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Do social media ad campaigns boost sales for retailers?

September 29, 2014

Capgemini warns retailers not to expect social media alone to increase sales.

Major retailers such as Macy’s and Target have been investing heavily in social media marketing campaigns over the past few years in an effort to increase sales and build consumer awareness. The research seems to be mixed as to how effective social media is in boosting sales.

A caution for retailers about social media marketing
Capgemini S.A., a consulting agency, recently warned retailers not to expect social media alone to increase sales, reported Forbes. Vice president at Capgemini, Brian Girouard, explained that consumers are more interested in connecting with friends and sharing personal information on social media sites than they are interested in following retailers and learning about products through blogs and forums.

“There is definitely a question mark over where and how social media fits into, or adds real value in, the shopper journey,” Girouard said.

Capgemini based its research on a comparison of 2012 and 2014 digital shopper surveys. The findings indicated that social media carried less influence for the 18,000 surveyed in 2014 than those in 2012, according to the news source. 

The slight decline in social media users’ interest in consumer activities on Facebook and Twitter may be dismaying to some retailers, such as Target and Macy’s, who have recently expanded marketing efforts online. Interestingly, other retailers, conversely, did not wish to send Facebook too much data for fear that the social networking site will track users across the Internet in an effort to increase its advertising revenue.

Last year Target launched Cartwheel – an application which helps consumers locate deals online, share them with Facebook friends and redeem the offers at stores with their smartphones. Similarly, in 2012, Wal-Mart and Facebook introduced 50 million ads promoting televisions and toys to the news feeds of tens of millions of people. Wal-Mart reported increased interest from the campaign, but their Facebook page also showed many complaints from users about unwanted ads, reported Forbes.

Mobile apps may be more effective in boosting sales
Girouard believes that retailers need to explore new ways to find customers through their mobile devices. While consumers may be less interested in shopping through social media sites, 45 percent of the survey participants indicated that they accessed retailer sites and apps using their phones.

“Smartphones have jumped over the importance of social media,” Girouard added.

A different study conducted by Collective Bias found that people who followed retailers on social networking sites were spending 50 percent more money shopping than those not following the retailer, reported InsderMonkey.com. The two studies are not comparable however, because following a retailer on Facebook signifies interest whereas simply seeing an advertisement in a news feed does not. Additionally, the Collective bias study does not reveal whether users were following retailers because of Facebook, or if they were already customers of certain retailers and started following them on Facebook as an afterthought.

The future trend may be for retailers to create more mobile apps and digital platforms to showcase and sell their products. Decreasing social media marketing investments might save retailers some cash to spend on other technology developments. It is worth mentioning that while social media, according to the two studies, is not yet proven to increase sales, its efficacy in spreading brand awareness is possibly very powerful. Retailers may find more success promoting their brand on Facebook simply for brand recognition purposes and less for selling their products through news feeds.

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