We constantly hear how social media is transforming our lives. Facebook twitter and YouTube are the hallmark of the next generation of web services that will make our shopping experiences easier and open up another revenue stream for retailers.
Well like the Facebook stock – this idea has tanked. Social media is a FREE service and FREE is a 4 letter word!
Twitter and facebooks millions and millions of tweets and faces DO NOT TRANSLATE INTO ANY SALES.
21% of consumers take pictures of products
18% text/call friends about products
17% scan bar codes
17% send picture to friends
11% compare prices
Foster Research in April of this year reported that out of the 77,000 on line purchases they reported on, LESS THAN 1% was a result of social links.
Meaning social media is useless to retailers. If recent trends continue, this will only get worse as more people use social media to send FREE pictures, the trend to purchase will also stay stagnant or decline. In these terms, social media is the WORST way for retailers to spend their advertising dollars as it produces the least return on investment.
Just look at Facebook Stock prices – prediction – it will never rise above $21.
The big picture on how people purchase via social media? By giving products away at or below cost.
Express retailer and many others tried marketing on Facebook by offering promotional offers. $15 off a $30 purchase, $30 off a $75 purchase and $60 off a $150 purchase – in 1 day, 17,000 people claimed the deal – A massive loss to all retailers! In business, we would consider this a LOSS LEADER – where we give away a small item or service in hopes it will attract the buyer back into the store to make regular purchases – however, social media with its FREE mentality and type of people it draws, simple do not take the bait. Instead they do not purchase and wait for such “deals”. This means disaster to any retailer. You cannot stay in business by competing in price and selling items below your cost.
So while you retailers “think” that you have millions of twits, Facebooks and links coming to your site, this traffic must be good because everyone says it is and with so many people generating so much traffic, you have to make money.
Sorry – FREE is a 4 letter word – social media simple is not a sales medium!