To best understand social retail, we are going to take you through a brief history of the internet trends from where we believe social retailing got its roots. Then we will answer some of the most commonly asked questions about social retail.
In this article, we we will cover:
We will start back in the early 2000s, when blogging and bloggers started to emerge as what would eventually become one of the main sources of digital information over the next decade. Bloggers were individuals, groups of individuals, or small companies, writing short content (blogging) on particular topics of interest and posting it on their website (blog). For example, Gizmodo (founded in 2002) was a blog that would write about the latest trends and products in the technology (or gizmo) space.
But what does blogging have to do with social retailing? Well by 2005, over 32 million Americans were reading blogs daily, and by 2010 that number had more than doubled. These readers trusted the blogs they read daily for informational needs, and when a blog recommended a particular product or service, very often that business would see sales skyrocket. As a result of this, many companies (especially retail companies) wanted to get in on the trend for their product.
Retailers began to reach out to bloggers asking for them to review their products often in exchange for free products or monetary compensation. The bloggers then shared (or endorsed) that retail product to their social following of blog readers. Negative reviews on blogs could kill a company, and positive ones could make it a star. This was probably the first example of online social retailing.
However, with the rise of companies like Facebook and Twitter, social media started to steal eyeballs away from bloggers. People started getting their news and purchasing inspiration from social websites like Reddit, Facebook, LinkedIn, Twitter, Pinterest, and Youtube. As social media rose, blogging declined, and product recommendations evolved from a static blog post, to shareable videos, photos, and posts about products and experiences; this gave birth to social retailing.
In short, social retail is marketing and advertising practices that use social media to put a product in front of a mass audience. However, social retail as a concept is difficult to define as it encompasses retailers trying to sell their products through a combination of various marketing techniques ranging from: word of mouth promotion, product endorsement, product placement, trust based marketing (reviews and recommendations), and more.
Social retailing is when all of those techniques above are deployed through social media and is used to drive sales to a business, typically through exposure to social media users. With social retail, a retailer recognizes the importance of, and actively uses, social media to create visibility and positive mentions of their product or brand.
One way to think of it is that in the early 2000s, Pepsi might have paid buckets of money to show Britney Spears drinking their cola in a Super Bowl Commercial; knowing that this would increase visibility and sales of their product. However, nowadays a celebrity in a commercial is not enough to grow awareness, so a company like Pepsi wants to show your friends, friends of friends, celebrities, and the influencers that you follow on social media, drinking a Pepsi cola as well. How they get that to happen is part of their social retail strategy.
There are countless different examples of social retailing, some come at no cost to the retailer as they are generated by genuine positive customer experiences, while others are paid mentions that a retailer might engage in. Some examples of which are listed below:
1. A retailer sees that a certain social media influencer is popular with their target demographic, and pays that influencer to mention, showcase, or otherwise discuss their company or product .
2. A Youtube user with a lot of followers creates weekly unboxing videos where they show themselves opening the latest gadgets, what the box looks like, what is inside the box, how to assemble the product (if applicable), and how it works. The retailer pays the influencer, or gives their product for free, in exchange for having the user create a video of their product being unboxed and reviewed.
3. A Facebook user with thousands of followers agrees to mention a retailer on their Facebook feed, Facebook live, or Facebook stories in exchange for monetary compensation.
4. A popular Facebook influencer agrees to list a retail product for sale on Facebook Marketplace in exchange for a percentage (commission) from each sale, under the assumption people will buy from the influencer more easily than from the retailer directly.
5. Asking your social media followers to like, subscribe, or follow you on social media, or to share with their friends in exchange for a gift, reward, contest entry, or future discount at your store.
6. Paying or otherwise rewarding social media users to leave positive reviews on Google, Facebook, or other review websites, or paying a user to remove negative reviews they have previously left from the site.
1. A real customer of yours posts on social media about how much they love your product and how they use it.
2. A customer who had a bad experience leaves a negative review, your team addresses their concerns and publically makes the situation right, where all future customers can see.
3. A customer creates a video where your product is mentioned or highlighted without you ever requesting to do so.
4. Your product is mentioned in a meme or viral internet trend without paying for it (this has happened to Mountain Dew or even Vans sneakers).
5. Someone is looking for recommendations on Facebook and your product is mentioned without paying for it.
Social retail can be ethical or unethical depending on how it is used, much the same way that a pen can create something beautiful or poke out an eye out.
If a tobacco company pays a Tiktok user who has a lot of underage fans, to say I love these new Fruit Punch flavored e-cigarettes and they see a boost in sales of their product as a result. This would be extremely unethical.
Likewise, some social retailing has been done in the same way multi-level marketing (or pyramid schemes) have been conducted in the past. Where the people on the top (early joiners) make a lot of money, and the people at the bottom (late joiners) lose out. This is also unethical
However, if a customer writes to you telling you how much they love your product, and you ask them to share their experience on Facebook or leave a positive review on Google, few people would consider that unethical.
People often ask if social retail is multi-level marketing (MLM)? While some people consider social retail to be a very shady practice, and some draw direct comparisons to multi-level marketing (MLM) which is notoriously controversial to say the least. Social retail is not multi-level marketing, and the terms should not be used interchangeably.
Social retailing is a very broad term for a variety of ways for stores to get their products sold using social media. Very few forms of social retailing use a MLM approach, and not all social retail is controversial. Saying all social retail is bad because some people took a MLM approach, is the same as saying all marketing is bad because some have used a MLM approach.
Another reason social selling or social retailing is compared to MLM is likely due to the commissions influencers get for selling products, sometimes resulting in influencers aggressively pushing their fans to buy products they have never tested.
A social retailer is someone (usually a store) that uses social retailing techniques to increase the sales they generate or to improve their brand awareness. With so many people using social media, stores should consider becoming social retailers as part of their marketing strategy, but they should be very careful not to deploy questionable practices as consumers these days are less forgiving than ever.
Almost everyone uses social retail in some way shape or form. This might sound like a blanket statement, but if you have any form of social presence (even a Facebook page) you are doing social retail. Even if you do not have a social media page, you are still social retailing - just not very well.
Think about it, the Wendys Burger Chain has gone viral multiple times over the past few years by having their Twitter account make fun (in a very funny way) of the competition. By winning a battle of wits, they are not only making people laugh, but also making people think about their brand, or even subconsciously favor their brand VS say Burger King.
Study after study has shown that when your brand is viewed more favorably, it leads to more sales. Unfortunately for some, the opposite is also true. Have you ever seen a company have a complaint on their Facebook page that still was not addressed after weeks, or even months? Does that give you confidence in the brand? Does it make you want to buy from them? As mentioned above, even by not social retailing you can be social retailing.
The social retail that works the best is the one that does not seem like you are selling at all. Using techniques that make your customers feel as though they are part of something good, fun, cool or exciting, all while making it seem natural are the most successful.
When a customer wants to share your brand, or something related to your brand, without being incentivized to do so, and this drives more sales for your brand or products, you have mastered social retailing.
Social retailing has been around for a long time, but has become more powerful with the emergence of social media. Social media in and of itself is not a negative thing, however some people have used very questionable or unethical techniques for social selling. To succeed in your social retailing strategy, find something that your brand does that is shareworthy and use that to promote yourself. Do not try and force or pay for customers to sell your product, because once the money dries up, so will your brand equity.