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Monday, September 26, 2011

Social Media and Big Retailers: Just Browsing, But Not Necessarily Buying Into the Concept

Earlier this year, Amazon.com announced the hiring of a director of social media, John Yurcisin, from WPP's Ogilvy & Mather. Yurcisin has been brought on board to help Amazon.com develop social strategies. Additionally, Amazon.com is in the process of creating a Social Games Group to compete with Zynga, the world’s leading social game developer.

Amazon.com is one of the relatively few large retailers that is joining the world of social media. According to a recent post on InternetRetailer.com, 79% of the online retailers listed in the Internet Retailer Top 500 Guide have their own Facebook page. However, only 12% of those retailers have the ability for consumers to shop on Facebook. The question is, why?

Business Size and Social Media Use
Small and medium-size businesses have turned to social media much more readily than their larger counterparts. Smaller businesses simply do not have the budgets for traditional marketing outlets, such as print and television, and, as a result, have to be more adaptable and innovative in their marketing strategies. Social media is an extremely cost-effective marketing tool, which is a great advantage, especially in a tight economy.

While big retailers do have the luxury of large advertising budgets, they are generally not as willing to take the time and effort to maintain a social media platform and prefer to stick with tried and true advertising methods. When larger retailers do acknowledge the effectiveness of social media as a marketing tool, they tend to forget social media is about connecting first, selling second, and focus on events and promotions rather than on fostering long-term relationships with consumers.

Rethinking Social Media
However, big retailers are making a critical error in their marketing judgment. Social media is not just for small and medium businesses. Big retailers have a lot to gain by engaging in social media and developing a strong social media presence. Large, international retailers are rethinking their overall marketing campaigns to include Internet marketing strategies, such as social media platforms.

Heineken, as reported in a recent blog post by Des Walsh on SocialMediaToday.com, has signed a deal with Google in a move to update their advertising strategy and to reach a younger target market. Adults in their 20s spend a considerable amount of time using social media, and it only makes good business sense to go where your customers are so that you can connect with them on a personal level. Large retailers not taking advantage of social media are clearly losing a source of potential revenue – revenue that is sure to be snapped up by businesses with strong social media platforms.

Moving Forward
While Amazon.com already had the potential for social interaction in the form of customer reviews and product recommendations, the company is now looking to strengthen its social media presence by adding Facebook and Twitter features – like the ability of readers to post public notes about what they’re reading – to its electronic book reader, Kindle.
While big retailers have the advantage of brand recognition and reputation, smaller businesses have the benefit of a connection and relationship with their customers. In an economic climate where consumers are more careful than ever about how they spend their income, large businesses can greatly benefit from making that personal connection as well.

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