It’s that time of year again when retailers close the books on back-to-school sales and head into the season that will ultimately determine whether 2015 was a banner year or a bust: the holiday season.
But the latest research from marketing firm eMarketer predicts that the most coveted item on retailers’ and manufacturers’ holiday wish lists this year isn’t the latest smartphone or tablet; rather, it’s a new way to inspire loyalty among customers through social commerce.
eMarketer estimates that this holiday season will be the first real test of social commerce, now that Facebook, Pinterest, Instagram, Twitter and YouTube have all introduced “buy” or “shop now” buttons that make it convenient for consumers to purchase directly from these sites. Specifically, "Because Facebook and Pinterest are the social networks responsible for the most referrals to retailer websites, according to Q2 2015 figures from Merkle|RKG, retailers and manufacturers are most interested in their buy button offerings,” eMarketer said. “They’re adding these buttons to make on-site conversions easier and more trackable, which will in turn make their advertising more valuable to retailers."
Offering his take on these predictions is Al Lalani, chief strategist for Social Annex, a company that delivers customer loyalty by marrying it with social commerce:
How accurate do you think eMarketer will be with its prediction?
Lalani: I mostly agree with eMarketer’s predictions, but would add the caveat that while there are more opportunities than ever to capitalize on social commerce, retailers and CPG [consumer packaged goods] manufacturers have to follow a few best practices to realize the full potential of this new channel.
What is one of the main best practices retailers and CPGs must get right if they expect to make a tangible impact on this holiday season?
Lalani: The first thing they need to do is create a holistic experience across all customer loyalty activities. Whether companies want their customers to write reviews, refer friends, share their latest buying experience on Pinterest, follow them on Twitter or LinkedIn, or like them on Facebook or YouTube, it all needs to be treated as one ubiquitous activity.
To illustrate this point further, consider the following example: After purchasing a digital camera online, you receive an email from the retailer thanking you for your purchase and giving you an update on your loyalty points. Within two minutes you receive a second email asking you to rate your buying experience, followed shortly by a third email encouraging you to share your experience on a particular social media platform. Not long after that, a fourth email arrives in your inbox alerting you that you can earn more loyalty points if you attach a specific hashtag to a picture taken with your new camera. You can see how these well-intentioned gestures could overwhelm — and possibly alienate — loyal customers into keeping their opinions to themselves or worse.
What do you think causes retailers and CPGs to fall in the trap you just mentioned?
Lalani: The above scenario is caused by the myriad of point solutions created by vendors. Retailers and manufacturers must be mindful of this problem and take steps to mitigate it by either investing resources to integrate all their social commerce activities, or outsourcing this service to a third-party that can do this for you. The bottom line is that you need to consider the user experience with your loyalty program just like you do when a customer enters your store or visits your website.
Social Annex's Lalani
What’s another social commerce best practice retailers and CPGs should follow?
Lalani: Aggregate all your social network data. Most retailers and CPGs would agree that their most loyal customers interact with their brand across a variety of social networks, but unfortunately too many companies have only superficial data points on their best advocates. Let’s say, for example, you’re launching a line of new products and you want to get these products in front of your best customers to confirm the product’s true sales potential. Only when you have visibility across all social networks can you capture metrics that allow you to easily identify your strongest influencers who have the highest potential to help you drive your brand forward. Similar to the earlier example, to gain this single pane-of-glass experience you need to either build it yourself or find a company that specializes in this arena.
Any other best practices or pitfalls retailers and CPGs should know about?
Lalani: Provide a consistent omni-channel experience. Another way retailers and manufacturers stifle their social commerce potential is by allowing an inconsistent experience between their online, offline and mobile channels. This can be seen, for example, when a store associate is unable to accept a coupon that was printed from a loyalty email. Or, perhaps the loyalty points displayed on your website aren’t the same as what store associates show in the point-of-sale system.
Social commerce has the potential to make a significant impact on retailers’ and CPGs’ loyalty programs and ultimately their bottom lines this holiday season. In fact, we’ve seen firsthand companies experience a 20 percent to 30 percent increase in repeat purchase loyalty after enhancing their loyalty programs with social commerce. Without exception, however, each success story avoided the pitfalls outlined above, and was able to bring together multiple disparate social networks to create a unified experience for their customers — and for themselves.