Monday, December 3, 2012

Social Media Is Changing The Way Retailers Market

Snail mail is a thing of the past. If you need to get in touch with your friend, you can simply go on Facebook and write them a post on their wall. If you want to invite your friends to a birthday party, you can go on Facebook, create an event and do so from there. With the popularity of Facebook and Twitter constantly increasing, everything is beginning to revolve around these social networking sites. Even retailers who used to largely depend on the usage of snail mail to market, have started to adapt to these changes.

Social Networking Sites Allow More Personal Relationships

Marketing has always been about the customer. However, there have always been limitations on how intimately retailers could connect with their customers. With the help of social networking sites, retailers are able to connect with their customers on a whole new level. In the video below, Dr. Janet Wagner, the associate chair of the marketing department and an associate professor at the Smith School of Business, explains how social media has opened up new doors for marketing:

Social media not only opens up a door for a retailer to customer relationship, but it also opens up a door for customer to customer relationships. The retailer to customer relationship allows the customer feel as if they are a part of the company. They can directly tell the company about things they like and suggest things to improve on. This direct feedback from the customer allows the retailers to fix what they need to in order to make their customers more satisfied. Happier customers = more products sold.

JC Penny launches their Facebook store.
Customers will be able to shop without leaving the
comfort of their own Facebook. 
The customer to customer relationships are called social communities. Within these social communities, customers of the same retailer can communicate and socialize about the retailer's products. For example, Sephora, a beauty retailer, has established a social community called Beauty Talk. There, beauty enthusiasts can go and ask for help, recommend products, or just talk to other people with the same interest as them. Data shows that a Beauty Talk community user spends two and a half times more than the average Sephora customer.

Retailers Have To Adapt To These Changes

Social networking sites have allowed retailers to open up new doors when it comes to Marketing, but in order to do this they have had to adapt. Wagner explains the changes retailers have had to make in the video below:

With the level of competition so high, retailers beginning to use social networking sites is no game. Which is why, like Dr. Wagner stated above, retailers need to hire experts who specialize in social media. These experts need to be able to evaluate the information circulating through these social networking sites and do what is needed to better serve their customers. The amount of competition each retailer has can be clearly seen in this detailed infographic by Campalyst.

Retailers Have Benefited From The Usage Of Social Networking Sites

The power of social networking sites can be ween through this study that found that over 40% of men and over a third of women are more likely to purchase something if their friend recommends it on a social network to them. Retailers have done nothing but benefit from these sites. As a whole, their sales have gone up and their relationship with their customers have become more genuine. Wagner also agrees that the way retailers market has been improved with the usage of social networking sites:

The retailers aren't the only ones who have benefited from the increased usage of social networking sites. The customers have also benefited in that they can now stay updated about promotions and deals going on, submit suggestions directly to the retailer, and socialize with other customers who have similar interests.

Paul Koh, a student at the University of Maryland, College Park, is an avid social network user. Below, he gives his opinion on how social media networks have affected the way retailers market. His response confirms the fact that the marketing advances caused by social media networks have improved the overall quality of the way retailers market.

No comments:

Post a Comment