Retailers told to forget social media

Discussion
Source: Vat19
Jun 08, 2018

At the Internet Retail Conference and Expo 2018 (IRCE) in Chicago, Jamie Salvatori, founder of Vat19, tore down some myths about the efficacy of social media marketing.

“Is social media worth it?” Mr. Salvatori said. “I would argue that it’s not. … I’m talking about the creation and posting of so-called organic content for your company or brand. The promise of social media was, ‘I make all this content and I can put it up there and I can build this audience, I’m going to build my brand, I’m going to build my sales …’ I’ve been making these videos for 12 years. It doesn’t work that way in my experience too much.”

Vat19, an online store for irreverent gifts, distinguished itself with its YouTube videos. The company has five million YouTube subscribers (which pushes 60 percent of its orders). But Vat19 also has 202,000 Facebook followers (who account for only 1.4 percent of sales) 185,000 Instagram followers (who make up 0.3 percent of sales) and 41,000 Twitter followers (who make up zero percent of sales).

He noted that while his YouTube channel had resulted in the most conversions, it was a professionalized operation with 10 full-time employees on which he spends $15,000 to $20,000 a month for ads — countering to the notion that creating organic content is easy and free.

While Mr. Salvatori said that advertising on social media could work, he doesn’t buy building a huge audience on Facebook, Twitter or Instagram as the path to huge returns, and sees it as unrealistic to expect a piece of content to go viral.

“How much money should you spend on creating organic content that gets less than 10 percent reach? Not much,” Mr. Salvatori said. “Why bother trying to build your own Facebook page, your own Instagram? Now if you find a platform that really works for you like YouTube works for us, yeah.”

“You must have liability insurance, but you do not have to have a social media presence,” said Mr. Salvatori.

DISCUSSION QUESTIONS: Do you agree with Jamie Salvatori’s assertion that creating content for social media — or even having a social media presence — isn’t worth it? Should businesses demand that social channels achieve a certain level of conversions to justify investing time and resources?

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"Organic social is not the ideal direct response channel but it is part of an overall strategy that helps you tell your story..."

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24 Comments on "Retailers told to forget social media"


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Dr. Stephen Needel
BrainTrust

We often take the data that shows how much time people spend on social media and think we (as retailers or manufacturers) have a claim to some of that time. For some people (a very few), spending time with the toilet paper and toothpaste and cereal brands is fun, but I doubt we’ll get much benefit from worrying about them. Businesses which depend on word of mouth or friends’ reactions (fashion, entertainment, durables) may benefit, but not consumer packaged goods.

Lyle Bunn (Ph.D. Hon)
Guest

The Vat19 social media experience is all too common. Business development includes marketing, which is making consumers want to buy what you are selling at the price you want to sell at, and selling, which is activating buying requests and conversion. In stating his sales results from various social media platforms Vat19’s founder has confused marketing and selling. He did not indicate their engagement with fulfillment platforms such as Amazon, eBay or their own commerce site, which tells me that that too much has been expected of social media. As privacy legislation hits North America on the model of GDRP in the EU, firms that anchor their marketing on social media and email campaigns will hit hard times.

Charles Dimov
Guest

That’s NOT what he is saying! Jamie isn’t saying abandon social or content. What he is saying is don’t spend your money on doing it purely because everyone else is doing it, or based on some principle. He expressly says “find a platform that really works for you … like YouTube works for us.” Too many retailers and marketers try to be everywhere and do everything. Better to focus on a few channels — and do them exceptionally well — than purely doing a mediocre job at a wide variety of channels (same argument I have about most unified commerce vendors).

As for conversion levels, this is a judgment call. Every marketing leader has to benchmark what is acceptable to them, and set targets. Watch the benchmark reports … that’s probably your best bet here!

Phil Masiello
Guest

I totally disagree with this assessment. I would seriously doubt if 100 percent of the YouTube subscribers are unique. Each channel supports the other channel. You have to look at social through all of the channels that feed and support each other. But certainly social will not work if your content is poor.

I am sure that the YouTube videos that are generating 60 percent of their sales are being seen on Facebook and Instagram and that is driving the viewership. The other part of this is who your audience is.

Vat19 has a very, very young audience and Facebook skews a bit older as does Instagram. So for his business, these channels probably would not drive conversions. But that does not mean they should not be used by others.

Nikki Baird
BrainTrust
So, three things. One, You have to use the right social media channel for your users. To say “all social media doesn’t pay” when Vat19 is clearly getting benefit from YouTube is misleading. YouTube counts as a social channel. But his customers aren’t going to be found on Facebook, so I agree that it’s not worth it for him to invest there. That’s not true for other brands who appeal to different demographics and psychographics. There are plenty of beauty brands who would take serious issue with the idea that Instagram is not a good selling channel. Two, I think you have to think of a lot of social media presence as a more interactive version of the brand-building/brand-awareness kind of advertising that used to happen on TV. You have to be where your customers are. But that doesn’t mean you have to relentlessly promote to them every place where they are. Use the social channels you’re in, in the way they are meant to be used. Facebook is meant to share stories. So, share… Read more »
Ed Rosenbaum
Guest

You are right Nikki. You have to be where your customers are. And they are on a social media platform. Find the right one and go for it.

