Social Media Marketing Study Shows Low Impact on Retail Results
A new study about the impact social media marketing has on retail sales shows there is almost no impact. Will entrepreneurs who have shifted their strategy heavily to providing social media services re-think the marketing plan or try harder?
Forrester Research (add them to your resource library) and GSI Commerce collaborated to analyze data captured from online retailers betwen November 12th and December 20, 2010. Note that this is during peak shopping season when the consumer is hungry for gift and shopping ideas. The report shows that social media rarely leads to direct purchases online. The report says:
-- Social tactics “came alive” during key dates for soft goods. The truth is that social tactics were largely ineffective in driving sales.
-- The research found that email marketing and search advertising were much more effective vehicles for turning online browsers into buyers.
-- Most consumers purchased online following some web marketing influence.
-- Nearly half of purchases followed multiple exposures to web marketing efforts.
-- Display and affiliate marketing also exhibit strong influence in the purchase funnel.
-- Search was significantly less effective during the same time.
“The best analogy is in the South, a lot of people go to church on Sunday,” says Fiona Dias, executive vice president of strategy and marketing for GSI Commerce. “If you go with the theory that you should market where the people are, then you should be running off to market during church services. Facebook has the same analogy. Buying things from retailers is maybe 10th on the list of things they want to do on Facebook.”
Dias says social media outreach is somewhat effective for distributing news about short-term deals. In that case, 5% to 7% of purchases are influenced by social media activity.
What works for online retail business? Research indicates that more traditional online marketing has greater impact, including email marketing and search advertising. As you read the study, it will show how most consumers were exposed to some form of marketing by the retailers BEFORE they made their purchase.
A side note: Guerrilla marketing principles include creating campaigns with multiple touch points and does not rely on any one method as "the silver bullet".
The study shows sales transactions categories broken down as follows:
- 70% in hard goods (i.e. lawnmowers) and 82% in soft goods (i.e. clothing) occurred AFTER the consumers had engaged in some interactive marketing tactic BEFORE the purchase.
- 40% of hard goods transactions and 60% of soft goods transactions on retail website came from email and search.
A point that online advertising does play a role when the consumer is exposed to the ads early in the purchase funnel.
— for instance, display ads are the first touchpoint for 13% of soft goods buyers.
An entrepreneur has hundreds of guerrilla marketing weapons at their disposal. If 90% of the marketing efforts are based on social media tools, the graphs and diagrams in this report will show how to maximize on the opportunity... or reasons to keep it a low priority.