A Brief Recap: Previously in part one, we discussed two important consumer trends that marketers should focus on in 2012, i.e. the growing use of mobile devices and smartphones by the social consumer and the importance of user-generated content. Our research shows that there are two more key consumer trends that brands need to keep in mind while designing their social media marketing strategies for 2012; the social consumer’s quest for discounts and bargains and one demographic that is expected to drive the most e-commerce spending, women.

Women to Drive More E-Commerce Spending

While brands have always understood the importance of the female demographic (Read our previous blog on ‘The Importance of Marketing to Women Online‘ for more), recent studies indicate that women will soon overtake men as far as being social media-savvy, staying connected and shopping online are considered. According to recent research by Zmags, today’s new connected customer is a ‘40 something woman (mean age), with a mean household income of $63,000, is super-social, and carries multiple internet connected devices, besides owning a PC or laptop. This means, brands and online marketers can expect to see more of this demographic researching their products, exchanging reviews and clicking on the ‘buy now’ option on their websites and social media pages.

• ‘40 Something Female Shoppers? While the popular assumption is that the average connected customers are millennials, recent studies indicate otherwise. There are several factors that support ZMags’ study: a) women in this age bracket are better financially empowered than their younger counterparts, who have either just started their careers or have personal financial commitments b) less impulsive and more interested in comparing prices and exchanging opinions, the ‘40 something female customer is likely to invest more time in researching products before actually buying them online c) going by Microsoft Tag’s 2011 study, women in the 35-54 (approximate) age bracket are most active in group mobile socialization; which means, the likelihood of this demographic exchanging information, comparing prices or simply checking out a new product online is high.
• No More Gender Stereotypes: While apparel and cosmetics will continue to be the top category for female shoppers, the stereotypical divide that dictates what men are most likely to buy and what women will look for online has blurred over the last few years. Traditionally male-dominated categories such as cars and electronics have seen a rapid increase in female customers in recent times. With the ‘40 something woman changing her role from that of a homemaker to a buyer of luxury products and gadgets, going forward, brands will need to keep this affluent, social-savvy demographic in mind while designing their marketing messages.

Bargain Hunting Here to Stay

With daily-deal spending expected to reach 1.7 billion in 2012(U.S Gross revenues) and 3.9 billion in 2015, it is safe to assume that bargain hunting is here to stay. Considering the fact that deals and special offers are among the top reasons why consumers check out a retailer’s social media page or website, this is one crucial area where online retailers must continue to focus on. Let us examine some of the consumer key trends in this space:

• Daily Deal Sites: With daily deal sites like Groupon and LivingSocial gaining momentum last year, we expect to see more of the coupon collector crowd throng these sites in 2012 as well. For retailers and brands, this could be the best opportunity to market those slow-moving products and give their sales charts a shot-in-the-arm.
• The Motives of Coupons Collectors Will Change: Although shoppers will still seek out coupons to save money, coupon hunting, especially over the last few months, has become more of a sport. Trendwatching notes that the motives of coupon collectors are changing, with shoppers using deal aggregators like Groupon for “the thrill, the pursuit, the control, the perceived smartness, and thus a sense of status, too.” With bargain hunting set to be a status symbol, the pressure on retailers and brands to offer more discounts, deals and offers will increase.
• Facebook Coupons and Special Offers: With the bargain hunters looking for the best deals and offers on daily deal sites, it was not surprising to see Facebook entering this space as well. Facebook will soon approach the 1 billion milestone; and if the social networking giant’s decision to test out Coupon Posts and Ads on a select group of existing advertisers works, then we can expect to see a) increased engagement between brands and their consumers and b) a substantial rise in users who want to check out what brands have to offer on their Facebook pages. Several retailers are already ahead of the game and have welcomed the New Year by offering discounts and deals on various products on their Facebook pages.

Conclusion

If 2011 saw the strengthening of the brand-customer relationship, 2012 is expected to be the year when this relationship is taken to the next level. Our research highlights four key consumer trends that online marketers will need to focus on in 2012; one of these will be the increased use of mobile internet for everything from browsing social media sites to downloading coupons and shopping for products. With mobile internet usage expected to overtake PCs and laptops in the next few months, retailers and online marketers can expect to see an increase in ‘consumers-on-the-go’. Meanwhile, recent studies have established that the social consumer no longer wants to be at the receiving end of marketing messages. In 2011, we saw consumers interact and engage with brands for customer support, to post queries and make their opinions heard. In 2012, consumers will redefine this ‘engagement’ by significantly contributing to marketing content.

The e-commerce space, in 2012, is expected to have a large number of active female customers, specifically the ‘40 something age bracket. With women in this age group better economically empowered, less tied down by personal and financial constraints and more tech-savvy than before, brands need to design their marketing messages keeping this demographic in mind. One key consumer trend that has been consistent over the years is the bargain hunting phenomenon. While coupon collectors and bargain hunters show no signs of slowing down, the reasons why they throng daily deal sites are gradually changing. Unlike before, when the quest for coupons and discounts was motivated by the need to save money, today’s social consumers consider bargain hunting to be more of a status symbol.

The dynamism of the social media landscape and the constantly changing tastes of the social consumer indicate that brands have to be on their toes all the time. While marketers are unsure about what to expect from their consumers, the trends discussed above attempt to provide a glimpse into the mindset of the social consumer, helping brands better design campaigns and create marketing messages with more confidence than before.

• What To Expect From The Social Consumer In 2012: Part One (1)
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2012: The Year of the Social Consumer

From Papa Johns tweeting a formal apology to an annoyed customer, to Nike’s impressive user-generated campaign, ‘The Chosen‘, 2011 was a year when the social consumer made her presence felt. Rather than being mere recipients of marketing messages, today’s consumers are engaged with brands, contribute to campaigns and exchange product information; an indication that people’s buying behavior has evolved over the years. While the likes of Nike, Dell and Coca-Cola have worked towards strengthening the brand-customer relationship, there are a few others who are yet to understand who their customers are, what their needs are and how best these can be met. According to research conducted by the Pivot team, in partnership with the Hudson Group:

• 23% companies felt that they didn’t know their customers as well as they should.
• 76.8% were confident about their understanding of the social consumer.

Although the above research indicates that some brands need to work towards getting to know their customers better, the fact that a majority of companies actually invested time and resources for the betterment of their relationship with customers shows that 2011 was a year when a) social media advanced rapidly as a communication channel b) the brand-customer relationship was cemented further c) marketers made themselves available for customers via networking channels d) customers increasingly depended on social CRM for assistance.

As far as 2011 is concerned, we would say it was mixed bag with its fair share of success stories as well as instances where marketers could have better engaged with their customers. That was then; as far as predicting exactly how 2012 will span out, the major challenge for marketers is keeping up with ever-changing tastes of the social consumer and the dynamism of the digital space. Let us look at how online marketers are prepping up for, what we call, ‘the year of the social consumer‘:

• Retaining and engaging with customers continues to be one of the biggest challenges for marketers; which is why, in 2012 businesses will develop more effective customer loyalty strategies (Loyalty 360).
• Brands will focus more on customer loyalty and retention vs. acquiring more customers (Protiviti).
• Increased focus on daily-deals sites.
• Following the launch of Google+ Pages for Business, brands are expected to target the growing user base of this channel in 2012.

The relationship between brands and customers and the level of engagement is likely to affect how consumers shop online and their loyalty towards a brand. For online marketers, having a better understanding of consumer trends means better chances at success, improved returns and building up of a loyal customer base. In a two part series, the Brand Monitor Team has researched and unearthed some key consumer trends, which will give marketers an idea of what they can expect from the social consumer in 2012.

