketing messages. This is being achieved through technology such as Apple’s iBeacon.

iBeacon is already being used by retailers on Regent Street in London, with retailers sending users ad’s as they walk past shops. However, it strikes me that if this is all they plan on doing, they might as well save costs and put up a bigger sign or one with more information on to make their stores location more visible. iBeacon is a fantastic piece of technology, but it must be used as a means to gather data on customer behaviour, and used to push relevant product recommendations and marketing messages.

For example, if data reveals a customer spent 10 minutes near a specific item, the retailer can then place an advertisement or a relevant piece of advertorial on their social media page. Or in Homebase’s case for example, they could use it to target customers who spend time in the barbeque section with further information.

It is clear social media is becoming more and more important to retailers, however it is really important they use it properly. Fixing social for retailers is all about combining social data with big data on existing customers. From my position, helping retail marketers achieve full scale customer relationship personalisation on a daily basis, I am not seeing enough retailers fully encompass social media as a channel in their data and effectively using it in their campaigns.

Thus far, social media has not fulfilled its full potential. I expect geolocation and targeted promotion to rapidly increase in their usage as retailers realise the benefits of combining these systems with their customer data analytics.

Omer Artun is the founder and CEO of predictive analytics company, AgilOne, and a former Best Buy marketing executive. 

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