Report: How can social media increase online retail sales?

As part of a study of nearly 10,000 visitors to the Top 40 e-retail websites in the UK, ForeSee Results analysed how the different elements of a shopper’s interactions with a company (including via social media) impact their loyalty, as well as intent to purchase and recommend.

Key findings include:

69 percent of online shoppers use social media sites like Facebook, Twitter and YouTube.  Of those, 37 percent have elected to “friend”, “follow” or “subscribe” to a retailer.

56 percent of online shoppers frequent Facebook, making it, by far, the best place to reach shoppers in the UK - both because it’s where they already are, and it’s where they want to hear from retailers.

54 percent of respondents who “friend” or “follow” companies through social media do so in order to learn about products.  Not far behind, 40 percent of users do it to learn about special deals and options. Only six percent use social media primarily for customer support.

The report indicates that UK shoppers are actually choosing to engage in relationships with retailers on social sites.  However, it should be noted that almost three-fourths (74 percent) of online shoppers who interact with companies on social media sites “friend” or “follow” fewer than five companies.

Retailers, the majority of customers are giving very few of you their ear.  Therefore, you need to do your part in maintaining these relationships with the kind of content and engagement these customers want and deserve.

There is a payoff to these relationships.  Site visitors who also interact with a company on a social media site are more satisfied, more committed to the brand, and more likely to make future purchases from that company.  This is a bit of a chicken-and-egg phenomenon. It is likely that the customers who are more satisfied and loyal to begin with are the ones who will friend us on Facebook or subscribe to our YouTube channels.  However, research shows that when retailers provide rewarding social media experiences, our customers become even more satisfied and loyal.

In other words, it’s a cycle.  Our most loyal customers are likely to reach out to us on social media, but it’s how we interact with them once there that fosters greater loyalty and the likelihood to buy from us in the future.

Where It’s At: Facebook

In terms of pure usage, more than half of all online shoppers in the UK frequent Facebook, while almost one-third of shoppers say they don’t use any social networking sites; slightly more than one-quarter visit YouTube.  Facebook’s dominance is even more apparent when we narrow our focus to shoppers who visit social sites regularly.  Among online shoppers who engage in social media, more than 80 percent are using Facebook.

Figure 2.                                                          Figure 3.

However, an unofficial look at the Facebook pages of the Top 100 online retailers (by sales volume, according to Internet Retailer) reveals that one-quarter do not have any formal Facebook presence and another quarter have fewer than 10,000 fans.  In other words, half of the top online retailers have a minimal to nonexistent Facebook presence - and these are the top retailers!  Imagine how the Top 500, Top 1000 or Top 5000 fare.

What’s your next step?  Get a Facebook page, be smart about the content, and give people what they want. Make sure you have someone to monitor it and post good, timely information.  Promote it to your most loyal customers through your regular communications venues (emails, ads, stores, coupons, etc.). Use your Facebook page to post promotions and product information.

I’m making it sound simpler than it really is.  There are a lot of ins and outs to social media strategy, and the right formula will differ for each company.  But for the retailers who have a poor to middling presence on Facebook, it’s a good place to start while you figure out how social media plays into your global brand strategy.

Here’s a truly revolutionary idea: don’t listen to all of my ideas and opinions about what your customers and prospects want based only on a study of more than 10,000 online shoppers of 40 of the biggest online retailers.  It’s a good start, but find out from your customers what they want.  There’s a lot about social media and online marketing initiatives that is really hard to figure out, but asking customers what they want from you is a great way to begin.

About the author

As a recognised expert in e-commerce with more than 10 years of executive-level experience at Borders and Tower Records, Kevin Ertell leads ForeSee Results’ growth in the retail industry as Vice President of Retail Strategy. Kevin has been a featured speaker at numerous e-retail conferences such as Shop.org, eTail, and Internet Retailer.

About the Research Methodology

The social media findings reported in this paper are based on a survey of over 10,000 visitors to the top 40 e-retail websites (determined according to sales revenue as reported by Internet Retailer’s 2009 Top 500 Guide). Survey responses were collected by FGI Research’s Smart Panel. The study measured satisfaction among shoppers who visited the site, regardless of whether or not they ultimately executed a purchase online, providing insight into the performance of retail websites as research and purchase channels. ForeSee Results used a patented, scientific methodology developed at the University of Michigan to determine the scores. The methodology used by ForeSee Results is the national standard for customer satisfaction in countries around the world and has been proven to have a direct link with stock prices and other measures of financial performance.

About ForeSee Results

As the leader in online customer satisfaction measurement, ForeSee Results captures and analyses online voice of customer data to help organisations increase sales, loyalty, recommendations and website value. Using the methodology of the American Customer Satisfaction Index (ACSI), ForeSee Results identifies the improvements to websites and other online initiatives with the greatest ROI. With more than 43 million survey responses collected to date and benchmarks across dozens of industries, ForeSee Results offers unparalleled expertise in customer satisfaction measurement and management. ForeSee Results works with more than 110 retail websites.

www.ForeSeeResults.com

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