GETTING THE BUZZ But Not Necessarily The Business

 

Experts say that social media may build brand awareness, but don’t count on it to drive sales.  

 

THERE IS AN INCREASING awareness among apparel brands of the value of establishing a dialogue with consumers. Social media offers them unprecedented opportunities in this area. “While historically, many companies communicated with customers through traditional channels such as direct mail, catalogs, phone calls, newsletters and more recently e-mails, they now have the ability to tap into an entirely new messaging platform, fostering a higher level of customer interaction and engagement than ever before,” says Keith Kochberg, CEO, iMarketing Ltd. For those companies already sold on social media (primarily Facebook, Twitter, and company websites), the reasons they use it range from instant consumer feedback and greater customer engagement to increased brand awareness and loyalty. What we’re not hearing, however, is increased sales. Granted, social media is new and that has made quantifying its impact on sales difficult to assess, other than a noted increase in a company’s Web traffic or response to promotions. “If the goal [of the marketer] is awareness, loyalty, retention and expansion reach, you are more likely to yield your desired return,” says Kochberg. “However if your goal is strictly focused on direct sales, you may be challenged to match the performance of your other media investments.”

 

Market research is usually an expensive and time consuming process for companies trying to satisfy their customers’ demands. Now, with a sample “tweet,” Tory Burch, founder and creative directory of the luxury brand of the same name, is able to get real-time feedback via Twitter. At the National Retail Federation’s (NRF) convention in New York, Burch, who has only been using social media actively for a few months, talked about how during a trip through an airport, she tweeted about how she disliked having to take off her shoes in order to go through airport security. She went on to say that maybe she should design travel socks. What followed, according to Burch, was an immediate response from her followers, excited about the prospect of this new Tory Burch product.

 

The beauty of social media is that while most marketing is one-way, social media is two-way. “What is allows is for brands to actually have a dialogue with their customers,” says Kevin Barenblat, CEO and co-founder of Contest Optional. “Social media humanizes a company and recognizes that customers are people too, not just numbers on a spreadsheet,” adds Paul Chaney, Internet marketing director at Bizzuka and author of The Digital Handshake. Chaney says social media has brought about a return to the ‘corner grocer’ relationship, allowing for direct interaction between retailer and customer, in a relationship that is both unfiltered and somewhat personal. Barenblat also points to the ability of social media to “leverage word of mouth by tying into someone’s friends.” Social media, he says “gives companies or brands the opportunity to reach a much broader audience than traditional media alone.” “Merchants are able to connect more frequently with their customers in an intimate way and also allow fans to connect with one another,” says Lauren Freedman, president of The E-mailing Group. However, the dialogue isn’t always positive and there will be people who feel the need to badmouth a company. Along with these individuals will be other customers with legitimate concerns which should be taken seriously and addressed promptly. The obvious benefit here is the opportunity for a company to improve a product or correct a recurring problem.

 

J. Crew is but one example of an apparel retailer that has been slow to jump onto the social media bandwagon but has certainly made up for lost time. At last count, the company had nearly 185,000 Facebook fans. A recent check of J. Crew’s Facebook wall found mostly adoring comments like, “Best cotton t-shirts EVER.” “My grey suede boots refreshed my entire wardrobe. Love them! The quality is great, too,” and “When does the Spring line come out?” Zara which is closing in on 2 million fans uses its Facebook page to promote its current “Look-book,” announce store openings, and most recently introduce the launch of its iPhone app that allows users to browse the company collection. In 2008, when Gucci realized that 50,000 fans were active on a Gucci Facebook page that the company had nothing to do with, the fashion label set up a company-run page. Today Gucci – the official page, as it’s called, has 529,000 fans who use the site to view the latest collections and have a conversation about the company. Then there’s the Coca-Cola Facebook page with, at last check, more that 4 million visitors. The popular page isn’t even run by the company, prompting Marc Gobe, author of the book Emotional Branding to suggest to an NRF audience that if consumers don’t have a way to express their feelings about a company, they will simply create something on their won. That is evident if one conducts a Google or Yahoo search on a favorite brand. A high percentage of the links that come up are to consumer generated sites.

 

The E-mailing Group, in releasing the results of its first annual community and social media survey revealed retailers and brands taking a “more aggressive” approach toward implementing social media strategies, driven largely by the desire to promote greater customer engagement. Older and well-worn tools like customer reviews, viral videos, and community forums are now taking a back seat to newer channels like Facebook and Twitter. E-mailing Group also found that 86 percent of the companies surveyed were using facebook fan pages and 65 percent were using Twitter publishing. While other means of customer engagement fell into the 50 percent range. Pretty impressive considering the pact that in 2008 Twitter had roughly 1.5 million users. Market research firm, eMarketer, estimates that this year 18 million people will us Twitter at least once a month, while Facebook bases 300 million users world wide. However, when asked which tools result in the greatest increase in sales, 78 of 100 respondents ranked customer service reviews as the most effective. Add to that statistics from Nielsen, which found that a large percentage of those who sign up for Twitter fail to return the following month. Facebook’s retention rate is much higher, however.

 

“The beauty of social media is that it can be very cost effective but I think it’s important to not only measure in cost but also the investment in time on the part of the merchant,” says Freedman. While most agree that social media will never replace a company’s investment in traditional forms of advertising, marketing and communications, Kochberg says there will be companies who “over-invest dollars and resources in social media” as they would with those traditional forms. They first step, he sources you are willing to invest in this relatively new media without seeing an immediate return on that investment. “Since social media is still so new and still evolving along with its various measurement applications. I would anticipate that several rounds of innovation will be needed before marketers can better asses their return on investment for any given social media campaign. While there are basic metrics available through social media, they don’t necessarily directly correlate to increase sales.” “Social media was never intended to preempt other marketing channels, but best serves its purpose when aligned with them in an integrated fashion,” says Chaney. “Each company must take into account their audience to ensure that social media is important to them as not all segments have the same usage of Facebook, Twitter, etc.” adds Freedman.