Social Consumers and their Relationship with Mobile Devices

In August 2011, eMarketer predicted that almost 100 million consumers in the U.S. will be on the mobile web by the end of the year, with this number expected to increase to nearly 113 million by 2012. The rapid expansion in the smartphone and mobile internet market is a testimony to the fact that the modern consumer is time-strapped, constantly on the move and expects instant access to information. This means online retailers and marketers can expect to see an exponential increase in mobile usage by their consumers in 2012. Let us look at what social consumers are likely to use their mobile devices and smartphones for:

• Mobile Coupons: The number of consumers redeeming mobile coupons will jump to 28.7 million, or 13.5%, in 2012, says a study by eMarketer. According to Noah Elkin, principal analyst at the research firm, the growth in use of mobile is being driven by a number of factors, including the fast-growing adoption of smartphones by consumers and subsequent increased use of the mobile web and mobile apps. This means, in 2012 and going forward, retailers will have to increase focus on making mobile coupons available to consumers via various apps and m-commerce sites.
• Change in Mode of Retail Payments: The launch of Google Wallet (in the USA) in the second half of 2011 signaled a shift in the method of retail payments. With Forrester predicting that by 2016 consumers may say goodbye to their traditional wallets and use their handsets for transactions, retailers need to keep in mind the impact of mobile wallets as they design their customer loyalty programs. Starbucks, for instance, allows consumers to make mobile payments through the use of a mobile app. The Starbucks mobile app is very popular on both Blackberry and iOS.
• M-Commerce & Networking Activities: In 2012, we expect to see significant growth in the m-commerce space as well as an increase in social networking via mobile and smartphones. From purchasing directly via Facebook, to posting product reviews on social networks and using location based services to find stores, today’s consumer prefers using mobile devices over PCs and laptops. With mobile internet usage expected to soon overtake desktop internet usage, the future of m-commerce sure looks optimistic.

User-Generated Content

Our research on what influences purchase decisions online showed that word-of-mouth and consumer reviews and recommendations have played a significant role in the e-commerce space in the last few years. User-generated content, which contributed to some winning social media campaigns in 2011, is expected to further gain momentum in 2012. Here’s why we think marketers and brands should focus on user-generated content going forward:

• Consumers Want to Contribute to Marketing Content: With the voice of the social consumer set to grow significantly in 2012, we won’t be surprised to see users increasingly contributing to marketing content over the next few months. This is an excellent opportunity for online marketers to convert these social-savvy consumers into ‘brand advocates’, allowing them to be a part of the brand’s promotional strategy. Coca-Cola, for instance, has been ranked number one in social media marketing thanks to user-generated content. The company’s “Happiness is…” campaign, launched just after Christmas, features plenty of user-generated content on Tumblr.
• Reviews & Recommendations Are Highly Valued: Consumers greatly value product recommendations and reviews posted by other shoppers and expect brands to feature these on their social media pages and websites. From YouTube videos demonstrating how to use a product, to consumers posting either positive or negative reviews, content that comes from other customers is much more valued than content that is posted by brands themselves. As the year progresses, we expect to see increased dependence on user-generated content in the form of reviews and recommendations. For marketers, the task ahead lies in harnessing the concept of ’social proof’ to influence prospective customers.

Wait…There’s More…

While user-generated content will be the next big thing in the online marketing space this year, another area that marketers need to focus on will be the growing use of mobile devices and smartphones by consumers. Our research on consumer trends in 2012 indicates that brands will also have to keep in mind an important, rapidly growing demographic while designing their online marketing strategies; i.e. women. In addition to this, part two of this series will also explore the bargain hunting trend, and will find out if this will continue to influence consumers’ purchasing behavior in 2012.

• What To Expect From The Social Consumer In 2012: Part Two (0)
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In part one of Brand Monitor’s ‘E-Commerce and the Social Consumer: Making Online Shopping Hassle-Free‘ series, we discussed two of the most common hurdles that online customers faced and what retailers can do to make online shopping an enjoyable and problem-free experience. While insufficient information on brands’ websites, high shipping costs, along with the worry of the product being damaged, are among the biggest reasons that discouraged people from selecting the ‘buy now’ option, our research highlights two other factors that can deter prospective shoppers from making a purchase via digital and social media channels. In part two, we will focus on how brands can provide better after-sales support and service to customers and the importance of offers and deals and how these can convert prospective customers to loyal shoppers.

Resolving Common Consumer Woes: Part Two

Poor After-Sales and Customer Support:

Approachability and the constant availability of sales persons and attendants give brick-and-mortar stores that enviable edge over e-stores. Although there has been significant progress as far as social customer support by brands is concerned, customers are still daunted by questions like ‘I have a problem, who do I contact?’ or ‘the product purchased online isn’t up to my expectations, what do I do now?’ According to a recent study (conducted by an Assistant Professor of Communications at New York University for Conversocial), 49% customers said that they would be far less likely to buy a product from a company if they went to their Facebook page and found a bunch of unanswered questions or unresolved complaints from customers. Statistics like these highlight the importance of offering timely and efficient online support and service to customers. Let us look at some ways how retailers can do this:

• Timely Response: Online customer support is not just about being there for the customer, it is more about responding to the customer on time or at the earliest. Here’s a hypothetical situation: i)Customer notifies brand about a problem ii) brand takes time to respond or does not inform the customer that they have taken note iii) confused and frustrated customer takes to social media channels to vent his ire iv) what could have been a small, easily-resolvable issue eventually snowballs. Going by the CMO Council study, customers expect response within 24 hours after they engage with a brand online for support issues. For brands that need more time find solutions, we think a simple ‘we understand your concern and are working on resolving it at the earliest’ response should do the trick.
• Identify Customers in Need of Support: Not all customers will immediately reach out to the brand when faced with a problem. It is not uncommon to see customers talking about issues or asking for assistance by posting an open question on the web. In such cases, it would be wise to identify these customers by using social media monitoring tools like Brand Monitor, listening to conversations concerning your brand and focusing on those which need to be acted upon. Good customer support is resolving issues when customers contact the brand; great customer support is addressing concerns even before asked.
• Twitter is a Great Customer Support Tool: Twitter can be an excellent customer service and support platform. Most customers like the idea of ‘tweeting’ their concerns in a crisp, to-the-point format, using a platform that is public. For dissatisfied customers, using this microblogging site is mainly about getting the brand’s attention and expecting a quick response. One company that offers unparalleled customer service via Twitter is Dell. Check out the @Dellcares handle to know how it’s done.

Where are the Special Offers and Deals?

According to a Nielsen survey, the main reason why people engage with or interact with brands and companies via social media is for special offers and discounts. North American consumers showed the strongest interest in using social media for deals (45%), followed by consumers in Asia-Pacific (34%) and Latin America (33%). Consumers getting onto social media sites with the anticipation of finding discounts and deals are often disappointed when they find none being offered and look for alternatives elsewhere. While offering discounts may translate into additional costs for marketers initially, there are long-term benefits to this. Deals and discounts mean more customers, more customers mean more sales and more sales mean healthy revenues and profits.

• Making Online Shopping a Fun Experience: Why do many people think of online shopping as a dull experience? For consumers used to browsing through traditional stores and checking out the latest sales, the idea of filling up virtual carts may not sound appealing. Offering discounts to customers who ‘like’ a page, or allowing them to download coupons is a great idea to add the fun factor to the online shopping experience and keep them from getting easily bored.
• Giving Consumers a Reason to Loosen Those Purse-Strings: It is a common sight to see consumers thronging traditional stores during those Independence Day or Black-Friday sales. What motivates these coupon-collectors and discount-seekers to brave those long queues is the prospect of saving money, while loading up their shopping carts. While traditional stores have been successful in luring shoppers with special offers and discounts, where e-commerce stores gain the edge is in the absence of billing queues. Yet, consumers who visit a brand’s ‘Shop Now’ section on Facebook sometimes don’t complete their purchase because of lack of discounts. Our suggestion? Featuring offers and discounts at regular intervals gives consumers a good reason to loosen their purse strings.

Conclusion

The inability to physically be able to handle the product and not finding sufficient information are some of the most common reasons that deter online consumers from selecting the ‘buy now’ option. Research shows that some of the more serious reasons included credit card security issues, high shipping costs and poor after sales and customer support. With ‘high shipping costs’ being the number one reason for customers to opt for traditional stores, we expect online retailers to work towards either reducing this or completely obliterating costs associated with the delivery process.

Another area where brick-and-mortar stores win over virtual shopping is the physical presence of sales personnel to answer queries and look into customer complaints. However, as seen in the case of Dell, online customer support has come a long way in terms of timely response, identification of customers in need of assistance and making optimum use of social media platforms as customer support tools. Twitter being the preferred customer support platform currently, both online retailers and customers are likely use this microblogging channel much more than before. From resolving issues, listening to complaints or simply interacting with customers, the next few years will see an increase in use of Twitter as a customer support channel. As for online deals and discounts, brands appear to be working on how they can make the virtual shopping experience more fun by increasing the number of special offers and allowing shoppers to download coupons. According to Jeffrey Grau, eMarketer principal analyst, daily deal sites like Groupon are expected to fuel substantial growth in the next five years.

