Does Social Media Really Drive Sales?

This past holiday season, retailers leveraged social media tools more heavily than ever. Our 2012 survey of retail CMOs found that the number of retailers integrating social media into their marketing plans continues to proliferate: In 2007, a mere four percent of CMOs surveyed were including social media in their holiday marketing efforts, but by 2012, that number had grown to 86 percent.

Retail executives need to reach consumers on their own turf.

However, it’s important to remember that social media is still relatively new, and many retailers have yet to effectively determine the best ways to engage customers and link their digital campaigns to their bottom lines. Walmart launched an aggressive Black Friday Facebook campaign for Thanksgiving weekend, buying all available retail advertising space on the platform and rolling out 50 million ads to users. But did it work? At this point, it’s difficult to assess. While the ads drove up consumer engagement with the brand, some of the interaction was negative: Some potential customers complained about the unsolicited ads on the company’s Facebook page.

But there were successes as well, with Walmart reporting that its page “likes” increased over the Thanksgiving weekend, and stating that its sales for the period had increased over the previous year (though we won’t see their fourth-quarter earnings results until February).  Nevertheless, it’s unclear how much of that can be attributed to its social media campaign.

But this ambiguity needn’t halt efforts to better leverage social media platforms. It simply indicates that retailers looking to grow sales need to tinker with new ways to acquire and entice customers via these channels.  Retailers should also be thinking about how they use social media year ‘round, not just on high-volume shopping days.  A few lessons from retailers paving the way:

♦ Understand your target demographic.  Sephora launched its “15 Days of Thrills” campaign in May 2012. Sephora tailored its Facebook ads for women aged 18-35 who counted beauty and fashion amongst their Facebook interests and drove engagement by offering exclusives to fans of their page. The retailer’s fan base on Facebook grew, and website traffic increased over the course of the campaign.

♦ Make the campaign a two-way exchange.  Nike’s 2012 “Make it Count” campaign rested heavily on direct engagement with the consumer and fostering conversation. In the process, they built brand loyalty. The campaign encouraged Twitter users to share their stories about fitness goals and achievements throughout the year, personalizing the experience and capitalizing on holiday enthusiasm heading into 2012. Nike ultimately sought to keep the consumer coming back long after the initial motivation of a New Year’s resolution had faded.

♦ Consider platforms besides Facebook and Twitter.  While these two platforms represent the most popular social media sites, others may present opportunities to reach customers you might have otherwise missed.  Whole Foods, for example, has made it a point to engage users on Pinterest. The growing platform provides them the opportunity to share their products visually and target the niche interests of Pinterest users who associate with the brand and lifestyle Whole Foods promises.

Though we’ve just begun to see how innovations in social media retail marketing are affecting retailers’ overall sales, it’s clearly driving consumer engagement and opening up new avenues for reaching customers.

How are you using social media in 2013?