Blogging day 2: Social Media and it’s Impact on Retail

Social Networking is one of the major trends going into the year 2012. Between sources like Facebook, Twitter, or Myspace people connect with one another in a way unheard of to previous generations. We are so connected through social networking now, that it takes only a matter of seconds to be able to talk to someone on the other side of the globe. The retail and merchandising industries are smart to recognize this as a major trend, and just plain stupid to not take advantage of it. The outreach to new and old consumers is at the tips of their fingertips through social networking. A major example of how social media impacts these industries is how consumers can bad mouth a company and encourages change. If a consumer isn’t happy with the way a retailer is run or the products sold, they can very easily go online, gather a following, and eventually create change. “…Forever 21 was hit by a barrage of online complaints, a petition and publicity about one of its girls’ shirts which read, “Allergic to Algebra.” The retailer removed it the day after the story spread.” (Milne-Tyte, 2011). It can be so easy, with the concept of sharing, or re-tweeting, for one person’s negative opinion about a company to spread and do actual harm to the companies profits. Back in the day, people would have to go door-to-door to get petitions signed, but now it all at the click of a button. The social network is also a great way for companies to boost sales of their products. There was a study done by Ogilvy to measure the amount of spending consumers spent on fast food from exposure to advertisements through social media. “People who were exposed to social media marketing and PR spent 17% more in the fast food category.” (Sparrow, 2011). So many people are using social networks that it would be foolish to not try to reach consumers through it. This however, doesn’t apply to all social media advertising. According to another study done in April of 2011 done by Forester researcher and GSI Commerce, Social media barely impacts online purchases. “The research shows that social media rarely leads directly to purchases online — data indicates that less than 2% of orders were the result of shoppers coming from a social network. The report found email and search advertising were much more effective vehicles for turning browsers into buyers.” (Wasserman, 2011). Although online sales aren’t affected as much by social networking, they found that advertisements for flash sales and discounts greatly affected sales.  No matter what the outcome, social media has taken over the modern world by storm, and isn’t likely to fade into obsolescence soon. The more retail stores take advantage of the cheap and efficient way to reach the masses through social networking, the more successful they are likely to be.

Milne-Tyte, A. (2011, December 20). Social media impacts retailer decisions. Voice of America. Retrieved from http://www.voanews.com/english/news/usa/Social-Media-Impacts-Retailers-Sales-Decisions-135933968.html

Sparrow, M. (2001, October 20). New research shows social media marketing has strong impact on retail sales. Ignite social media. Retrived from http://www.ignitesocialmedia.com/social-media-measurement/new-ogilvy-research-shows-social-media-marketing-strong-impact-retail-sales/

Wasserman, T. (2001, April 28). Study: Social media has little impact on online retail purchases. USA today. Retrieved from http://content.usatoday.com/communities/technologylive/post/2011/04/social-media-has-little-impact-on-online-retail-purchases/1

Social Networks. Retrieved on February 2, 2012. Retrieved from http://avtecmedia.com/credit-union-marketing/social-networking/

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2 thoughts on “Blogging day 2: Social Media and it’s Impact on Retail

  1. whiteunt01 says:

    I agree, with social networking it is extremely easy to have your opinion heard and get others on your side. Your examples proof.

  2. maddwasabi says:

    i agree, it would be foolish for companies not business not to take advantage of the ad space. i believe more people are beginning to spend more time looking at a computer screen, than at a television screen.

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