The time-strapped modern consumer is social-savvy and willing to shop online. For brands, this means tremendous opportunity to up those revenues and send the sales charts soaring. The one thing that brands need to keep in mind before venturing into this space is that there’s more to online marketing than fancy promotions and sales talk; converting prospective customers into loyal shoppers greatly depends on how much effort marketers put in towards making online shopping a hassle-free process.

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Keeping up with the Social-Savvy Consumer

The ever-changing taste of the social consumer, along with the dynamism of the social media space, sometimes makes it difficult for online retailers to keep up. The online buying process has undergone some radical changes over the last few years. The modern shopper a) is greatly influenced by recommendations, reviews and price-comparisons posted on social media sites b) uses location-based services to find brick-and-mortar stores c) is short on time and prefers the convenience of shopping online instead of spending hours in billing queues and d) favors the choice online stores have to offer as opposed to the limited variety of products in traditional stores. Going by eMarketer’s 2011 study, by 2015, 170.3 million people, or 76.3% of the online population, will make a purchase on the web. While the figures sound optimistic, online shoppers presently face what is known as the ‘abandoned shopping cart’ syndrome. Research by the Brand Monitor team unveiled some of the typical reasons why people are hesitant to loosen their purse strings as far as purchasing online is concerned:

• Inability to browse through stores and physically try-on and purchase products. For many shoppers, the prospect of clicking on products and adding them to their carts is considered to be a dull experience.
• People are worried about sharing credit card information and personal details on social media channels and websites.
• Are not sure about the exchange and refund policies.
• Some shoppers are of the opinion that the shipping charges are too high and there are risks of the product being misplaced or damaged.

For online retailers, these may be minor hiccups that can be easily taken care of. However, for some consumers, especially those who are buying something online for the first time, these minor glitches, along with some major ones, are reasons enough to discourage them from filling up their e-shopping carts. In our two part series, we share some tips and suggestions on how brands can make online shopping an enjoyable and a hassle-free experience.

Resolving Common Consumer Woes: Part One

Insufficient Information:

Although the price is great, lack of information can be a major deterrent for prospective customers. According to a survey by Cone, in 2011, 69% shoppers looked for product/service information online before deciding if they should make the purchase. Websites and social media sites that go all out on advertising, without including the necessary information required to complete the purchase, often risk losing their customers mid-way. Here are some symptoms that indicate that your brand’s e-commerce site is in need for a revamp:

• Not Enough Customer Reviews: The fear of negative reviews could be a major reason why some brands are unsure about posting customer reviews on their websites or social media pages. Considering the fact that 90% of people said reviews have an impact on their decision and 60% say they’re the most important factor (PowerReviews and the e-tailing group), we say including customer reviews is a good idea. After all, it is true that people tend to trust the opinions of other shoppers or their friends more than they would trust brands’ opinions and recommendations. What about negative reviews? Simple… let your social customer service team a) engage with the unhappy customer b) try and resolve the issue c) post the responses online and d) make them feel you care.
• What are the Payment Options? It’s not uncommon to see a brands Facebook page or website that is rich in most of the information, yet, does not see the sales charts moving in the expected direction. Although the pricing information and special offers are featured, there are instances where the payment options are relegated to an obscure corner of the website. For time-strapped customers, who have little patience to actually browse through and locate this information, the simpler option would be to move on to your competitor’s website. Does your brand’s ‘Shop Now’ section fall under this category? Perhaps it’s time for a revamp.
• Where are the Product/Service Details? The advantages that brick-and-mortar stores have over online channels are a) the presence of sales personnel to describe the product in detail and b) the convenience of reading the details on the package or manual provided. For online retailers, overcoming this challenge lies in providing extensive details concerning the merchandise, including instructions on how a product may be used. Looking for examples and ideas on how to design that perfect webpage? Check out the ASOS Facebook page, which is complete with all the required information in an easy-to-assimilate and creative format.

The Abandoned Shopping Cart Phenomenon:

Convenience being one of the biggest reasons to shop online, it is important that retailers make the delivery process hassle-free. Shoppers, who have no problem with the prices, fill up their e-carts, only to decide on the last minute to abandon their shopping efforts. Research indicates ‘high shipping costs’ to be the biggest cause of the ‘abandoned shopping cart’ phenomenon:

• High Shipping Costs: A study conducted on Shopping Cart Abandonment by Forrester Research shows that ‘high shipping and handling charges’ was the #1 reason why customers abandoned their shopping carts at the check-out step. While it is not always feasible for brands to lure shoppers with the promise of ‘free-shipping’, there couldn’t be a better way of increasing shoppers’ likelihood of purchasing products online. With e-commerce being all about price and convenience, trimming down shipping costs, or even better, removing them entirely could result in massive increase in sales for retailers. The additional orders gained by brands that offer free-shipping can offset the burden of shouldering the initial costs.
• Damage During the Delivery Process: Remember the recent FedEx video of the delivery man tossing a fragile package over the gate and walking off? The company’s senior vice president of U.S. operations, Matthew Thornton, apologized with a video of his own, preventing the incident from snowballing further. This incident highlights one of the biggest reasons why shoppers would rather go to traditional stores and buy the items themselves, than entrust the responsibility of delivering the goods, ordered online, to someone else. The key to persuading people not to abandon their shopping carts lies in the marketer’s ability to convince buyers that they are capable of delivering the products to the expected standards. We suggest a) engaging with prospective customers during the initial stages of purchase and assuring them of safe delivery and b) highlighting the return policy and/or money-back guarantee (in case of damaged goods) on the website or the brand’s social media page. This feeling of reassurance can go a long way in converting those hesitant prospective customers to loyal shoppers.

Where are the Special Offers? What about After-Sales Support?

The brand’s social media site/webpage includes all the required information and consumers are no longer burdened with high shipping costs; is there more to a comfortable online shopping experience? We say yes. While insufficient information and high shipping costs can be major deterrents, there are other challenges that consumers face while buying online. In the second part of the series, the Brand Monitor research team will discuss how marketers can improve the online shopping experience by providing after-sales support and entice them to buy more by offering discounts and deals on their websites and social media pages.

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A Brief Recap: In the first part of Position²’s ‘Online Marketing for Luxury Brands’ series, we discussed two important aspects of online marketing that prestige brands should focus on; a) social media as a crucial source of information for affluent customers looking for product reviews and information and b) the need to better engage with customers online and what the owners of high-end brands can do to make this possible. Considering how much difference content can make to luxury brands’ sales charts and revenues, we decided to focus on the content aspect in part two. Also featured is a section on contests, deals and offers, where we explore the idea of luxury brands marketing products in the form of special offers via social media sites.

Approaching Social Media Content

While marketers of luxury brands religiously follow the four Ps of marketing (Product, Place, Price and Promotion), there is one crucial C that is sometimes relegated to the background; content. One of the first rules of approaching content that luxury brands need to keep in mind is that they cannot follow the one-size-fits-all approach. The content type for a brand, aimed at the general population, for instance, will be completely different from that for a prestige brand’s social media site or webpage.

• Retaining the ‘Exclusivity’: Contrary to the myth that digital marketing risks luxury brands’ ‘exclusive’ status, online marketing can be an opportunity to actually enhance a brand’s ‘exclusivity’. Prestige brands can make the affluent customer feel ’special’ by smartly tweaking their webpage content. Take a look at the Lexus Drivers exclusive online community webpage. The site allows owners to manage information about their car and provides lifestyle content on their Lexus Magazine, which is available only to Lexus owners. While catering to the needs of their ‘niche’ audience, Lexus simultaneously provides information about the company and its products on their Facebook page; which means the affluent customer is happy, while the general population has nothing to complain about.
• The Power of Storytelling: Although social media pages and websites can be rich sources of information, nothing draws as much traffic to a brand’s site as stories do. Camouflaging unique lifestyle content in the guise of a story not only makes it an interesting read, but also encourages readers to share this content with others, thereby increasing traffic and visibility. The Chanel No.5 ‘Night Train’ video was a huge hit and generated considerable buzz online because of its impressive storytelling.

