When times get tough retailers get social. That’s the main conclusion of Shop.org’s eHoliday Study, conducted by BIGresearch. It says continued economic uncertainty will bring changes in retail marketing and promotions this holiday season.
It says that “with an understanding that many of today’s shoppers use Facebook and Twitter regularly, and because these tools are more cost-effective than traditional advertising, 47.1 percent of retailers surveyed will be increasing their use of social media this holiday season.” More than half of retailers said they have added or improved their Facebook page (60.3%) and Twitter pages (58.7%) this year, while two-thirds (65.6%) have added or enhanced blogs and RSS feeds. In addition, to provide consumers with an extra incentive to start shopping, one-third of retailers (34.3%) say they will offer holiday deals earlier this year.
A quick survey of what’s online currently supports the research. Many brick-and mortar retailers have stepped up their presence on social sites, not just graphically, but their offers. Macy’s for example, has more than 130,000 Facebook fans with exclusive discounts, a gift area, and a charity donation sub-page. Urban Outfitters is promoting in-store events at different stores (such as live music performance at its Baltimore store). Although it aims at the more socially connected 18-24 demo, it only has 80,000 fans while Urban Outfitters UK has over 130,000.
The commitment to social media shows that retailers have embraced the low cost and high customer value of community.
“Retailers know that times are tough so they have created promotions and incentives to help Americans save money this holiday season,” said Scott Silverman, Executive Director of Shop.org. “From free shipping to Facebook, online retailers are combining new initiatives with tried-and-true tactics to make their companies stand out.”
While online growth is expected to slow this holiday season, it remains a bright spot in retail. According to the survey, 45.8 percent of online retailers expect their holiday sales to increase at least 15 percent over last year, while one-third (33.9%) expect sales to grow up to 14 percent. As a testament to the economy and the maturity of online retail, just one in five online retailers (20.3%) expects sales to be flat or decline.
In addition to a strong focus on sales and free shipping, many online retailers have revamped their websites this holiday season to make it easier for people to shop. According to the survey, many retailers have added or revamped their sites’ shopping cart (45.2%), search capabilities (44.3%), suggested items (42.9%), customer ratings and reviews (40.6%), and featured sale pages (37.1%).
Largely due to the convenience of the web, more than one-fourth of online shoppers (26.7%) said they plan to spend a larger portion of their holiday budget online this year. Reasons behind why people will spend more online range from the ability to shop at all hours of the day (41.9%) to shoppers feeling it is easier to compare prices (34.0%) to Americans’ preference for free shipping (33.1%). Others said they will spend more online because it’s simply more convenient for them (32.4%), they don’t want to fight crowds in stores (24.9%) or because it’s easier to find items (16.7%).
The small percentage of people (5.7%) who plan to spend less of their holiday budget online said that they’ll pull back due to expensive shipping charges (22.8%), because they like to see or handle items before they buy (12.5%) or because they prefer a store experience (10.8%). A fraction of shoppers said they hesitated to shop online due to concerns about security (1.1%), credit card theft (0.6%), privacy (0.1%) or concerns about retailers tracking online activity (0.1%).
Ido Ariel: If you want to see an example of how online retailers allow users to connect with friends on the ecommerce site itself check out www.extremepie.com - the service is provided by the company I co-founded www.barilliance.com