A new warning just out – social networks may not drive online sales! You don’t say….
I was asked to talk about this area of online strategy at an LBS event a few weeks ago – the theme – monetizing social networks. There is a lot of interest in this right now and for good reason, we all want to make sure we are investing in stuff that will drive sales. This particular session was interesting, there were many bright individuals in the room and together we were able to highlight a few cool emerging businesses but we weren’t weighed down with examples of big brands leveraging social networks to drive online sales.
Now I see that Forrester are offering up a note of caution, claiming social networks have been considered more effective for brand-building and less proven for driving revenue or sales conversion. They say that retailers therfore need to continue investments in proven techniques like e-mail marketing and free shipping promotions to drive sales.
Well yes that’s a safe conclusion to draw because it’s a classic case of “get the basics right before adding the frills”. But it’s a big generalisation and we should all be working on improving the basics everyday anyway – I think it’s still important for anyone who owns online strategy for a retail brand to be thinking about how their customers might benefit from well thought through innovations and in some cases that will draw on social networks or on offering interaction that fits the customers mission.
This story summarising recent research with retailers in the US about their plans for online spend in 2008 suggests most aren’t thinking any further than placing ads on social network sites. I do hope some of the bright sparks in retail are thinking abit more ambitiously than this…please say yes.
BTW – i almost forgot to mention the headline news of this research from Forrester and Shop.org – Retail online sales (US) are set to grow again to $204 billion in 2008 from $174.5 billion last year. This despite the recession! All I can say is some brands are going to have to work harder to maintain growth and that means challenging the assumptions and thinking futher ahead – online strategy designed to deliver something of value to your customers and within a multi-channel retail strategy.