• Sharing Your Brand’s History: When it comes to prestige brands, the legacy and history associated with the brand increases the sense of being ’special’ among customers of luxury products. In addition to featuring content that includes the necessary details like product information, services provided etc, the affluent audience expects to know more about the company’s rich history. This type of information is not only educational in nature, but also provides audiences with a story about what makes a brand special, which in turn, influences their purchasing decisions.

The Impact of Contests, Discounts and Deals on Exclusivity

Where some luxury brands preferred keeping engagement to a minimum, there were others who felt that deals and offers would affect the brand’s ‘exclusive’ status. What also tilted the argument in their favor was the fact that the affluent crowd did not mind spending those extra dollars for high-end products they desired; which meant, the prospect of winning contests and discounts did not entice them as much as it attracted the general population. This, however, is gradually changing, with makers of luxury products starting to understand that today’s consumer actually looks forward to contests and deals as an exciting way to shop online. According to a November 2010 L2 Think Tank survey, affluent members of Gen Y (ages 19 to 33) cited promotions and offers as the main reason for engaging with brands via social media. The study also showed that women were more likely than men to engage with brands in general and to want to receive offers.

• Creating Buzz and Increasingly Visibility: Contests are a great way to promote new products and no one knows this better than Lexus. The company’s strategy to create online buzz and increase visibility during the launch of their latest hybrid model in 2010 saw Lexus allow their Facebook fans to post a statement about why they should win the one-year lease that was being offered for the model. Not only did this initiative positively impact the Lexus brand name, but also generated exponential online buzz.
• Building Followers: Gucci currently boasts +5,794,000 ‘likes’ on their Facebook page and has +224,000 Twitter followers. For a luxury brand, the numbers are rather good. While not going overboard with deals and contests, the luxury brand’s strategy to build followers and fans was subtle, but impressive. Gucci’s 12 days of Christmas promotion suggested 12 products that consumers could add to their shopping carts over the holiday season. On Facebook, the prestige brand allows fans access to complimentary iTunes downloads of the latest Gucci magazines.
• Members Only: ‘Members only’ sites like Gilt.com and RueLala.com have increased in popularity in the US over the last few years. The biggest USP of these sites is that they allow brands to retain their sense of exclusivity by limiting their sales notifications to members only. For brands looking to keep up with the competition, while protecting their ‘niche’ status, these sites are a definite ‘yes’.

Conclusion

When it comes to online marketing, especially social media, it would be safe to assume that luxury brands are no longer green-behind-the-ears. Although some brands are still worried about losing their ‘exclusive’ tag, the likes of Gucci and Bare Escentuals are proof enough that a smart social media marketing strategy will not only elevate their luxury statuses, but is also a great way of increasing visibility in the online space. As discussed in part one, today’s prestige brands are well aware of the fact that the affluent customer is no longer restricted to the well-off, 40-something. With increased spending power and willingness to shop online, the younger demographic demands attention as the next generation consumer of luxury products. That said, for luxury brands, one of the biggest challenges is standing out in a crowded online marketing space by sporting certain distinguishing qualities that separate them from the non-luxury labels. This is something many brands have successfully overcome by creating lifestyle content and featuring information that keeps the exclusivity intact, at the same time qualifies as compelling and creative. While these signs are encouraging and lay the foundation for luxury brands to explore social media marketing with fewer inhibitions than before, there are instances where brands are still unsure about the uncontrolled nature of social media. We expect this to change over the next few years, with marketers of prestige labels drawing inspiration from the likes of Lexus and Chanel who are now mavens in the online marketing space. Meanwhile, as far as the question of deals and discounts is concerned, luxury brands are wary of going overboard. While the older demographic does not consider deals as one of the reasons to shop via social media sites, this is changing with younger, affluent shoppers entering the e-commerce space.

Despite boarding the online marketing bandwagon a little later than they should have, luxury brands are rapidly integrating social media marketing with their traditional marketing strategies. Going by the success stories and the openness with which some brands are embracing social media, we expect the love-hate relationship between online marketing and high-end brands to change into a strong, inseparable bond.

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Luxury brands, until recently, were hesitant to explore the online marketing space. One of the main reasons for shying away from online, especially social media advertising was the prospect of losing the ‘exclusive’ tag. However, despite arriving a little late to the social media party, prestige brands have more than made-up for the lost time. What gives these ’select few’ the edge over other brands is the one-on-one relationship they share with their consumers. According to a recent study by ThreatMetrix in partnership with the Ponemon Institute, it is this close relationship that establishes the trust between luxury brands and their customers and allows them to succeed in areas where other brands have failed. Further supporting these findings are some interesting examples of prestige brands that have aced online marketing:

• The first luxury brand to launch an F-commerce initiative entirely on the social medium was Oscar de la Renta.
• Bulgari, which thrives on its ‘niche’ status, recently launched a Facebook storefront with jewelry retailing for $12,000 and up.
• The greater part of Burberry’s traffic comes from Facebook, when compared to Google.
• Footwear and handbag brand Jimmy Choo’s creative director and founder Tamara Mellon, decided to draw attention to the label’s first fragrance by launching a new blog, A Day, A Thrill.

PM Digital Research’s analysis on the luxury retail market shows that social media accounts for nearly 10% of traffic to the luxury category, Facebook being the most significant player, with its share ranging from 4% to 10%. Although this may not be much when compared to other channels like ‘Search’ and ‘Shopping’ sites, this figure is nevertheless on its way up.

With a large percentage of high-income shoppers using online media to purchase products currently, it has become a norm for most luxury brands to have a Facebook or Twitter presence. However, simply being present on a horde of networking sites does little to increase traffic or sales. In the first of a two part series, team Position² looks at how engaged these brands really are what influences the affluent customer to buy that expensive something via social media.

What Makes Social Media the Information Goldmine?

For 90% of affluent internet users who regularly shop online, digital media is their number one source of information (Digital Strategies for Luxury Brands for Publicis NY). With most of their prospective customers thronging social media sites for everything from product recommendations to posting reviews, it is not surprising to see previously social media-shy brands making the transition to e-commerce.

• The Impact of Third Party Information Sources: Converting prospective customers to regular shoppers and influencing their online purchasing behavior is largely dictated by third party information sources like customer reviews, discussions and price comparisons. Despite brands’ websites and social media pages featuring all the necessary information, nothing works as well as word-of-mouth recommendations. For luxury brands looking to increase their customer base, it is important to allow customers and visitors to have access to this information.
• How Bare Escentuals Nailed It: Previously, prestige brands were not comfortable about posting user reviews and allowing the general population to view and share this information via social media. However, one company that can serve as an example of how user reviews and information exchange can positively impact their brand’s image online and send the sales charts soaring is Bare Escentuals. The luxury brand invites users to review their products and post their thoughts on their Facebook page. By creating a feeling of being a ‘close-knit family’, Bare Escentuals encouraged users to share photos, stories, even going as far as allowing them to comment on sales via the “Global Family” Facebook tab. Still wondering about letting people in and losing the ‘exclusive tag? Bare Escentuals, boasting+484,000 ‘likes’, should be inspiration enough.

Engaging with the Niche Customer Online

Despite having a social media presence, many brands, until recently, did not allow fans to post on their page(s), restricting communication and leaving no room for engagement. According to L2 Prestige 100 study, 20% of prestige Facebook pages did not allow fans to post on the brand wall. This, however, changed after 15th August 2011 when Facebook made two-way interaction mandatory. In what we can call ‘a leap of faith’, luxury brands today are not only encouraging interaction in the form of user reviews, but are also going that extra mile to strengthen engagement with customers.

• Why Are Luxury Brands Hesitant to Engage Online? The L2 Prestige 100 study ranked L’Occitane #1, followed by Kiehl’s and Korbel in its list of most responsive Facebook brands. While the study certainly shows that prestige brands are better engaged than before, there are some other brands such as Prada, Marc Jacobs and Hugo Boss that have only recently opened up and, in some cases, are still only selling limited items such as accessories. Keeping up with the competition is one of the main reasons why these brands have joined social media sites. Studies show that this hesitancy stems from their worry of losing the coveted ‘exclusive’ statuses, considering the uncontrolled environment of social media.
• Engaging with the Younger Luxury Demographic: Where some brands are testing the waters when it comes to online engagement, there are others who have done their homework and know where their most important customers are. Although fairly new to the social media marketing space, today’s luxury brands understand the importance of reaching out to and engaging with the next generation of luxury customers i.e. the younger demographic. Financially empowered, more open to the idea of online shopping, and willing to connect with brands via social media, it would be unwise to ignore their potential as luxury customers. What we suggest? Listen to what they have to say and understand their needs before attempting to engage with them online.
• Beyond Geographical Boundaries: One of the great things about social media marketing is the power to reach across geographical boundaries and connect with customers from any part of the world. When French skincare line L’Occitane en Provence decided to take brand engagement to the next level by talking to potential customers from different parts of the world, the company decided to launch a social media-driven photo project in July 2011. By asking customers to snap photos of the brand’s Shea Butter Hand Cream against the backdrop of a landmark specific to their town or country, L’Occitane saw social media interaction from consumers in New Jersey, China and Amsterdam, to name a few. Allowing users to upload these photos on L’Occitane regional social media sites such as the U.S. Facebook and Twitter, the Korea Twitter and the Israel Facebook, the skin care company successfully engaged with global consumers and increased the brand’s visibility in the process.

