Exclusive survey reveals that social media has growing importance for retailers
Twitter and Facebook aren’t just for consumer networking anymore.
With more and more retailers and shopping centers jumping on the social media bandwagon, Chain Store Age and Cleveland-based shopping center developer Forest City Enterprises surveyed CSA’s readership to find out where retailers are trending in terms of social media engagement and communication tools.
The results were telling. In the “How Retailers are Embracing Digital Technologies: Which Ones and How Fast” survey, conducted by Forest City and Chain Store Age with consumer research firm Alexander Babbage, Atlanta, respondents revealed that opted-in proprietary database communications are of paramount importance, both now and in the future. But, during the next 12 months, Facebook and Twitter, along with Web and mobile advertising, will jump considerably in importance — though not eclipsing proprietary databases and customer affinity programs.
More than half of the surveyed retailers (53.3%) said that opted-in proprietary databases are very important in communicating with their shoppers currently, and 57% said these databases would be very important a year from now. More than half said that frequent-shopper programs, opted-in databases, Web advertising and Facebook will be the most important forms of communication 12 months from now.
Among the newer forms of communication, retailers felt that Twitter and mobile advertising would see the greatest surge in deployment within the next year.
“While retailers’ direct relationships with their customers remain their preferred link for communications, mall and shopping center owners clearly have a growing opportunity to complement those efforts through the use of social media, as well as more traditional tools,” said Jane Lisy, VP marketing commercial management, Forest City.
The survey suggested that category of retail clearly influences social tool selection. Specialty retailers were more likely than all other retail category respondents to say that Web advertising, Facebook, Twitter, organic online searches and magazines will be very important forms of communication in the future. Department store retailers, on the other hand, have a strong direct-mail bent, as 74% said direct mail is very important currently and 62.9% said it will continue to be very important in a year.
Quick-serve restaurants had the least amount of interest in opted-in proprietary databases, as just 36% would rank the medium as “very important” 12 months from now. However, the category is much higher on Facebook; half of the quick-serve operators surveyed said Facebook programs would be very important in a year. Interestingly, the biggest Facebook fan category was home improvement, as 60% of home-improvement big-box stores said the medium would become very important. Least interested in Facebook? Sit-down restaurants (33%).
It was no surprise to find that the overwhelming majority of retailers have online sales. Eighty-three percent do at least a portion of their sales online, but again the degree varied widely by retail category.
Among retailer types, discount department stores attributed the highest percentage of their sales to online, with 14.3% saying that more than half of their total sales are conducted online. Among specialty retailers, just 8.3% said that more than half of their sales are currently online sales, but this number more than doubles when > looking ahead — 19.6% forecast online sales will represent more than half of total sales in five years.
No matter the tenant category, the research revealed that mall owners have huge opportunities when it comes to social media programs. When asked what landlord-provided programs were most desirable to tenants, more retailers (33.4%) ranked customer affinity/frequent shopper programs at the top of the list.
Web advertising, free mall Wi-Fi and opted-in property e-mail database closely followed frequent shopper programs. Facebook, mobile advertising and Twitter rounded out the list of landlord programs that could sway a tenant to select one mall owner’s property over another.
“Since customers use smartphones to hunt for deals when they’re on-site, Wi-Fi access will continue to grow in importance as a customer amenity for shopping center properties,” Lisy said. “In addition, retailers are recognizing the benefits of leveraging shopping center customer databases to connect with customers.”
Retail respondents were quick to point out that the onus is on themselves, not on landlords, to push social media programs forward. Compared with the 47.8% who said customer affinity programs are currently very important internally and the 58.8% who said these programs will be important internally 12 months from now, it appears that retailers are less likely to look to landlords for this type of program and more likely to put a priority on their internal affinity programs.
But, that shouldn’t make the programs any less of a priority for landlords, according to Lisy.
“Although we’ll always be fundamentally brick-and-mortar, we’re working hard to use the power of digital communication to maximize value for our retail tenants,” she said. “Web and mobile advertising, free Wi-Fi, active Facebook and Twitter connections and innovative programs like the Shoptopia Network (Forest City’s customer affinity/frequent shopper program) are becoming almost as common expectations among potential tenants as property maintenance, marketing, security and frequent shopper programs.”
As retailers continue to add social media such as Twitter and Facebook and mobile advertising to their communications arsenals in order to more effectively engage their customers, mall owners will at the very least need to follow suit — if not lead the social media pack — in order to form landlord-tenant synergies designed to positively impact the bottom lines of each.
For a copy of the complete survey, visit alexanderbabbage.com/ChainStoreAge/Study.htm.