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  • Report Says Social Media Overrated as Retail Information Sources

29th June 2011

Report Says Social Media Overrated as Retail Information Sources

kubasprimediaRetailers who focus on getting their product and services messages out on Facebook and Twitter are probably spending time and effort in the wrong area, according to data sourced from KubasPrimedia’s Major Market Retail Report (MMRR) study – a survey of over 1,500 consumers on their retail shopping habits and store preferences.

“Social media, like Twitter and Facebook, has been heavily hyped in advertising and promotion circles,” said Ed Strapagiel, Executive Vice President of KubasPrimedia. “MMRR shows that retailers and product manufacturers who are relying on social media to sway consumer purchase decisions may be misguided.”

“When consumers are researching a purchase online, over 70% visit retailer and product manufacturer websites. Only about 25% turn to social media sites or blogs for product or shopping information,” said Strapagiel.

KubasPrimedia has been conducting retail analysis for over 15 years. MMRR, based on surveys of Canadians in Vancouver, Edmonton, Calgary, Toronto, Ottawa, and Montreal, examined shopping behaviour in 33 product categories at 147 retailers to determine competitive retail metrics, such as market coverage, shopping levels, drawing power, loyalty, and retailer performance scores.

MMRR found that that 77% of Canadian consumers “often” or “sometimes” visit retailer websites and 71% visit manufacturer websites to get information about upcoming purchases. Only 27% use social media and just 23% use blogs. Comparison-shopping, such as pricing a specific item, is the most popular online retail-related activity, with 76% of consumers doing so “often” or “sometimes”. Comparison shopping activity is high across all demographic groups.

“Given consumer behaviour, a company’s website is still by far the top online priority for retailers,” said Strapagiel. “Retailers that pursue other digital marketing avenues risk taking resources away from where they’re most needed”.

While services like Facebook, Twitter, and WordPress are free, they are not cheap, says Strapagiel, “Utilizing social media properly and effectively requires time, money, and talent. Retailers have to focus on what will provide the best return on investment considering where their customers are turning to for information.”

The MMRR analysis also revealed that 63% of consumers “often” or “sometimes” search for coupons and promotions online, and that 45% go to “daily deals” websites like Groupon. Strapagiel advises that retailers need to tread carefully with online coupon services. “The ‘daily deals’ websites are tempting, but most of the advertisers are services, like restaurants and health spas, that can afford coupons of 50% off or more. Most goods retailers can’t sustain such deep discounts because the economics of the business are different.”

For the first time, online has surpassed flyers as the top-rated source of product and shopping information. Nearly 75% of consumers rated online shopping information as “good” or “excellent”, edging out flyers at 70%.

“Consumers have increasingly been going online to get their product and shopping information”, said Strapagiel, “so it’s not surprising that online has finally become the top-rated source. “The Internet offers retailers many different types of promotional opportunities. According to Strapagiel, “How well a particular retailer takes advantage of different online approaches depends on who they are, what they sell, and who they sell it to. A company’s online strategy can’t be based on one size fits all.”

This entry was posted on Wednesday, June 29th, 2011 at 5:48 am and is filed under Business News, National News, Research Studies, Social Media. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.

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