How can luxury brands approach social media content? Will offering discounts and deals tarnish the ‘exclusive’ tag?

Having to choose between holding on to their ‘exclusive status’ and venturing into the unfettered world of social media marketing, luxury brands today are trying to find the middle ground; this they are doing by having a social media presence, but not completely letting go. Our first part of the series covered why prestige brands are hesitant to engage with customers online and how they can make their social media page a rich source of information. In the second and final installment, we will feature tips on how luxury brands can improve their online content and if offering deals and featuring contests is a wise move.

• Online Marketing for Luxury Brands – Simplifying a Complicated Relationship: Part Two (1)
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The debate over the SOPA (Stop Online Piracy Act) bill, introduced in the US House of Representatives on October 26, 2011, by Representative Lamar Smith, has, so far, drawn some interesting reactions. Although the House Judiciary Committee, which held hearings on SOPA on November 16 and December 15, 2011, will only meet on 24th January 2012 after the winter recess, the war of words over SOPA is far from over. Research by the Brand Monitor™ Team at Position² shows how the issue over the controversial act has played out so far:

• One of the earliest reactions came from hacktivist group ‘Anonymous’. The group has warned to hack into and replace the front page of every website they can with a protest page.
• A group of security experts, including Dan Kaminsky and Paul Vixie, wrote a letter to Congress opposing SOPA and PIPA.
• In the initial supporters list was GoDaddy.com; the company openly expressed its decision to back SOPA, drawing considerable flak online. Following the concerted boycott against GoDaddy by anti-SOPA activists and the loss of over 70,000 domains, the company recently announced withdrawal of their support.
• However, this did not guarantee respite for GoDaddy; competitor NameCheap accused the company of intentionally blocking the transfer of domain names.
• 29th December 2011 was declared as ‘Dump GoDaddy’ day.
• GoDaddy wasn’t the only company to face the music over SOPA; Sony, which also supports the act, recently faced threats from Anonymous.
• From internet giants like Google and Yahoo! to industry-experts like Facebook, eBay and Mozilla, the anti-SOPA crowd is of the opinion that SOPA and the PIPA will stifle free speech and destroy the open internet.
• While former U.S. Vice President Al Gore is among the prominent personalities to have recently expressed his apprehension concerning the bill, US Congressman Paul Ryan is in the news for his stand on SOPA. Reddit has, apparently forced the member of the US House of Representatives to publicly announce his decision to no longer support the bill.
• The pro-SOPA crowd includes the likes of Motion Picture Association of America (MPAA), the Recording Industry Association of America (RIAA), ABC television, the Country Music Association and the US Chamber of Commerce among others.
• Although Microsoft pulled some of its direct-but-proxy support for SOPA, the company remains publicly in favor of the PROTECT IP Act.
• Recent developments include the announcement of an “internet blackout” initiated by some big names in the digital space. This is most likely to happen on 23rd January, one day before the House Judiciary Committee is scheduled to meet.

Popular website Reddit.com has announced that it will will blackout its site on Wednesday, January 18 for 12 hours to protest the Stop Online Piracy Act. Wikipedia founder Jimmy Wales has said that he hopes to coordinate with Reddit so that Wikipedia does the same. During that 12 hour period, Reddit’s content will be replaced with “a simple message about how the PIPA/SOPA legislation would shut down sites like reddit, link to resources to learn more, and suggest ways to take action.”

SOPA and the Social Media Buzz

Analysis by Position2 (for the time period between 11th December 2011 and 10th January 2012) shows that conversation volumes initially peaked on 16th December (2,007).

• The gradual peak in buzz after 15th December could be attributed to the SOPA hearing by the House Judiciary Committee on the same day; this subsequently resulted in an increase in the number of people discussing the possibility of the bill being passed and the ramifications of the act.
• Despite the slight dip in conversations after 21st December, volumes rose once again following GoDaddy’s announcement that it no longer supports the anti-piracy bill.
• That said, the highest volumes were registered on 9th January (2,025), followed by 1,981 volumes on the 6th of the same month. Research shows that this spike could be after Al Gore publicly opposed the act, followed by Paul Ryan’s withdrawal of support.

GoDaddy Garners Unwarranted Attention

• While analyzing conversations specifically pertaining to GoDaddy, we were surprised to see how the attention was diverted from the original SOPA issue to a full-fledged boycott against GoDaddy.
• 23rd December 2011 witnessed an exponential increase in volumes (14,303 mentions to be precise!), following GoDaddy’s declaration that they weren’t “for” SOPA.
• Although we expected significant online chatter on 29th December 2011 (Dump GoDaddy Day), the buzz gradually subsided after the company announced that it was now officially among the list of companies that opposed SOPA.

Top Media Volume and Sentiment Breakdown: SOPA

• At 31%, the Twitterians were highly vocal about how they felt about the proposed legislation. Commonly used hashtags included #SOPA,#PIPA, #boycottGoDaddy and #StopSOPA. While the earlier tweets were centered on GoDaddy, recent conversations included tweets on the Reddit blackout scheduled for 18th January 2012.
• Discussion forums also registered considerable volumes, at 29%, followed by blogs at 25%.
• Clearly, Facebook audiences didn’t appear as active in their discussions related to the bill. Of the negligible 6%, most of the posts included links to news feeds related to SOPA and PIPA.
• At 72%, the conversations were mostly neutral in tonality. Further analysis shows that people mostly shared links explaining what exactly the SOPA was all about.
• The negative conversations, at 27%, included posts by the anti-SOPA crowd. Once again, it was GoDaddy that came under severe criticism for their support, followed by Rep. Lamar Smith. There were also several posts describing Microsoft’s support of the Protect IP Act as “disgraceful”.

Top Media Volume and Sentiment Breakdown: GoDaddy

• It was only a matter of time before SOPA became synonymous with GoDaddy. Although the pro-SOPA list included prominent names like Viacom, Time Warner and L’Oreal, it was GoDaddy that experienced maximum backlash, especially on Twitter; the microblogging site accounted for 71% conversations.
• Registering the second highest volumes (19%), discussion forums were abuzz with talks of why GoDaddy users were not ready to forgive the company yet. Reddit.com was among the preferred sites for discussions concerning SOPA and GoDaddy.
• Although 52% of the conversations were neutral in tonality, 47% were negative. While the neutral posts were mostly centered on GoDaddy’s role reversal, the negative ones ranged from blatant criticisms to sarcastic comments on why people should move domains.
• Despite accounting for a negligible 1%, we were curious about the positive comments that people had for GoDaddy. Sifting through the positive posts showed that some people were happy with GoDaddy’s new anti-SOPA stance.

Demographics

Top Country Breakdown

• Unsurprisingly, the maximum buzz, at 90%, was registered in the USA.
• Further breakdown shows that, New York, when compared to other US states, recorded the highest conversations (8,344 posts).

Gender and Age Distribution

• At 85%, the male population appeared more concerned about the possibility of the SOPA bill being passed when compared to women (15%).
• At 34%, the 20-35 demographic discussed the possibility of ‘internet dictatorship’ the most. They called this the government’s conspiracy to control free speech.
• The <20, age group registered the least buzz, at 9%.

