Social Media’s Role in Retail Growth

Introduction

Over the years, there has been a radical shift in the manner in which retail businesses are conducted, and how independent retailers and consumers interact. The introduction of the internet, e-commerce, as well as personal computers, has brought forth tremendous impact on the operations of retail businesses in the market (Rapp et al., 2013). Social media technology is gradually accelerating, and it is evident that it plays a significant role in retail businesses now and expectedly in the future. Bruhn et al. (2012) notes that owing to the fact that social media has become available, independent retailers have gained great benefits, which add value to their businesses, and consequently growth. This literature review will expound on the subject of the role of social media in the growth of an independent retailer.

Significantly, social media provides significant platforms, which an independent retailer can use in marketing his or her brand. Although it is evident that social media marketing is a topic that has been researched over the years, it has been studied only through experiments and theoretical research. Studies do not describe the significant benefits, which independent retailers gain from the social media marketing tactic (Pentina et al., 2012). In a bid to review the multi-disciplinary literature, it is evident that studies are focusing more on describing what social media actually means and also examining the factors affecting the behaviors of consumers, relative to social media networking. Despite having made an initial significant progress by researchers, there is limited development noted in this study area. More research needs to be conducted through, in a bid to providing a deep understanding of the significant long-term gains that independent retailers obtain from marketing through social media. In addition, more studies are also essential in progressing beyond predicted or even theorized outcomes in gaining real-life knowledge applications (Bruhn et al., 2012). This literature review puts into considerations, the gaps existing within the idea of social media marketing and thus, brings forth the necessity for future studies to purpose on exploring the significant growth and benefits gained by independent retailers from social media marketing.

Defining social media

In considering the role of social media as a tool for marketing, independent retailers should be obligated to understand all the aspects accompanied by it (Chen et al., 2011). It is impossible to understand social media before understanding it and for this reason, scholars such as Carr & Hayes (2015) provide a significant definition of the term as a collection of Internet-based applications, which build on technological, as well as ideological foundations of the Web 2.0, thus allowing significant creation, as well as exchange of user-generated content. Similarly, other scholars such as Heller et al. (2011) define social media as software tools, which purpose to create user-generated content, which can be shared. In order to establish a significant and successful marketing campaign through social media, consumers should be open to social media technology. On the other hand, independent retailers should purpose to utilize social media platforms, in order to reach their consumers easily.

Customer engagement through social media

According to Heller et al. (2011), customer engagement is often defined as a way of encouraging customers to relate to a brand and also share significant experiences with the brand. It is evident that approximately 80% of opportunities relating to customer engagement either are mishandled or even missed by independent retailers, yet every lost opportunity that is lost leads to a loss in revenue. Notably, social media provides a significant tool for independent retailers to have a solid engagement with their customers, and thus aid them to build communities (Chu & Kim,Y. (2011). Prior to engaging with their customers, an independent retailer should purpose to get customers from various social media platforms and thus, add them to their network. However, purposing to find them should not be regarded as enough; rather, an independent retailer should go ahead and interact with them. Notably, a higher level of interaction with potential customers aids in building loyalty, and also aids in making the customers to feel special. Heller et al. (2011), point out that of importance is the fact that engaged customers will always become advocates who would ensure that they endorse the brand to other individuals. Social media offers significant platforms that aid in endorsing many people, owing to the fact that just a post can reach thousands of people.

During the past few years, an independent retailer who purposed to engage with customers through social media had a competitive advantage. However, presently, this requirement is mandatory for the success and growth of independent retailer (Chu & Kim,Y. (2011). In accordance with the writings of Heller et al. (2011), one of the major reason behinds independent retailers failing to engage with customers through social media is owing to the fact that they do not have a serious thought regarding the needs, as well as consumption behaviors of their customers. It is worth noting that other than sharing significant information via social media to customers, independent retailers should as well be obligated to listen, understand, and also communicate with their customers (Verhoef et al., 2010). Overall, customer engagement majorly engages a two-way communication with potential customers, and not just publishing a content on social media platforms. Significantly, if independent retailers take note of the issue of customer engagement, they would experience significant growth.

