Social + Mobile: Retail's Dynamic Duo1 Sep, 2011 By: Nicole Urso Reed Response
How social marketing is turning more mobile browsers into buyers.
Exploring the value of social media within the direct response industry may evoke a bit of déjà vu for those who analyzed the value and importance of mobile advertisements just a few years ago.
The mobile debate seemed almost irrelevant after the 2010 holiday season when mobile shoppers used their smartphones to find local discounts, redeem electronic coupons and scan bar codes to compare product prices at competing retailers. Overall holiday sales increased 5.7 percent to $462 billion, according to the National Retail Federation (NRF), surpassing its forecast of 3.3 percent. After a comeback season, the NRF released an updated version of its “Mobile Blueprint,” a guideline for retailers entering the mobile space, to help them emulate mobile strategies that worked so well in 2010.
“Five years ago, it might have been acceptable for an associate to honor the prices on the store’s website for a customer but not the prices on a competitor’s website,” the NRF states in the report. “Today, customers may not even set foot in a retailer’s store if they are able to find what they need to purchase using a mobile device. Even if the customer enters the store, the customer can easily use a mobile device to scan the bar code of an item of interest, find and purchase it at a lower price elsewhere, and leave the item sitting on the store shelf.”
As retailers gear up for another holiday season, many have found that integrating a mobile strategy must also involve an exploration of social media.
“The optimum goal for retailers is to achieve a singular brand experience for customers, regardless of the technology used to interact with that brand,” the report states. “This means that legacy channel-based systems, business processes, and organizational silos must continue to evolve.”
No Strings Attached
Mobile media users are nearing the majority in the U.S., according to comScore’s “State of Mobile Advertising” report in June. At least 45.7 percent — or 106.8 million people — use mobile media; 27.2 percent use SMS but not mobile media, and 27.1 percent use voice only. Mobile media includes accessing rich data, such as browsing the Web, using applications and downloading or streaming video content.
As consumers continue to purchase smartphones and tablets, such as Apple’s iPad and Android devices like the Motorola Xoom, with unlimited data plans, the use of social media escalates simultaneously. comScore’s mobile advertising report states that users who access social media through a mobile device almost every day have grown more than 70 percent from March 2010 to March 2011, and the majority of their time is spent on Facebook.
According to Nielsen, 56 percent of mobile app downloads within a 30-day period during the second quarter were social media apps. Games were the most popular category with 64 percent of downloads; and 26 percent were tied to the shopping/retail category.
Game apps contribute to time spent with social media as they are often played with friends on Facebook. Zynga, the creator of Facebook games such as Farmville, Mafia Wars and Words with Friends, made more than $392 million in virtual goods profits in 2010. Its IPO filing in June states that Facebook is its primary distribution, promotion, marketing and payment platform.
Smart devices are also GPS-enabled, so they become equal parts entertainment and utility when people use them to search and discover new places and tap into their social circles for personalized recommendations. Customer review sites like Yelp! or check-in applications like Foursquare help in the decision-making process while also providing unique marketing opportunities to entice potential customers with local discounts and other incentives.
“The State Of Retailing Online 2011: Marketing, Social and Mobile,” a study by Forrester Research Inc. for Shop.org, shows that 91 percent of retailers have or will have a mobile strategy in place, up from 74 percent a year ago; 72 percent of retailers say they will spend more on social networks this year compared to last year.
The HauteLook Facebook application is able to sync saved customer account and payment information from its website, so once users are logged in on Facebook, they can browse products and complete their purchase using a saved credit card without leaving Facebook.
‘Like’ To Shop
The retail industry is quickly learning how to use social media to build an experience around shopping. Online sample sale websites RueLaLa and Hautelook, for example, host flash sales on their Facebook pages. In order to shop the sale, users must first click their Facebook “Like” button.
“Our first Facebook sale was in November 2010 with beauty brand Carol’s Daughter,” says David Sobie, HauteLook’s vice president of business development. “This event took place simultaneously on both the HauteLook website and on the fan pages of HauteLook and Carol’s Daughter. Our first Facebook-only sale was with Diane Von Furstenberg (DVF) in December 2010. We have also experimented with ‘First Look’ sales, where a select group of products are available for fans to shop on Facebook before the sale opens to the full HauteLook member base.”
The HauteLook Facebook application is able to sync saved customer account and payment information from its website, so once a user is logged in on Facebook, they can browse products and complete their purchase using a saved credit card without leaving Facebook.
“A sale on HauteLook’s website receives more visits than one exclusively on Facebook, which is a function of the size of our member base, which is more than 5 million, vs. our fan base, which is around 300,000,” says Sobie. “As an example, the Botkier event ran exclusively on Facebook for the first day and received over 12,000 visits. On HauteLook, it received about seven times that number.”
HauteLook rewards its members for referring friends. Thousands of users invite their friends to join the website every day. When a new member makes her first purchase, the original referrer gets a $10 credit. Sobie says that the refer-a-friend program is the company’s best source of new members and a core channel of its success.