Wednesday, 23 July 2014

How Social Media Evolved as a Sales Channel

Over the past few years, major retailers have capitalized on the popularity of social media to increase brand awareness.  Inevitably, these retailers began to also treat their social media pages as direct sales channels in what has become known as social selling.

Of course, the major players of retail have the resources to devote entire infantries to managing the multitude of social networks now available, but small to mid-sized retailers can match the success of their larger counterparts with some simple best practices, even if they lack the labor force to forge a Twitter Team.

The evolution of social media as a sales channel has become the norm, and retailers need to stay in front of their customers by continuously engaging at their level.  Social media efforts will not only build brand awareness, but will facilitate that sense of community and engage shoppers, resulting with higher retention and increased sales, which is the ultimate goal.

Direct Sales

By 2015, about half of all web transactions will occur through social media, which translates to an estimated $30 billion in sales, according to projections by the marketing firm Vocus.  Yet, the same analysis says that of the 40 million business-related fan pages on Facebook, only 17% have the capacity to sell directly through this popular social media channel.

For smaller retailers, having to manually update Facebook on a regular basis let alone multiple social media accounts can take hours and thus discourage them from ever delving into the social selling realm.  But many of today’s  retail management systems and  ecommerce platforms now include integrations to major social media sites such as Facebook, Twitter and Pinterest, making it possible for small to mid-sized retailers to upload product images, descriptions and relevant links to multiple social media channels with just a few mouse clicks.  Selling directly through social media may not surpass the volumes sold through more traditional channels such as a brick and mortar stores or E-Commerce sites, but it can certainly influence purchasing decisions in those other venues through a process called channel-hopping.

Indirect Sales

A social sale will not always end on Facebook or Twitter, but a sale can frequently start there.  A link to a product on a social media site will often plant a seed in the mind of the consumer.  From there, they may turn to an E-Commerce site to conduct more research and ultimately finalize the purchase in a brick and mortar location.  In such a scenario, when the consumer “hops” from channel to channel before finalizing the purchase, does any single channel deserve full credit for the sale?  A recent study of cross-channel shopping habits revealed that consumers will complete about 60% of the traditional sales process before reaching out to a sales representative, no matter what the price point.  In other words, customers are often shopping without the retailer being aware of it.  Much of that shopping takes place right on a retailer’s social media page.

Social SEO

Social media links now factor into the algorithm used by Google to rank its organic search results, according to an article published by Entrepreneur.  Sharing links on highly ranked social media sites, such as Facebook, Twitter and Pinterest, can actually help boost the search rating of an individual E-Commerce site.  Retailers that publish relevant blogs on their E-Commerce sites have a considerable advantage when it comes to SEO.  By blogging and adding fresh content regularly, retailers can exponentially increase the number of indexed pages that are “crawled” by the major search engines.

Extend the CRM

Savvy retailers not only use their social media pages as sales funnels, but also as tools to manage customer relationships.  In that way, social media channels also serve as valuable extensions to CRM functions.  Through social networks, retailers can post news about upcoming discounts, sales events and other promotions, but also provide direct customer service.  While the major retailers can afford to dedicate teams of employees to field these inquiries, smaller retailers can utilize something as simple as an email notification to manage communications through social networks.

Speak, but Also Listen

Much of social media focuses on talking, but rarely stresses the value of listening.  A retailer’s social user base can often provide valuable insights into emerging trends, since they will likely represent part of their market.  A survey conducted by Deloitte revealed that 65% of executives who responded use social media to understand shifts in their market.

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