By Samantha Murphy

(September 17, 2009) Facebook and Twitter are powerful tools for retailers looking to communicate with customers, but are these social networking sites becoming their unlikely new competitors?

For Cleveland, Ohio-based American Greetings, a greetings card and e-commerce company, the answer is yes.

“Many consumers now send birthday and holiday messages via Facebook or Twitter rather than relying on cards and e-cards,” said Kathy Hecht, senior VP and general manager direct for American Greetings, during the recent eTail East conference held in Baltimore. “Our competitors are no longer just those companies that offer the same product, but free online sites that can provide a similar service.”

Facebook members can also send free or low-cost virtual goods to their online friends. However, some analysts think this niche area is limited since many social networkers aren’t ready or interested in making larger purchases on the site -- they’re there to socialize, not to shop.

Still, Hecht said American Greetings aims to up its game to stand out among these new trends and keep customers loyal. It plans to pull out the stops especially for this holiday season -- a period where the online retailer usually sees a 10% boost in traffic.

“We’re going to use everything we know about our customers -- data collected about their previous spending habits on the site -- and try use it to our advantage, “Hecht said. “We’re segmenting them based on previous purchasing behavior, frequency and even their gender.”

American Greetings has used segmentation in the past, but will couple it with other tactics to make a strong impact this holiday season.

“It’s basic but like with any business, we have to stop and remember why certain shoppers are even on our site in the first place,” Hecht said. “We need to make it as easy as possible to connect them to the content and products they want on our site, and be sure to keep them interested.”

This means keeping the navigation on the site clean and easy, and reaching out to them via e-blast whenever possible, Hecht said.

“We have a feature that sends customers a reminder about what certain birthdays, events or anniversaries are coming up based on what they sent in the past,” Hecht said. “This is a great strategy for us -- it’s important not to overlook how easily some people forget certain dates.”

However, this successful opt-in feature does present a problem for the company: “The challenge for us lies with blending our two systems,” Hecht said. “The difference between a reminder and a newsletter becomes blurred in our customer’s mind.”

In response, American Greetings is attempting to maximize personal e-mails by making sure the content is relevant and gets its customers to the right place on the site.

“We also intersperse our other online communications, and we make sure it looks different than a more generic e-mail blast we might send out to our audience,” Hecht said. “We want our customers to recognize the extra personal touch we give, and hope they remember that year after year.”

If you can’t beat them, join them

More than 50% of brands and retailers have already adopted five-out-of-10 social media tools, according to the recent “Community and Social Media Study” conducted by the Chicago-based e-tailing group and San Francisco-based PowerReviews.

Adding a Facebook Fan Page was the most popular social media marketing strategy among retailers with an 86% adoption rate. The other top tools include Twitter publishing (65%), customer reviews (55%), blogs (55%) and viral video (50%).

What was one of the top reasons behind this accelerated adoption? The fear that customers would leave their site to find a more socially engaging one.

“This means retailers have to take those extra steps and find new ways to keep shoppers more engaged and interested than ever before,” said Lauren Freedman, president of the e-tailing group, at the recent eTail East conference.