Independent retailers should avoid lots of spamming when involving themselves in customer engagement, in a bid to sharing information, participating in conversations, as well as providing their experiences. Ashley & Tuten (2015) state that this is majorly because if potential customers were overloaded with information, they would prefer to unlike or even un-follow the social media sites, which independent retailers may be running for their business marketing. For instance, Facebook makes it possible for its users to decide on whatever they want to follow on their newsfeed, and also, from whom they want to see it from. In this regard, it is significant for independent retailers to have a careful planning, on what would be posted and when it will be posted. Notably, proper planning would assist independent retailers to reach more customers, thus, increase their sales, and consequently, grow their business (Verhoef et al., 2010).

Benefits of social media marketing to the growth of an independent retailer

The route of independent retailers starting to acquire benefits from using social media marketing started in the year 2007 when Facebook finally allowed independent retailers to create their brand pages. To date, this scenario has enabled independent retailer to realize the power of social media marketing, which then has made them to invest in more thought-out strategies that consequently lead to their growth (Sashi, 2012). Social media made it possible for various customers to communicate with independent retailers, and it is evident that the two-way communication has aided in creating a growth opportunity, which then has made independent retailers to start regarding social media as their main customer service channel. On the other hand, it is also clear that customers have turned social media as their best choice for shopping, which then has paved a significant purchase journey, which requires retailers to follow (Beese, 2019). The following figure presents consumers’ top choices for customer care:

From the indications in the above figure, it is evident that social media poses are consumers’ best choice for shopping. As such, it provides a significant marketing concept, which provides an opportunity for independent retailers to grow their businesses by increasing their sales and generating more profit from it (Beese, 2019). Clearly, people are social naturally and they collect or share significant information, which they regard to the vital to them. Through sharing information, an independent retailer reaches a wide market, thus leading to the growth of his or her business.

It is worth noting that social media increases reach, and also reduces costs through providing three significant advantage areas for customers. Within the three main advantage areas, it is recognizable and supportable that independent retailers are considering social media as the main channel for customer service. According to Jones et al. (2007), these three advantage areas include the following: first, an independent retailer is capable of providing unlimited information to his or her target customers without any form of human intervention. Secondly, an independent retailer can create significant interactions through customizing information, for various individual customers, thereby, creating room for customers to design products, as well as services, which meet required specifications (Rapp et al., 2013). Thirdly, social media allows significant transactions between independent retailers and their customers, and this would require human contact. For instance, research indicates that approximately 865 million across the globe check Facebook. It is not surprising that Facebook provides a significant channel for independent retailers to showcase their brand content, as well as voice, thus, increasing their sales, and consequently their growth (Trusov et al., 2009). In addition, it is also evident that social media marketing for independent retailers entail minimal losses, owing to the fact that they do not have anything that they could lose by having to involve themselves with the social media. Moreover, according to Jones et al. (2007), the time, as well as money, which they may need in creating their profiles, in order to start posting their brand content is often minimal, as compared to other channels for marketing. It only requires approximately six hours in a week or even just a few dollars for them to establish their presence on social media. For instance, Malthouse et al. (2013) note that through Facebook, an independent retailer can target a given demographic easily, and select preferred age groups, when sending advertising messages, or when he or she needs to test which group is best for conducting a specific business. By the aid of a “Driftrock,” independent retailers can make use of data, which is collected on Facebook, in order to enhance their growth (Hoffman & Fodor, 2010). Overall, it is evident that an independent retailer is able to reach more customers, in a cheap way through social media by using data. This aids various independent retailers to optimize their brands' campaigns through social media and consequently increases their business growth.

The future of social media marketing on the growth of an independent retailer

A significant and also interesting possible new introduction to many social media platforms can be an introduction of a “buy” button. Notably, Facebook and also Twitter are testing the “buy” buttons and thus, they are moving steps closer towards generating meaningful sales in the retail sector, based on five years of information collection on the shopping habits of consumers. Malthouse et al. (2013) note that independent retailers are hopeful that this feature will significantly make it easy for consumers who are impulse shoppers, for them to be able to purchase everything. On the other hand, it also made it much easier for independent retailers to sell their products on social media, for purchase by consumers (Rapp et al., 2013). Based on the customers’ viewpoint, this makes it easy and convenient to buy something, which they cannot reach in person whilst browsing through social media, thereby, creating a significant opportunity for impulse buyers and also for consumers who do not prefer going to independent retailer websites separately. Notably, independent retailers also find it easy to calculate and measure their Return on Investment (ROI). Although measuring ROI is always difficult, the “buy” button makes it very easy (Hoffman & Fodor, 2010).

