Video streamlining and social networking are among the tactics online retailers are utilizing to engage shoppers, increase shopping trips and build loyalty. A new study by Cisco Systems quantifies the increased use of these tools, while the Advertising Research Association evaluates their effectiveness.
The Cisco study found that 67 percent of online retailers provide a venue for customer reviews and ratings, 63 percent offer some form of online shop with a friend feature, and 41 percent provide moderated message boards. In addition, 86 percent of online retailers use some form of video during the shopping experience, which is an increase from 52 percent a year ago. Just 26 percent of the retailers provide music, which are primarily clips of downloadable songs, according to the Cisco study.
"As retailers look to provide a more interactive, engaging experience and as video becomes more ubiquitous, retailers will start to use a YouTube type approach to connect with and get closer to customers," says Mohsen Moazami, vice president of Cisco retail and consumer products. "We believe video is driving an increase in customer loyalty and profitability," he concludes.
Yet according to the Advertising Research Association, new forms of advertising, such as streaming video, present an unclear value proposition to many advertisers. In exploring new ways to define marketing strategies, the foundation released, "The Online Advertising Playbook."
Among the example in the Playbook are how Sprint and Procter & Gamble have used online word of mouth to introduce products to consumers. "Many advertisers are uncomfortable with new forms of advertising," says Bob Boracci, CEO of the foundation and former president of the ad agency, Leo Burnett International.
"We can take a TV commercial from 'Desperate Housewives' and stream it on Yahoo, but we do not know if it will give the same results. Yet we want to know if we are engaging anyone, and how effective that is." The information applies as much to online retailers as it does to suppliers that are now reaching consumers online.
The Playbook covers multiple online advertising channels and strategies, including behavioral targeting, different aspects of search marketing, rich media ads and the tactics of building relationships through email marketing and word of mouth campaigns.
One example in the book discusses how Procter & Gamble's Tide brand developed an effective word of mouth campaign to introduce its Tide Coldwater product as an environmentally positive detergent that would appeal to energy conscious consumers. P&G started sharing information on the benefits of cold water washing with the Alliance to Save Energy, a Washington, D.C. based environmental advocacy group.
The Alliance emailed that information and favorable mentions of Tide Coldwater to its members. The emails helped to drive consumers to a microsite at Tide.com, where P&G offered information on the benefits of cold water washes, let visitors register to request product samples, and offered an online calculator, designed like a washing machine dial, that invited visitors to estimate how much energy they could save by washing laundry in cold water.
At the same time, P&G also donated $100,000 to the National Fuel Funds Network, an organization that works with state and local governments to help low income families in different regions of the country cut the cost of energy bills. It allocated funds to regions in proportion to the percentages of people from each region who had registered at Tide.com. This tactic encouraged visitors to use the microsite's, "send to a friend," email feature.
Within two months, P&G reached its goal of distributing one million samples of Tide Coldwater. "P&G broke new ground, adding a social networking touch," according to the Playbook. "Friends received personalized emails, with site links and opportunities to take the Coldwater Challenge themselves and request product samples," says Boracci.
The book also covers how Sprint Nextel, the cell phone and wireless communications company, elicited the participation of bloggers in a product promotion covering a variety of industries, including advertising, media, marketing and information technology.
Sprint provided the bloggers with full use of a Samsung A920 cell phone for six months, and simply invited them to write what they thought of it on their blogs, which they did. The campaign generated nearly 400,000 Google searches for the phone, meeting Sprint's goal of spreading the word.
But attempts to use new marketing channels and strategies do not always work, Barocci warns. "There is so much to be done in emerging media, every time a new medium attracts people, the assumption is that it is a new advertising medium. But that is not necessarily true."
In its study, Cisco rated Toyota Motor Sales' Scion brand as the leader in engaging online consumers under the age of 35. Part of what sets Scion apart is its use of social networking and community participation, according to Cisco researchers.
Scion has a section on Scion.com devoted to registered users. "Scion.com also offers customers the opportunity to have a one on one chat with a Scion customer experience representative," Cisco says. "In addition, Scion sponsors a variety of special events for its customers throughout the country. Owning a Scion enables a buyer to become part of a community that feels like an exclusive club with a unique lifestyle that is supported through Scion.com."
Information in this article was edited from stories on InternetRetailer.com.
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