Conclusion

While the likes of Microsoft and the Motion Picture Association of America have publicly expressed support of the contentious Stop Online Piracy Act (SOPA), the digital space has been abuzz with anti-SOPA conversations. From the above analysis, it is clear that the online space is divided into the pro-SOPA and the anti-SOPA crowd. Previously in the pro-SOPA list, one company that received the most criticism is GoDaddy. In addition to threats of boycott, GoDaddy lost thousands of domains, cornering the company into withdrawing support and officially changing sides. We are curious to see how Microsoft (a SOPA supporter) will respond to criticisms from people and if Sony will give in to the threats from the Anonymous group. Also worth watching out for are reactions from the networking community as well as the political circle after Al Gore said that he opposed SOPA and Congressman Paul Ryan was forced into saying that he didn’t support the bill. Despite the slight dip in conversations for a short while, volumes have increased once again as the time when the House Judiciary Committee is scheduled to meet draws near.

Unsurprisingly, it is the US that has been most active in discussions pertaining to the bill. However, with internet being a medium that surpasses geographical boundaries, it is only a matter of time before the rest of the world joins in. That said, Twitter has been the preferred channel of information exchange and communication during a crisis or uprising (remember Women2Drive and Occupy Wall Street?); as far as the anti-piracy act is concerned, it continues to remain the number one platform for communication.

Unlike before, when people had little opportunity to voice themselves when bills were passed and laws announced, the exponential growth of social media in the last few years has provided people with a platform to make themselves heard. The internet, with the exception of countries like Iran and China, has always been the ‘people’s platform’ with little interference from the government. However, with the possibility of the SOPA bill being passed into a law in the US, things could soon change for millions of internet users across the country.

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• 2011: Looking Back and Learning (0)

The first part of the ‘SMBs and Social Media Marketing: Prepping up for 2012‘ series focused on how small and medium-sized businesses can leverage from mobile marketing and combine email with social media marketing. In the second and final installment, the Position² Brand Monitor team looks at how SMBs can gear up for 2012 by selecting the networking channel that is best suited for their marketing needs. Besides figuring out what’s hot and what’s not in the social media marketing space, we will also show how Google+ can be a valuable marketing tool if used wisely.

Gearing Up for the Year Ahead: Part Two

Facebook or Twitter?

While designing their online marketing strategy, one of the biggest dilemmas faced by marketers is deciding whether to mainly focus on Facebook or Twitter; some even contemplate equally dividing attention and resources between the two channels. For large businesses and enterprises, equal focus on the two channels maybe possible, owing to the resource advantages they posses. However, when it comes to SMBs, having their finger in too many pies may not be the best move. This brings us back to the question…should SMBs be partial to Facebook or Twitter in 2012?

• Connecting with Customers through Facebook: A study conducted by eMarketer (2011) shows that 70% of small businesses used Facebook for connecting with customers, while 46% preferred using Twitter. Considering the high success rates of Facebook (as far as establishing customer connections is concerned) it comes as little surprise to learn that 39% of small business owners will be looking to strengthen their Facebook campaigns in 2012; that’s a 15% advantage over Twitter. Here’s something else; according to a recent Zoomerang survey, connecting with customers was the most important reason why SMBs leverage social media. With Facebook being the channel of choice in this aspect, this is one networking platform owners of small businesses should focus on in 2012.
• Facebook Scores Yet Again: Having found their comfort zone in email marketing, SMBs are still testing the waters when it comes to social media. Keeping this mind, Twitter’s 140 character limit can sometimes be challenging for these marketers who find Facebook comparatively simpler to use. What makes Facebook such a hot favorite among SMBs? According to eMarketer, 51% of US SMBs found wall posts the most effective Facebook marketing tactic, followed by the ability to send direct messages (20%) and post special offers and discounts (10%). Luxury candles and home fragrances retailer, Candles Off, Main mainly uses Facebook to offer discounts and special promotions. Besides being a highly active place with two-way conversations between customers and the company, their ‘Deals’, ‘Top Fans’ and ‘Exclusive’ section is a huge hit with consumers.
• Should Twitter be Ignored Entirely? Using Twitter alone is not advisable, neither is ignoring it completely. While balancing both equally like large enterprises may not be possible for smaller companies, we wouldn’t advise completely ignoring Twitter. For SMBs designing their 2012 online marketing plan, we suggest considering Facebook as the foundation of their promotional strategies, with Twitter functioning as one of the key building blocks. Although the microblogging tool may not have as many votes in its ballot box, it does have benefits like a) the ’search’ feature that can be used to find industry-related conversations to engage in and b) is a valuable and inexpensive customer service tool.

Google+ as an Emerging Marketing Platform

In the first half of 2011, online marketers had to contend with using the big three (Facebook, Twitter and LinkedIn) for promoting products and engaging with customers; this was until the Google+ brand pages were opened up to companies in late 2011. While larger companies like Ford and Coca-Cola have already embraced Google+, it is encouraging to see smaller brands approach Google’s social wonder with considerable enthusiasm. Let us look at how SMBs can make the most of Google+ in 2012 and the benefits of using this channel as a marketing tool:

• This is Where the Customers Are: Although Google+ is still catching up with Facebook as far as the numbers are concerned, the networking channel is on its way to becoming a hot favorite among small and medium-sized brands. According to a report by Ad-ology Research, 53.2% of small-business decision-makers say their efforts with Google+ are very or somewhat beneficial, while Google+ penetration (64.3%) is already rivaling LinkedIn (66.9%) in the SMB community. SMBs are flocking to Google+ because this is where prospective customers are. This channel comes as a refreshing change to users who are experiencing some level of social media fatigue, which explains the enthusiasm and eagerness with which people are jumping onto Google+.
• ‘Hanging Out’ with Google+: “Hangouts offer an amazing opportunity for businesses to engage in a highly personal way with clients, customers and industry thought leaders,” says Roger Friedensen, president and CEO of Forge Communications. He couldn’t have been more precise. Zen Bikes, a bicycle shop in Manhattan, is a great example of how SMBs can best use the ‘hangouts’ feature for marketing purposes. Using Google’s video chat feature, the company held instructional sessions and boosted prospect engagement with interesting posts.
• Segmenting Audiences: SMBs are sometimes overwhelmed with the deluge of online chatter and find it difficult to engage with every customer out there. Keeping in mind their resource limitations, we would say Google+ is a cost-effective and efficient channel to manage content and better engage with customers. Over the next few months, we expect to see an increase in use of Google+ by the SMB community to segment their audiences and share content directly with those certain groups of followers.

Conclusion

The last few years have seen an increase in SMBs integrating social media with their traditional marketing strategies. What started off as an after-thought soon became an integral part of the online marketing arsenal for owners of small and medium-sized businesses. In 2011, one of the most noticeable changes as far as digital marketing in the SMB space was concerned was the combination of email marketing with social media. Although owners of small businesses will continue to hold on to email as a crucial marketing tool this year as well, going by the trends and the opinions from industry experts, we expect social media to occupy an equally important place. Meanwhile, another area where we expect the SMB community to focus on in 2012 is mobile marketing. By mobile marketing, we mean heightened marketing activity using location-based services like Facebook Places and Foursquare. While SMBs are reasonably comfortable with m-commerce, new research from the NPD Group indicates that approximately 73% of small-to-medium businesses with less than 1,000 employees are eyeing tablets for 2012. According to the research, the average investment in tablets will be more than $21,000 for small businesses over 2012 and 90% of respondents believe that they will spend at least that amount, if not more, on new tablet technology.

Facebook will continue to rule the roost with SMBs continuing to design their online marketing strategies keeping Facebook as the central point of focus. Similar to 2011, Twitter will follow Facebook in its role as a supporting tool. However, what deserves a special mention this year is Google’s newest kid on the networking block, Google+. SMBs will approach this channel with as much enthusiasm as their larger counterparts, or perhaps more. Google+’s Circles and Hangouts functions (among others) will make this a highly used channel; whether or not it will surpass Facebook is something to look out for in the next few months. That said, SMBs appear to be reasonably geared up and better prepared for 2012. With social media being a dynamic and exciting space, it is encouraging to see owners of small and medium businesses striving to keep pace with the changing times and carving a niche place for themselves in the online marketing world.