It is significant to take note of the fact that the gradually growing popularity of social media and its rise in becoming the first activity online makes it provide significant platforms where independent retailers can achieve a wide awareness. It is evident that big brands do pay for social media, as they drive up the advertising price (Hanna et al., 2011). This then indicates that in the future, independent retailers will face a high cost of paid marketing when they use social media, and as such, the prices of their products will rise as well. However, there will still be sufficient room, meant for unpaid marketing. In this regard, independent retailers will have to be creative enough when purposing to produce content that can be noticed by various users in social media platforms, and who are seeing many things in their account news feeds. According to Lamberton & Stephen (2016), it of utmost importance to consider the fact that presently, the cost involved in paid marketing is very low, and that is very advantageous to make use of it, and at the same time make significant use of engaging unpaid marketing, in a bid to maximizing the visibility of an independent retailer’s brand on social media. It cannot be denied that social media allows people to be interconnected, and poses as a marketer’s dream, owing to the fact that it allows independent retailers to develop, grow, and even evolve (Statista, 2019). This is provided in the following figure as proof.

The above figure provides a significant indication of the occurrence in the years between 2010 and 2018, and a projection to 2021. In this regard, it is evident that the amount of social media users will continually grow, and as such, it can also be noted that social media will continually create significant visibility for independent retailers in the future, thus implying that they will continually experience significant growth in their businesses (Statista, 2019).

Significantly, the effective way of conducting social media marketing is quite broad. However, scholars provide a more appropriate solution. He notes that the most appropriate way of conducting social media marketing is through video, owing to the fact that it provides the most significant way of communicating with social media users (Wilson et al. 2012). According to Castronovo & Huang (2012), approximately 75% of users on social media would prefer watching a video rather than looking at a picture or even reading a written photograph. It is notable that when an independent retailer showcases his or her products using a video, customers will understand the content of the showcase more easily. In an instance where an independent retailer requires demonstration, video marketing will pose as the most significant and effective solution. This makes a lot of sense and thus, provides a way for independent retailers on where to go when evaluating their plans for marketing (Malthouse et al, 2013).

Overall, to end with significant examples that relate to the future of social media marketing and what it would mean for independent retailers. Ross (2015) pointed out that Edgee founder, Markus Maier described the present social media as platforms, which change the manner in which people share, and also consume the online content. Significantly, Edgee allows posting with more detailed context, as well as in-depth exploration. Noteworthy, this would be significant for independent retailers when they try to reach out to their potential audience, whilst promoting substance over show (Rapp et al., 2013). Through this way, it becomes easy for independent retailers to demonstrate their field of expertise, and also gain significant attention using their unique insights. This is believed to be genuine and it as well provides an organic way for independent retailers to develop understanding, as well as trust with their potential online clients. Arguably, Hanna et al. (2011) notes that in the future, social media will offer much focus on a specific group of people, and it will become smaller, as it will provide independent retailers will good opportunities of being heard and also seen in specific ways. Of importance will be the fact that they will target exactly what they desire more effectively. Consequently, this will lead to the growth of independent retailers (Rapp et al., 2013).

Conclusion

From the above provision, it is clear that social media plays a major role in the growth of an independent retailer by providing a significant marketing tool, which aids in meeting a large audience, thus increasing sales and consequently, leading to significant growth. The introduction of the internet, e-commerce, as well as personal computers, has brought forth tremendous impact on the operations of retail businesses in the market. Moreover, social media technology is gradually accelerating, and it is evident that it plays a significant role in retail businesses now and expectedly in the future. During the past few years, an independent retailer who purposed to engage with customers through social media had a competitive advantage. However, presently, this requirement is mandatory for the success and growth of an independent retailer. It is evident that the amount of social media users will continually grow, and as such, it can also be noted that social media will continually create significant visibility for independent retailers in the future, thus implying that they will continually experience significant growth in their businesses.

References

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