Article

Social shopping: Are we there yet?

Retailers are increasingly turning to social media, but how many have realized its potential?

November 20, 2011

The National Retail Federation, the nation's largest retail trade group, expects winter holiday sales to rise 2.8 percent to $465.6 billion this year. This is higher than the average increase for November and December over the past 10 years. If correct, this would indicate a continued retail recovery that began last year after holiday sales fell the previous two years.

While this is a positive sign that consumer confidence might be returning, it is speculative and retailers still have a lot of work to meet this season's goals. They will have to cultivate loyal customers who are willing to spend their hard-earned dollars. Most of them are now looking to social media for the solution – but how many have realized its full potential?

"Like" and beyond

Brands first started setting up "Fan pages" on Facebook to increase awareness and create an online community. In some cases these were even started by fans of the brand. Coca-Cola, for example, hadn't perceived the importance of doing so, until two fans took the initiative of setting-up a non-official Coca-Cola page on Facebook. With such pages, customers can learn about new products, brand events, current promotions and offers.

But their dialogue often goes only one way, as evidenced by the extremely low engagement rate for well-liked brands. Facebook and other social networks can be much more than a B2C tool; to fully take advantage of social media, it is key to establish a real relationship with the customers with a two-way dialogue.

Let your fans speak

It is actually customers that are now going to create the trends and set the tone, not brands or distributors. The average customer is increasingly becoming the one to decide which products are trending and what is worth buying. They are enjoying – relishing, even – being empowered to create buzz and sing the praises of their favorite products and services, therefore driving sales vs. being passive consumers that have historically been on the receiving end of ad campaigns.

The retailers best using social networking are not just talking at but listening to their fans -- and adapting what they're delivering in real-time based on consumer engagement. By doing this, not only do brands collect invaluable information to shape their product and marketing strategy, they also increase their customer's loyalty.

Toward true social shopping

The next step is to enable customers to recommend products to each other and establish a C2C dialogue about the retailer and its products. Stats abound to show that people trust recommendations from friends and family, as opposed to strangers or, even more so, corporations. This is what "social shopping" is all about.

Interestingly though, most of the early successes of social shopping (in particular group-buying websites and club-shopping communities) do not feel that social after all. Customers of these sites are still being told what to buy, rather than being empowered to make their own recommendations. Let's not mistake collective shopping for social shopping.

The differentiator is that it's not because there are other people buying what I'm buying that I'm being "social." The same applies to club shopping: being one in a relatively private group of buyers being told what to shop by a celeb or an expert does not provide for true interaction between customers. The best use of social shopping is letting it happen virally, naturally, and without a "big brother" aspect to it.

But beyond a few forward-thinking brands, very little has been done in the direction of truly social shopping. The social shopping breakthrough has been forecasted many times but I believe has yet to happen fully and completely – it's not a static event, but rather, an evolution. Will it happen soon enough to make this holiday season the first one benchmarked by truly social shopping?

Nathalie Gaveau is the founder of the social shopping application Shopcade. (Photo by Suedehead.)