• SMBs and Social Media Marketing: Prepping up for 2012: Part One (1)
• Social Media for SMBs: 4 Best Practices #SMBs #BestPractices (2)
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SMBs and Social Media: A Brief Recap and a Few Predictions

In our previous post on SMBs and Social Media, we discussed how small and mid-sized companies can get the maximum benefits from their social media marketing efforts. A lot has happened in the social media space since then. Google+ was launched, Facebook’s facelift grabbed the headlines, and Twitter launched its revamped version. While some SMBs embraced the changes, there were others who continued to remain wary as far as social media marketing was concerned. Here’s the story so far and what to expect in the year ahead:

• Although comparatively slower to adapt social media marketing, there has been a gradual increase in the use of channels like Facebook, Twitter etc by small and medium-size business owners over the past four years (eMarketer). Over 35% of US small businesses reported using online social networking for marketing in 2011.
• Despite 2011 being a tough year for businesses, SMB marketers see social media as the light at the end of the tunnel and are quite optimistic about 2012.
• According to a Zoomerang Online Surveys and Polls and GrowBizMedia SMB forecast for 2012, 1/3rd of respondents plan on using advertising, marketing and social media as the primary methods of attracting new customers. This is despite 25% admitting to not being entirely comfortable with social media tools.
• Affordability (66%), use by customers (56%), and potential as word-of-mouth referral source (55%) were the primary reasons why SMB marketers use social media (SMB Business Perspectives: 2011 Results and 2012 Projections).
• In a Q1 2011 survey by Network Solutions, it was revealed that 63% of SMBs felt that social media greatly contributed to increase in customer loyalty, while 25% said that their investments in social media marketing added to profits.
• As far as active sales are concerned, over 1/2 of US SMBs said that social media sites played a crucial role (Hubspot).
• 2011 saw small businesses use daily deal sites like Groupon and LivingSocial with great enthusiasm. Industry experts are wondering if this will take off on a larger scale in 2012.

While 2011 has been a mixed bag, marketers of small and medium-sized businesses are confident about the year ahead and plan on using social media in one form or the other for marketing purposes. With marketing budgets being planned, promotional strategies and campaigns being designed, early 2012 certainly is a busy time. Keeping this in mind, the Position² Brand Monitor team has researched and gathered some crucial material on how SMBs can effectively use social media marketing, in a manner that should make preparing for 2012 less challenging and a lot enjoyable. This, we have presented in a two part series.

Gearing Up for the Year Ahead: Part One

The Good News for SMBs

It is no secret that SMBs have always been more comfortable with email marketing when compared to other methods. According to Zoomerang, email marketing was the second most preferred choice among SMB brands in 2011; although, this may not be the case in the next few years. Considering the rapid pace at which businesses are jumping onto the social media bandwagon, for these marketers the choice is between moving with the times and getting left behind.

• Social Media or Email? Before we list the benefits of using Facebook and Twitter as promotional tools, it is first important to understand why small business owners are more comfortable with email marketing. Our research shows that smaller brands with financial constraints find this method a) more personalized and b) easy-on-the-wallet. We wouldn’t disagree. However, what these brands need to understand is that the modern consumer is social-savvy and time-strapped and may not have as much patience with emails. That social media marketing is time-consuming and expensive is a myth. Looking the Zoomerang study, we know that social media marketing is gradually gaining momentum. The smart small business marketer knows that this is a) just as cost-effective (if not more) b) easy-to-use with practice and c) considering the growing popularity of networking channels like Facebook, Google+ and Twitter (to name a few), a better way of connecting with prospective customers.
• The Best of Both Worlds: SMBs have been using email for a long time now; which explains why they are hesitant to choose social media over the tried-tested-and-successful formula of email marketing. Today’s small business owners, however, favor the middle ground and are looking to combine the two methods. The 2012 Marketing Trends survey shows that an impressive 68% of respondents (SMBs) are open to integrating their social media marketing directly into their email programs. For brands gearing up for the year ahead, it would be wise to invest your marketing dollars in the right direction and get the most out of the email-social media combination.

Emergence of the Mobile Era

Industry experts are of the opinion that most online marketers will increase focus on mobile marketing in 2012 and SMBs are no exception. The year 2011 saw brands design their online marketing strategies keeping the mobile customer in mind. In our opinion, 2011 was only a tip of the iceberg. Here’s why we think SMBs should include mobile in their 2012 marketing checklist:

• Catering to the Mobile Population: According to the recent Ad-ology Research report, 21.8% of small-business owners are planning to dedicate more resources to mobile marketing in 2012. Additionally, one in five surveyed SMB decision-makers also plan to develop a mobile app. The increase in smartphone penetration and growing use of mobile phones by customers has prompted SMBs to integrate mobile with their online marketing strategies. If these stats aren’t reason enough for small and medium businesses to invest in mobile marketing, here’s something else; one of the biggest demographics that use mobile devices are the youth. Considering how economically empowered today’s young customers are, this is one target market SMBs wouldn’t want to miss.
• Using Location Based Services: With people increasingly using location based services like Foursquare, Facebook Places and Yelp from their mobile devices, SMB marketers have found a new way of marketing their products and services to customers. As far as mobile marketing is concerned, we expect location based services to be the next big thing. Keeping this in mind, our advice to owners of small and medium business is that, going forward, they should focus on using some sort location-based services (LBS) to cater to the rapidly growing mobile demographic. The Columbus Sandwich Company, for instance, is an example of how small businesses can use LBS for direct targeting. The company uses a specific location service, Seven Lunches, which is a mobile app that shows the customer daily specials from restaurants and cafes nearby, helping them get the best deals and the best information.

What about Social Media Platforms? Can SMBs expect something from Google+? Will Facebook continue to be the preferred choice?

In the first part of our series, we discussed how SMBs can better prepare for 2012 by combining social media with email marketing and the importance and benefits and of mobile marketing. In the second and final part, we will focus on how marketers can get the most out of Google+ in 2012. In addition to this, we will also discuss the dilemma faced by many SMBs, especially, the new entrants; i.e. the question of choosing between Facebook and Twitter and which platform is likely to offer maximum advantages. You can either subscribe to our blog’s RSS feed or watch this space for more.

• SMBs and Social Media Marketing: Prepping up for 2012: Part Two (0)
• Social Media for SMBs: 4 Best Practices #SMBs #BestPractices (2)
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Making the Most of the Holiday Season

Although consumer budgets continue to remain tight this year, online retailers have little reason to worry. Consumers, who previously thronged brick and mortar stores during the holiday season, are shifting their focus to online shopping. What is attracting these shoppers to online stores? In addition to the convenience of saying goodbye to the crowded stores catering to last-minute-shoppers, the availability of discounts is a big crowd-puller. According to the 2011 Holiday Shopper Survey:

• 79% of shoppers said saving money was one of the reasons they preferred shopping online.
• This, along with other reasons like saving time (77%), easily locating products (76%) etc have made online shopping a hot favorite this holiday season.
• 56% shoppers surveyed said that they planned to spend about the same on shopping this year (during the holidays) as they did in 2010.

The above statistics indicate that this is the perfect opportunity for online retailers to get their sales charts soaring. Marketers, who may not have had such a great year so far in terms of revenue, are looking forward to making up for this. Going by the Shop.org’s eHoliday survey, 68% digital marketers are expecting to see a +15% growth over last year. One of the crucial things that brands need to keep in mind is that, although people may not make immediate purchases, they are definitely doing their research online before deciding to buy; which is why we recommend marketers to be one step ahead.

Planning Ahead

With the holiday season just around-the-corner, there is one thing that both consumers as well as online marketers are doing i.e. planning ahead. The fact that 61% consumers (2011 Holiday Shopper Survey) are planning to first check-out a product on the web before spending their hard-earned-money means brands have much planning to do. Before overwhelming consumers with irrelevant or one-too-many promotional messages, here are some things that brands need to check in their to-do list:

Research Social Buzz

Considering how lucrative the returns can be, the temptation to launch that Facebook campaign or upload the Christmas special promotional video on YouTube may be tough to pass up. However, diving into the vast and highly crowded world of online marketing without doing some background research may not be the best approach. Our advice? Make use of social media monitoring tools like Brand Monitor™ to a) monitor the buzz surrounding your brand and determine if you need to tweak your existing marketing strategy b) find out what social media channels are most popular with your target audience c) determine the demographic that is likely to buy your products and aim marketing messages accordingly and d) know what time of the day are your consumers most likely to engage with your brand.

Start Early:

The secret to a successful online holiday campaign is to start early instead of focusing on the holidays as they happen. Social media creates buzz for the product way ahead of the launch phase, thereby increasing demand. The Shop.org study indicates that 52.9% of retailers planned on starting their promotions by Halloween. With Black Friday, Cyber Monday and Free Shipping Day fast approaching, and Christmas not too far away, brands can entice shoppers by treating them to early deals, alerting them about special promotions and offering seasonal discounts. In our opinion, enticing customers with the prospect of avoiding the last minute rush is also a good way to stay ahead of the competition.

