Social networking websites are no longer just advertisement boards for retailers; they are fast emerging as drivers of growth for both online and brick-and-mortar stores.
"About a quarter of our business sales and growth today are dependent upon social networking sites," said Manav Narula, general manager, marketing, at Fashionandyou.com. "By the first quarter 2015, we aim to achieve 30% sales from social platforms." The company's strategy to reach out to loyal fans first with special offers has increased the interaction on the website by 10%, Narula added.
With people increasingly taking to social networking platformsnearly 55% of the Internet population is on Facebook today with mobile sharing also picking up at a faster pacebrands have started using fan base, number of website visitors, comments, feedbacks and new launches on social websites as tools to gauge their success.
In the last three months, online food delivery company foodpanda.com has increased traffic to its website by 60% while fashionandyou has managed to log 20% month-on-month growth on a subscriber base of 1.3 million, data from the companies showed.
Similarly, online fashion store Jabong reached the three million subscriber mark last month and is growing at 10% per month. For FabFurnish.com, social networking accounts for around a fifth of the company's overall revenue, the online store said.
The potential of offers going viral among customers is much higher and more economical on Facebook, Instagram and other social sites.
"They help us reach out to a large audience for products and special offers, help build brand image and install more product information by showing product utility in comprehensive ways," explains Vikram Chopra, founder and CEO, Fabfurnish.com. "In short, it works in our favour to make the brand stand out. Word of mouth on social media holds a big impact and we've seen it work great to create a loyal customer base."
The traffic on Fabfurnish has increased 20-25% while its revenue has gone up by 8-12% in the last three months.
"Not only has social media got more entrenched in everyday lives of consumers, there has been an evolution in ways of engaging with it as well. Social media is increasingly influencing and inspiring retail purchases in many more ways with innovations like 'social shopping' etc," says Pragya Singh, associate vice-president, retail & consumer products at Technopak Advisors.
But is it beneficial for e-tailers (physical stores) also?
"Yes, we have been able to reach out to more people and showcase our collections, which generate interest," says Narinder Singh, MD, Numero Uno Clothing Ltd. "We get a lot of enquiries for products, pricing and store location information that helps us direct people to the stores. Customers can also locate our stores on google maps."
According to Singh of Technopak, social media can be tapped by both e-tailers and brick & mortar formats. While it is easier for e-tailers to do so, brick & mortar formats can tap into its potential in the following ways:
-Identify target consumers and their preferred social channels and create buzz to increase in-store traffic
-Encourage social engagement in the store - this will be based on the store and its product category e.g. A retailer used Pinterest fan base to identify popular products, which were then promoted in store
-Incorporate social media into CRM initiatives
Social commerce is in a nascent stage but can be a significant trend going forward. By enabling people to connect where they buy and buy where they connect, shopping and socialising are converging in the online world. Ends
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