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According to a study released in July by Hill & Knowlton, 27 percent of Generation Y say they are influenced by an “online community or blog,” compared with 9 percent of Baby Boomers and 19 percent of Generation X. Meanwhile, traditional media continues to be important among all age groups, with 19 percent of respondents saying they are influenced by print articles and 12 percent by radio or television programs.
In the past six to nine months, retailers have joined social sites in droves. According to the publication Internet Retailer, 56.8 percent of the Internet Retailer Top 500 have a page on Facebook, 41.4 percent have a channel on YouTube, 28.6 percent are on MySpace and 20.4 percent are tweeting.
The most obvious and measurable effect of what Galloway has termed “social media optimization” is directing traffic and sales to a company’s Web site. Search engines are still the king of traffic, followed closely by the e-mail messages most retailers send out daily, but social media is growing quickly.
As a result, it is rare these days to find a fashion company with e-commerce that isn’t doing something with social media. Juicy, St. John, Tory Burch, Ralph Lauren, Gucci, Vuitton, Oscar de la Renta, Sears, Urban Outfitters, American Apparel, Topshop and Wet Seal are some of the better-known brands that have been at the cutting edge of using it in innovative ways to boost brand awareness and sales and communicate with their customers.
“Some sites are now getting 10 percent or more of their traffic from Facebook,” said Galloway. Two years ago, it was zero. The fastest-growing segment on Facebook is 45- to 55-year-old women, which is the sweet spot for luxury brands to target. Facebook is among the top 10 referral sites for more than half of the top luxury brands, he said.
Brands that have a strong social media optimization strategy — with a presence on all five sites or more — could be getting a third of their traffic from social media sites, according to Galloway. What’s more, he warned, companies that embrace social media could potentially have double the online traffic in the next few years versus those that don’t.
But traffic is just the tip of the iceberg. “Branding online primarily will happen through social media,” said Marco Corsaro, founder and chief executive officer of new-media consultancy 77Agency, which has been holding social media seminars for luxury marketers. “The only question is how big this will be.”
Among the agency’s fashion clients, the majority of traffic comes from people typing in the URL directly, the second from Google and the third from Facebook, he said.
Another benefit of social media is that it allows companies to understand their customers and get feedback from them, according to firms who use it.
Saks, Theory and Topshop are among the fashion companies that have created events or campaigns that mash together the online and offline worlds. “Integrating offline and online is something we’re doing more and more of,” said Topshop head of marketing Sheena Sauvaire. “Our customer is online all the time now. It’s increasingly the medium they’re using.”
The company was one of the first to have a widget on Facebook, which shows the latest looks each week. Shoppers can click through to the Topshop Web site to buy. Even before the company had an official page, about 20 percent of its online traffic was coming from Facebook — either from the unofficial page or the widget, said Sauvaire.