Identify Your Competitors:

This is where social media monitoring tools come to the rescue…yet again. Keeping a tab on competitor activity is a vital part of the planning process. This helps a) position yourself better to attract customers b) determine how you can design your holiday special promotional material to be different from or better than that of your competitors’ c) understand where you stand in a crowded, competitive environment. Monitoring competitor activity is also a great way to find the gaps and fill them in, giving consumers a good reason to choose your brand over others in the industry.

Preparing for the ‘What-If’ Situations:

For both marketers as well as consumers, the holiday season can be chaotic and sometimes stressful. Consumers, who are looking for last-minute deals or are facing problems accessing a coupon, have little patience with brands that are slow to respond and may end up looking for alternatives. Although many social media savvy brands today have a crisis communication plan in place, it would be a good idea to customize it for the holiday season. The holiday season for instance, brings with it a deluge of questions around return policies, complaints regarding shipping issues etc. Considering the tight deadlines that marketers have to work with during this time, it would be smart to plan ahead for certain ‘what-if’ situations that could arise and not risk being caught off-guard.

The Must-Haves of Holiday Special Campaigns

Consider this; Forrester Research has predicted e-commerce sales to climb 15% in the holiday period this year. Despite the economy being in the recovery phase since 2008, shoppers, who tighten their purse strings throughout the year, don’t mind indulging during the holidays; and 2011 is going to be no different. Also, the otherwise cautious marketers are a little more indulgent in their investments. What makes shoppers indulge and how can online marketers design their strategies to make the most of consumers’ willingness to spend during the holidays? Let’s look at some must-haves of holiday special campaigns:

Time-Sensitive Deals:

The holiday season, for most marketers, significantly impacts their financial goals, making the last two months of the year a crucial time to announce those half-price sales and discounts. As for consumers, they are only too happy fill in their shopping carts. Timing those deals in accordance with the key dates is a good way to increase sales. Black Friday, for example, is synonymous with online shopping deals, with Green Monday, Cyber Monday and Free Shipping Day being the other hot favorites. According to ComScore’s 2010 Holiday Spending Data, e-commerce spending for the first 49 days of the November – December 2010 holiday season was up by 12% ($28.36 billion spent online) in comparison with the previous year. Thanksgiving Day particularly saw a 28% increase in online spending. These statistics further highlight the importance of time-sensitive deals and are a good reason why digital marketers should develop a specific marketing strategy for each day.

Holiday-Special Social Media/Web Pages:

Designing a creative Facebook or Twitter page for the holiday season is a good way to attract consumers and does wonders to brands’ visibility online. Best Buy’s Facebook page is a great example of what a holiday special webpage should look like. Besides focusing on the season-special offers, the festive images and colors used further add to the visual appeal.

Throw in Some Benefits:

Besides discounts and special offers, if there’s something else that stressed-out shoppers would love during the holidays are added benefits like getting early access to sale prices, hassle-free delivery of purchases and free shipping. Although consumers are willing to pay the full price for the product that they ‘absolutely have to have’, they consider high shipping costs to be one of the deterrents that prevents them from making an online purchase. The 2011 MarketLive Consumer Shopping Survey shows that 45% consumers felt that high shipping costs is one of the top reasons why they wouldn’t shop online. Despite free shipping being an important driver of e-commerce, offering this benefit to all their shoppers all the time is impractical for online marketers. A wise approach, in our opinion, would be to a) offer free shipping on all orders, but for only limited periods or during the holidays or b) offer this service only to repeat customers and those who make purchases exceeding a certain amount.

Get Creative:

It is no secret that creativity is a crucial deciding factor as far as the success of a campaign is concerned. With an overload of season special campaigns during the October-December period, a creative digital campaign stands out and gets the brand noticed. After posting unsatisfactory results over the last three quarters, retailer Gap is doing everything it can in the social media marketing ‘how to’ book to turn their fortunes around this holiday season. On checking out their recently launched ‘I want Candy’ campaign on Facebook and YouTube, we have every reason to believe that the company’s marketing team has been at their creative best. Launched to increase their Children wear business during the holidays, the USP of the campaign is music video featuring viral music sensation, Maria Aragon. This, along with exclusive offers ($5 off or 50% off one regularly priced item) for those who share videos with their friends, makes this campaign something to watch out for.

The Role of Mobile

The modern consumer is almost always on-the-go and has little time to spend browsing through shopping lists over PC’s and even laptops. As far as visiting actual brick-and-mortar stores is concerned, they would rather make purchase decisions based on the information they can access on their mobiles or smartphones. For retailers, this means making their webpages mobile friendly in order to better meet the requirements of today’s shoppers. A recent PayPal survey of smartphone and tablet owners shows that holiday m-commerce could nearly crack the half-way mark this season, with 46% consumers planning to make holiday purchases via mobile devices this year. To know how the advent of the mobile age influences or has changed consumers’ shopping behavior during the holiday season and what can retailers do to benefit from this, brands have to first understand three aspects of m-commerce:

What Are Consumers Looking for?

According to a 2011 Mojiva survey, consumers are using their mobile devices to look for:

1. Product Information: 56% respondents want to do their homework via mobile before visiting actual stores or even buying online.
2. Coupons/Sale Information: Coupons, special offers and information on sales is a driving factor for 56% mobile shoppers.
3. Product reviews: For 53% respondents, what their friends have to say about a product or service on various social networking channels will greatly influence their holiday purchasing behavior.
4. Store Information: 51% shoppers looked for the nearest store that sells their product via their smartphones and mobiles.
5. Buying Products: 32% will actually buy the products through their mobile devices.

How Can Marketers Help this Decision Making Process?

From the Mojiva survey, it is clear that research is majorly what consumers will use their mobile devices for. With so little time and so much to shop, mobile devices are the perfect solution for time-strapped holiday shoppers. For marketers, it all comes down to making it convenient for them. Here’s what we suggest:

1. Create mobile friendly websites for your brand(s) and include all the required information in an easy-to-navigate format. Smartphone users often scan the bar code to obtain product details see if it is actually discounted. Also tailor your marketing messages for the mobile channel by keeping in mind text-limitations, mobile capabilities and handset variations into account.
2. Allow customers to download coupons via smartphones. Consumers sometimes do this when they are at the physical location.
3. Provide a link to map directions. Consumers who are driving around will find it much more convenient to locate your store from their mobile devices by following the directions provided.
4. Provide customer reviews to mobile users. This can immensely influence how they shop, especially during last-minute shopping excursions.

Conclusion

Despite being weighed down by financial constraints during the rest of the year, otherwise frugal consumers are loosening their purse strings when shopping during the holiday season. According to Matthew Shay, president-CEO of the National Retail Foundation, retailers are “optimistic that a combination of strong promotions and lean inventory levels will help them address consumer caution this holiday season.” The attraction of season-special offers and promotions is expected to be a major crowd puller during the October-December period this year. However, shoppers also recognize value beyond low prices, with a significant number looking for added benefits like free shipping and timely delivery of purchases.

With people starting to shop as early as Halloween, retailers are designing their holiday special online marketing strategies earlier than expected. Online shopping means saying goodbye to crowded shopping malls and long billing queues; therefore it is unsurprising to see consumers hitting the web much earlier than expected this year. For online marketers looking to keep up with the ever changing taste of consumers, the choice is between staying one step ahead and getting left behind. Keeping this in mind, marketers have increased focus on time-sensitive deals and creative social media campaigns. Although the coupon collectors and discounts seekers will continue their quest for the best deals, we expect to see a significant increase in the percentage of holiday shoppers who do their research online before making a purchase.

While the experienced online retailer knows that offers and deals almost always guarantee healthy revenues, the modern marketer’s attention is diverted to the next big thing in online marketing; m-commerce. With IBM expecting 15% of online shoppers in the US logging into a retailer’s website via their mobile devices this year, retailers are tweaking their digital marketing strategies to offer a smarter and a more convenient shopping experience to this fast-growing demographic. For social media marketers and online retailers, the last three months of the year hold a lot of promise and offer the opportunity to make up for slowing sales during the rest of the year. With a little smart planning and adequate preparation, this should be easily achievable.

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