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What Is Social Retail? Using Social Retailing To Sell More

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:

Introduction:

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.

What is social retail and 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.

What are some examples of social retailing?

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:

Paid Social Retailing

Free Social Retailing

Is social retail ethical?

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.

Social retail VS MLM (multi-level marketing)?

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.

What is a social retailer?

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.

Who uses social retail?

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.

What social retail strategy works the best?

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.

Summary

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.

About The Author:
Written By: The AppIntent Team
Published On: 2022-07-17
Last Updated: 2022-07-17
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