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The Socialized Shopper

The Socialized Shopper

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Published by Derek E. Baird
It’s no secret that social media is one of the hottest topics on marketers’ radars. What isn’t widely known is how to use social-media contacts to drive sales directly.

People of all ages are using social-networking sites and other user-generated content platforms at astonishing rates, and brands are scrambling to create social-media strategies both as part of their overall marketing and in isolation.

In fact, Forrester Research estimates that social media marketing budgets will grow 34 percent per year from 2009 to 2014 — faster than any other form of online advertising.
It’s no secret that social media is one of the hottest topics on marketers’ radars. What isn’t widely known is how to use social-media contacts to drive sales directly.

People of all ages are using social-networking sites and other user-generated content platforms at astonishing rates, and brands are scrambling to create social-media strategies both as part of their overall marketing and in isolation.

In fact, Forrester Research estimates that social media marketing budgets will grow 34 percent per year from 2009 to 2014 — faster than any other form of online advertising.

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Published by: Derek E. Baird on Jan 26, 2010
Copyright:Attribution Non-commercial

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08/01/2014

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JANUARY/FEBRUARY 2010
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t’s no secret that social media is one o thehottest topics on marketers’ radars. What isn’twidely known is how to use social-mediacontacts to drive sales directly.People o all ages are using social-networkingsites and other user-generated content platorms atastonishing rates, and brands are scrambling to createsocial-media strategies both as part o their overallmarketing and in isolation.In act, Forrester Research estimates that social-media marketing budgets will grow 34 percent peryear rom 2009 to 2014 aster than any other ormo online advertising. Moreover, within fve years,
The
 
Socialized
Shopper
New research shows how social media is changingshopping behavior.
shopping experiences across 10 product categories.Then, 500 respondents who had experienced socialmedia brand contact during a shopping experience(called “Social-Media Shoppers”) and 500 respondentswho had not (“Non-Social Media Shoppers”)completed a ollow-up interview that delved moredeeply into shopping behaviors and attitudes. Thisprovided the opportunity to identiy the dierencesand similarities between these two groups o people.
It’s big and growing: There are 95 millionsocial-media shoppers in the United States.
Morethan 40 percent o U.S. adults are using social mediain their shopping experiences, and this trend appearslikely to continue. When asked how oten socialmedia is used in shopping versus a year ago, almost30 percent said they are using it more, while threepercent said they are using it less.Currently, social-media contacts are made in avariety o orums. For 35 percent o shoppers, theprocess includes — or starts with — online search.What’s surprising is that 30 percent read user reviewson retailer websites as a part o the shopping process.So, who are these social-media shoppers? Theycome rom all walks o lie, but the study uncovered aheightened relationship between age, education leveland the use o social media in shopping. As expected,because they’ve grown up using technology, peopleunder 35 and those holding college degrees are mostlikely to be social-media shoppers.Interestingly, the study also revealed that social-media shoppers are not necessarily very “activelysocial.” Only about one in our social-media shopperscontributes anything to a conversation about a brandor product; the rest view content posted by others. So,a very small group inuences a very large group.
Social-media shoppers are more engaged withmedia and spend more time shopping.
Importantly,shoppers who access social media in their shopping
RESEARCH REPORT
social media budgets will be larger than those orboth mobile and email marketing activities.Despite all o this increased attention andspending, we actually know very little about what isperhaps the most critical actor in achieving positiveROI through social-media marketing: How people’sbehavior in shopping or and buying products isimpacted by social media.Leo Burnett and Arc Worldwide recently felded aresearch study that uncovers this connection. More than3,500 online U.S. respondents completed interviewsabout media contacts that they may have in their
 
