Try social networking

In-the-know retailers are joining social networks such as Facebook to better communicate with their customers and boost their brand presence in a hip and interactive way. Social networking offers retailers a smart and relatively inexpensive opportunity to get the word out about their company and tap into powerful word-of-mouth marketing. Think of it as maximum exposure for minimum investment. Experts say that while most companies are not yet seeing increased sales from their social-networking efforts, that should not take away from the significance of the payoff: greater customer engagement and increased traffic to the retailer’s own Web site.

Facebook in particular has attracted an array of chains, ranging from big hitters such as Victoria’s Secret, The Wet Seal and aerie to smaller start-ups such as multichannel Alpaca Direct. Applications run the gamut, ranging from creative contests and poll questions to giveaways to Facebook members who become a friend, or “fan,” of the retailer. To date, the ones that have caused the biggest splash are those that aren’t afraid to ruffle feathers.

Burger King caused a big stir on the social-networking scene in January with a Facebook promotion that allowed members to eliminate 10 friends in exchange for a free Whopper. Some Facebook members were amused by the concept, while others were insulted that they could be de-friended for a hamburger coupon. The offer attracted about 82,000 Facebook users in one week and resulted in 233,906 friends removed. Even though the application was disabled over privacy issues, the free publicity and enormous buzz surrounding the promotion was a big, big win for Burger King.

Insider tip

Although social networks have tended to center on younger demographic groups, they are now expanding into wider groups, such as career-based social networks, that matter to a broader base of retailers.

“Until recently, retailers considered social networks relevant only for the youth market, meaning that many have largely ignored them,” said Hung LeHong, research VP, Gartner. “However, as social networks expand to embrace ever-wider demographic groups, retailers need to ensure that they have a position on them.”