Driving Sales through Social Media, Smartphones and User-Generated Content: 4 tactics for retailers

by David Kirkpatrick, Reporter

Social media, smartphone technology and user-generated content are three emerging areas in marketing, creating new patterns of influence in consumer behavior. All three should be on the radar screens of online retailers.

The MarketingSherpa 2010 Social Media Marketing Benchmark Report found 62 percent of responding consumers use social media to learn about new products, services and features. According to Nielsen, smartphones will account for over 50 percent of U.S. wireless subscribers by the end of 2011.

Pehr Luedtke, CEO, PowerReviews, says, "Unlike prior years where it was all about making sure you had your inventory right and your assortment correct, what we’re seeing is [online retailing] is about understanding these different influence patterns that the consumer is adopting in a dramatic way in order to drive sales."

PowerReviews is a consumer company helping retailers unlock the power of customer conversation. Along with offering a number of products and solutions, it operates the consumer customer review website, buzzillions.com, as a lab to better understand how consumers engage with user generated content and as a portal to send highly qualified traffic to its retail partners. Buzzillions averages around four million monthly visitors and has more than 12.7 million unique product reviews.

What can retailers do to harness these new patterns of influence? Luedtke lists improving the mobile presence, adopting the Facebook "like" button and embracing customer conversation on the retail website.

Luedtke says the increasing penetration of smartphones in mobile technology, the rapid adoption of Facebook's "like" button by both social media users and retailers, and the willingness of consumers to provide user-generated content, such as with a product review, are all places retailers can take steps that drive sales.

Here are four tactics Luedtke suggests marketers apply to harness these new patterns of influence.

Tactic 1. Understand the mobile technology shopper

According to ABI Research the mobile online commerce numbers in the U.S. for 2010 should exceed $3.4 billion. For retailers it is important to understand how and when smartphone shoppers are interacting with websites to be able to best engage these customers.

Consumers are using mobile technology in the form of smartphones for shopping in increasing numbers. Through buzzillions.com, PowerReviews has found:

o Mobile traffic doubles every four months
o Mobile shopping increases by 32% on the weekends when compared to weekdays
o The top mobile shopping day is Sunday.

"What that implies is people on the weekdays are at the office using their computers, and on the weekends when they don’t have their computers they are moving to their smartphones," says Luedtke. "They are working in the store and actually checking prices, checking availability, checking competitors’ products, checking similar offerings and checking reviews on the weekend with their smartphone."

He adds this use of mobile computing is not for early adopters of technology, it’s a mainstream shopping experience for millions of people, and the number one mobile shopping search is for product reviews.

Tactic 2. Leverage the Facebook "like" button

With more than 500 million active users, Facebook has become an appealing community for many consumer marketers.
"Consumers have chosen Facebook as the community of choice. The numbers speak for themselves, and that’s their community brand," states Luedtke. "Their commercial relationships still exist with the retailers and I think what we are going to see over the next 18 months is, 'How does Facebook play with retailers?'"

Right now the most obvious and public connection between Facebook and retailers is the "like" button. According to Luedtke, after Facebook announced the widespread use of the "like" button and the Open Graph concept earlier this year, many retailers have launched the button, a move that both validates and accelerates the use of customer conversation to drive purchase decisions.

Open Graph is a protocol that allows Web pages to integrate with Facebook’s social graph creating connections between websites outside of Facebook and Facebook users. Facebook's Mark Zuckerberg coined the term "social graph" to refer to the social network of relationships between users of Facebook.

PowerReviews recently introduced a product that gives customers creating reviews an option to verify their product review by connecting with Facebook through "liking" the retailer and being given the opportunity to share the review on their -- and the retailer's -- Facebook pages.

Luedtke says PowerReviews is seeing 18 percent of reviewers using Facebook to verify the review, showing a willingness on the part of the reviewer to provide additional information about themselves that in turn helps other shoppers make informed buying decisions.

The "like" button allows retailers to tap into a very engaged group of social media and e-commerce consumers. According to Facebook, the average "liker" has two and a half times more followers than the median Facebook user, and is over five times more likely to link to external sites than the typical Facebook user.

Tactic 3. Allow user-generated content to boost SEO

Luedtke believes site speed, uniqueness of content and freshness of content all rank among the top variables valued by Google’s search algorithm. User-generated content can help in all three of those areas on e-commerce websites. Luedtke encourages retailers to solicit their buyers for product reviews to regularly bring new user-generated content to the site, and not just make this request once. He suggests a structured email approach that follows-up with consumers willing to provide reviews.

Another approach that is very effective from an SEO perspective is to introduce "Q&A" functionality on the site where consumers can ask questions about products and get real-time answers from dedicated staff members. This serves to put very specific content about those products on the website -- content that most likely does not appear anywhere else on the Internet -- and also provides a very strong customer service role as well.

Electronics retailer Abe’s of Maine added a Q&A solution to its website and found a 40 percent reduction in returns for products covered in the answer portion of the Q&A. The company also used the Q&A solution to improve SEO and increase conversion resulting in lowering the acquisition cost of new customers to $24.

The key to maximizing user-generated content on e-commerce sites is to own and present the content on the site’s servers and not rely on other servers for bringing that content onto the website. Hosting this content helps optimize the speed of the site, increasing SEO.

An additional step to boost SEO with user-generated content is to summarize the reviews and Q&A material through a "pros and cons" listing, or some other breakdown of the content. This adds additional fresh content on the site and typically provides strong keyword density for SEO purposes.

Tactic 4. Utilize consumer product reviews

And don’t be afraid of a less-than-stellar review.
Luedtke looks at negative reviews as actually driving additional conversion. He states, "From qualitative research watching consumers engage with reviews, and from our Social Shopping study which showed that 38 percent of shoppers agreed with the statement 'no negative reviews or limited negative reviews degrade your trust in reviews,' we believe there is no reason to squelch negative reviews."

He says, "Negative reviews can increase buying confidence more than positive reviews. For example, if someone takes the time to write a negative review, and the negative element is not a buying concern for the reader of that review, the confidence level of that potential customer potentially goes up."

Consumer product reviews can tie together engaging with mobile technology users and leveraging social media. Product reviews are the most searched for mobile shopping content, and an e-commerce site with strong social media integration -- such as utilizing the Facebook "like" button -- allows consumers to generate content and immediately publish that unique content throughout the Web on the e-commerce site itself, Facebook, Twitter and other social media platforms.

Internally, consumer reviews can be used by retailers to drive product development and help in making merchandising design decisions. Luedtke says to think about customer content on the website as a real-time focus group where customers are, "telling you things about your product that you should know, you should learn from and you should incorporate in your own development process."

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PowerReviews

Buzzillions

Source: The Nielsen Company

Source: ABI Research

Facebook Open Graph

MarketingSherpa 2010 Social Media Marketing Benchmark Report