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process still use historically prevalent contact channelssuch as television, radio, magazine, newspaper adsand direct mail, as well. In act, they tend to engageeven more with these channels
(see chart one).
Social-media shoppers see more value in theopinions o other everyday people as useul input intheir shopping decisions. For example, 39 percent o social-media shoppers strongly agree that they can learna lot more about a brand byseeing what everyday peopleare saying about it onlineversus only 22 percent o non-social media shoppers.Social-media shoppershave broadened the set o sources they use or validationand are seeking additionalinormation beyond whatmarketers, manuacturers,and retailers provide.Incorporating all o theseadditional social-media sourcesinto shopping takes time. Inact, social-media shoppers arespending a signifcantly greateramount o time shopping. Theirgreater time investment doesnot, however, automaticallylead to a similarly signifcantdierence in what they spend.While other researchshows that shoppers gaininginormation rom retailer and manuacturer websitesare likely to buy more expensive eatured products,we fnd that social-media shoppers are only a bit morelikely to spend more
(see chart two).
Social media impacts behavior throughout theshopping process.
Television, print, magazine, directmail and online research brand contacts are most likelyto take place at the beginning, and in-store contactstend to spike at the end o theshopping process, but socialmedia holds steady throughout
(see chart three).
This suggestssocial media needs to playmultiple roles in shopping asthey are tapped at many stagesduring the path-to-purchase.
Social brand-contactsare a communal activity.
Toreveal why dierent typeso media are accessed byshoppers, respondents wereasked to rate a series o motivations or using mediain their shopping. Creating aperceptual map o fndingsvalidated two obvious, butunproven, benefts o usingsocial media in shopping.Specifcally, social mediaenables shoppers to gather theimpressions and analysis o others while channels such as
ource 
:
 Arc Worldwide Social-Media Study 
Chart One
Social-media shoppers incorporate more media channels into their shopping process
Non-socialmediashoppersSocialmediashoppers0 2 4 6 8 10 12
Chart Two
Social-media shoppers spendmore time shopping, and to alesser degree, more money
ource 
:
 Arc Worldwide Social-Media Study 
Time spentshoppingPurchaseamount150100501327211684
n
 Social-mediashoppers
n
 Non-social media shoppers
4.37.53.0
n
 Social-mediachannels
n
TV, Radio, Print,Direct, In-store,Website
 I 
ndex 
:
Social-Media Shopper Group / Total Online Adults
 
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JANUARY/FEBRUARY 2010
ource 
:
 Arc Worldwide Social-Media Study 
Chart Three
Social-media contacts run throughout,while other contacts occur early in the shopping process
40302010
Very beginningof shoppingprocessRelativelyearlyMiddleRelativelylateVery endof shoppingprocess
television, print and radio allow them to orm theirown impressions and analysis
(see chart four).
Thisintroduces a signifcant point regarding the “wisdomo the crowd.”With so ew people actually contributing to theconversation, the early adopters and posters have aheavily weighted inuence on the message. Theirimpact is the greatest and can become sel-perpetuating.
Social media’s impact on shopping varies widelyby category.
Nearly 50 percent o people shopping orcomputer hardware/sotware and books are likely toincorporate social media into the shopping process.With greater purchase risk and reward, greater valueis given to the opinions and advice o others.In contrast, only nine percent o people shoppingor laundry detergent and sot drinks are likely to usesocial media. Conventional wisdom might suggest thisis because people don’t seek peer reinorcement whenbuying lower-involvement, commodity-type products.However, an argument could be made thatengagement with social media contacts in suchcategories is low simply because those contacts aren’tas readily accessible or heavily promoted. I true, thispresents a ripe opportunity or both brands and retailers.
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It’s clear that it’s not enough or brands simplyto have a social-media presence — a Facebook anpage, Twitter account or corporate blog, or example.I brands truly want to connect with shoppers andimpact their ultimate purchase decisions using socialcontacts, they must develop strategies that continuallyengage with shoppers throughout the process.Although the “right” approach will undoubtedlyvary rom brand to brand, here are a ew guidingprinciples that marketers can reer to when devisingtheir social-media plans:
• Monitor constantly, listen early and respondregularly
. People are constantly talking about brands(on social-networking sites, blogs or ratings/reviewssites, etc.), to the tune o hundreds o thousands o conversations per day.As a result, much like Best Buy with its @TwelporceTwitter account, brands should: Monitor social mediachatter with regularity; listen in real time to consumercomments (both positive and negative); incorporatethat eedback into their marketing activities; provideanswers and advice; and, when appropriate, engagepeople in urther conversation.
   S   h  a  r  e  o   f  m  e   d   i  a  c  o  n   t  a  c   t  s   t   h  r  o  u  g   h  o  u   t  p  r  o  c  e  s  s
 In Store/ Word of Mouth Social Media OnlineResearch TV, Radio,Print

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