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Dec 02, 2008

How Retailers Can Benefit From Social Media

PrintHow Retailers Can Benefit From Social Media  

By Adam Weinroth
Shopping is an inherently social activity. Why, for instance, do people go to the mall? To buy things, of course. But also to walk around, meet friends, people-watch and socialize.

By contrast, shopping on the Internet has been a lonely and solitary experience, which may explain why the average e-commerce site has a paltry 3-percent conversion rate. That means 97 percent of people who go to an online retailer in search of a product never buy what they're looking for.

However, for some retailers, social media is proving to be a valuable tool for engaging consumers, driving sales and building customer loyalty like never before. By adding social media content and capabilities to their sites -- including ratings, reviews, recommendations, blogs, photo galleries and forums -- retailers are transforming their Web properties into online destinations with vibrant communities.

With social media, online shopping is no longer a completely individual endeavor that takes place in a vacuum. Instead, it's a compelling content experience that invites customers to play an active role and commune with others along the way.

Following are a handful of illustrative scenarios where social interaction is particularly well suited to enhance or accelerate the consumer's purchase journey. These scenarios are by no means comprehensive, but should give you a good sense of the virtually limitless opportunities to apply social interaction to a variety of online shopping experiences.

Vast Selection
Each and every visit to Whole Foods, I have a ritual of stopping by the cheese section to see what's new and potentially pick up a new variety worth trying. With hundreds of cheese makes and models to choose from, I always end up looking for a recommendation from the patient Whole Foods team member behind the counter, whom I affectionately refer to as my cheese dealer.

It's common to see this same type of interaction occurring throughout the store -- shoppers and employees chatting and trying to find just the right kind of seasoning or wine or chips from a selection of hundreds of SKUs. Whole Foods wanted to extend that same helpful, friendly online experience by allowing shoppers to easily interact with employees and each other, just as they do in the store.

To do so, Whole Foods created a collection of community forums covering everything from products and recipes to cooking education and food safety. Whole Foods also leverages blogs, enhanced by video and audio podcasts, to alert customers to topical issues like last summer's tomato concerns, as well as sharing the inside scoop on new products, product changes and telling the stories of the people who make the products -- to help customers make smart choices based on factors other than what's on the label.

With more consumer choice than ever before, it makes sense that customers would look to staff and to each other to help narrow the field and find the perfect product to suit their particular needs.

Solution Building
Increasingly, shopping is fueled by a need to solve a problem or complete a project. Take car stereos, for example. While a head unit will be important, I'll also want to make sure I have an appropriately powered amplifier, the right speakers and a massive subwoofer that leaves no question about how much junk is in my trunk.

Circuit City is a great example of a major retailer effectively leveraging social media tools to help its online shoppers choose the right merchandise to build a whole solution. In Circuit City's integrated forums, knowledgeable staff and experts from the store's Firedog business regularly interact with users and help them determine the right solution for their particular needs. In some ways, these online interactions are even more valuable than in-store experiences, since they are searchable and accessible to the rest of the world -- a very high leverage benefit for both customer service and customer-centric brand building.

In the context of food, solutions often take the form of recipes, another popular feature on the Whole Foods site. But Whole Foods doesn't just post recipes online, it provides the detailed list of ingredients used to make the dish and, of course, the opportunity for visitors to rate and comment on the recipes and individual products. As an added feature, customers can store their favorite recipes in a personalized "recipe box." By helping consumers build or select their own solutions, Whole Foods empowers its online shoppers to quickly form a specific grocery list.

Product Complexity
Purchase decisions for complex products are seldom made in a vacuum. As a somewhat extreme example, consider the last time you bought a car. Would it have been possible for you to make your decision without input from family members, research and reviews, other owners, and conversation with the dealer or seller? Probably not.

In addition to providing editorial reviews, Comcast's Vehix.com empowers consumers with a multi-attribute rating and review framework for depicting their own experiences with the product. While complex purchases like autos take a relatively large amount of research effort on the consumers' part -- from a variety of sources -- research shows that consumers consistently prefer reviews, input and recommendations from others as the most important factor in the purchase decision.

Connecting the Dots
Successful retailers understand that it's vital to turn their Web site into a destination where people can not only shop, but also where they can meet, talk and exchange information about the products they're passionate about. The really good news for retailers is that they don't have to worry about spending time and resources producing the content on their own.

Increasingly, the very best content is being generated by customers themselves, whether it's posting their own reviews and uploading photos and videos, or seeking out new information by asking each other questions. Indeed, consumers love talking about what they're buying and what they're passionate about. It doesn't take much to get customers to share their experiences and provide great content -- in words, photos, videos and more.

By adding social media features to their site, retailers can quickly build a sense of community and, by extension, gain the trust of their fellow consumers. Inviting customers to take part and engage with a broader community not only provides a rich content experience, it fosters long-term trust and loyalty. And it's this all-important trust that drives purchases.

Adam Weinroth is the director of Product Marketing at Pluck, a wholly owned subsidiary of Demand Media. Leading product marketing for Pluck, he plays a central role in formulating the vision, definition and delivery of the company's syndication and publisher software services, including the groundbreaking BlogBurst syndication network and SiteLife Social Media Suite. Adam joined the company in 2005 when Pluck acquired Easyjournal, a community blog publishing platform that Adam founded and grew to more than 100,000 registered users.

Comments? mmoran@gourmetretailer.com







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