Retailers Meet Consumers in Social Realm, Holiday Spending Buzz is Down
Online retailers are flocking to the place on the Internet where a lot of attractive consumers already are: social networks and shopping sites.
These sites offer outlets for dealing with customer issues, disseminating information about the latest deals, building brand awareness and just interacting with consumers.
Still, online retailers are just beginning to tap into the potential that social networks offer, according to Jeffrey Grau, senior analyst at eMarketer and author of a new report on this topic, “Social Commerce on Facebook, Twitter and Retail Sites.”
“While user ratings and reviews are a mature form of social commerce with proven benefits, e-commerce on social media platforms, such as Facebook and Twitter, is in an early stage,” he said. “People are spending more time on social networks and are able to conduct more of their regular activities on these platforms. E-commerce on social networks has barely tapped that potential.”
These retailers are taking initiative and meeting consumers where they enjoy spending their time while on the Internet. Nearly three-quarters of the Internet Retailer Top 500 merchants have a presence on at least one of the major social networks or social shopping sites, according to eMarketer.
On Facebook, 56.8 percent of these Top 500 retailers, or 284, have a presence, while 41.4 percent, or 207, have a place on YouTube.
MySpace has attracted 28.6 percent (143) of these retailers, Twitter has lured 20.4 percent (102), Kaboodle has drawn in 10.4 percent (52), Stylehive has attracted 5.4 percent (27) and ThisNext has lured 3.8 percent (19).
eMarketer notes that a May 2009 Anderson Analytics survey found that across all age brackets, social network users were more likely than the average consumer to make an online purchase.
Social networks are also well-known for being a hotbed of recommendation-sharing, which is confirmed by a study released by Razorfish in July. It found that 2 percent of social network-using respondents said they shared recommendations online daily, 8 percent said every few days, 19 percent said every few weeks, 42 percent said every few months and 29 percent said never.
Despite the growing influence of social networks on e-commerce, the upcoming holiday shopping season may already have a low ceiling on it, according to Nielsen.
The company found that “buzz about Christmas and holiday shopping is down 3% year-over-year.”
Still, consumers are buzzing about gifts that they’ve already bought or are planning on buying in the nearing weeks to come. However, these discussions focus mostly on offline shopping.
“While online shopping has been rising over the last few years, we’re also finding that consumers are using the internet to find the best deals at retail outlets, toy stores and more,” said Maya Swedowsky, associate research director of Nielsen’s online division. “So what happens online, doesn’t always stay online in the new economy where deal hunting is driving buzz.”
Nielsen has observed two key trends recently: parents buzzing about “must-haves” of the holiday season within online communities and growing buzz about gift cards, which are being used by retailers as purchase incentives.
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