Michael La Kier
BrainTrust

What’s the definition of “worth it” and what’s the goal? The best thing about digital is that it is measurable … and the worst thing about digital is that it is measurable. That being said, attribution is not always easy to deconstruct. Fun, distinctive content helped not only drive sales, but helped Mr. Salvatori build a brand via social media for his “irreverent gifts.” This would have been hard to do without social media. But as with every medium, metrics should measured to ensure objectives are being met.

Ryan Mathews
BrainTrust

We have to stop looking for magic wands. Brands differ. Products and services differ. And most importantly, target consumers differ. Retailers need to understand how to best communicate specific messages to specific audiences. For some that may mean creating content for social media, and for many that may not be the case. As to the conversion question, again, it all depends on who you are and what you want to accomplish. Maybe, for example, you are interested in brand reinforcement or changing the existing perception of your brand. In those cases short-term conversion rates may be meaningless. But if, on the other hand, you are focused on just moving units, conversion becomes the gold standard for evaluating social channels.

Ian Percy
BrainTrust

As always, well said Ryan. We all wish there was “A” magic wand out there!

Ian Percy
BrainTrust

Yesterday many of us contributed comments on the invasive “noise” retailers are forcing customers to endure or run from. Social media content for the most part is more of the same. I have managed to stem the flow of this noise down to relatively few sources. Most of those would be gone too if I were a little braver in unsubscribing or blocking. There are three social media postings that are actual destinations for me every week. I’d miss them if they went away. Three.

Ask yourself how long it’s been since you read content that made you think, that was something you hadn’t heard before or that was something you wanted to learn more about. Mr. Salvatori referred to “organic content.” What the heck is that? Thank goodness he declared it almost worthless. The definition of organic is “something derived from living matter.” That includes fertilizer (to be polite). Now, if it meant truly “original” thoughts and ideas coming from a creative and insatiably curious human being, I’d sign up in a heartbeat.

Lauren Goldberg
Guest

Each social channel has a role to play and these all complement each other. I think Jamie is right-on about finding the one that works best for you and investing most of your resources there. For example, Instagram might be better for more visual brands (fashion, tech), but Twitter is a key customer relations tool for others (retail, travel). With the rapid evolution of social, I don’t think it’s wise to simply ignore social as a marketing tool.

Georganne Bender
BrainTrust

Should retailers abandon social media? Of course not. Social media has become mainstream marketing; it’s today’s newspaper, and it’s an important way to engage and connect with consumers.

Should you worry about not having thousands of followers? Nope. Love the 500 you have. I know many indie retailers who sell directly on their timelines, or in private Facebook groups, and are doing quite well. Social media works for them because it keeps them close to customers.

Of course, social media is now pay-to-play. Facebook ads when done well, work. Case in point: I know funeral directors who have spent less than $500 on a Facebook ad who enjoy a return of $15,000+ in pre-need sales. That’s huge.

Retailers need social media. Vat19 concentrates on YouTube and that makes sense because it works for the brand. Retailers would be well advised to choose one or two social media platforms and do them very well.

Laura Davis-Taylor
BrainTrust
Laura Davis-Taylor
Founder, Branded Ground
3 years 11 months ago

I’m following Nikki 100 percent on this one. There are SO many factors that make this blanket statement irrelevant to many. Certain categories — like beauty and fashion — are killing it via social media channels. Also, the shopper buying preferences are huge. I’m reading some of these comments about so much social media noise out there, but I’ve purchased three “delightful finds” that appeared in my Facebook feed just this week. I’m that kind of shopper.

Our job today is to be where people are in the channels that they choose, in order to add value at every touch — that’s omnichannel. They will choose the channel; our job is to make sure that we’re authentic, on-brand and worthy of attention. If you have any doubt about this, watch a pre-teen shop on their phone.

Rich Kizer
BrainTrust

If the question is whether “creating content for social media — or even having a social media presence — isn’t worth it?” then I am truly perplexed. We often talk about media avenues of today, and center on what demographic is using each. It seems to me that throwing out even the lightest interaction/conversion channel is foolish. Certainly, investment levels for all marketing/channel expenditures must be qualified. Should businesses demand that social channels achieve a certain level of conversions to justify investing time and resources? Yes! But we always preach that we must go where our customers are.

That being said, choose the media platforms your desired customers inhabit, and add your best creative content for that segment. But by all means, don’t intentionally throw out a customer segment because they aren’t breaking sales records.

It’s not about throwing money at it. It is about being in the game because you never know where that next best customer/influencer will come from.

Shep Hyken
BrainTrust

NO! I do not agree with the general statement that creating content for social media — or even having a social media — presence isn’t worth it. It is only not good for the companies that treat social media strictly as an advertising and promotional channel — or brands that aren’t good at it.

A brand’s reputation can be amplified by social. The reasons to participate in social media need to be more than just conversion. That’s one form of measurement, but brand recognition and reputation play big, too.

Social media means being social. It is an outlet to connect with the retailer’s “community.” Pushing value-added content — not blatant advertising/promotion — is the way to go. Sure, you can boost posts, pay for some ads, etc. But look at how some of the rock star brands produce content that people want to consume — that people will search for to consume. Social media done right is a valuable investment.

Ralph Jacobson
Guest

In today’s world, I would mildly disagree with the premise that you do not have to have a social media presence. In the future, if social chatter dies off, then yes. But for now, I would measure impact as Mr. Salvatori does and focus on that channel (or those channels) that works. Why would you disengage from a sales channel that is working, like YouTube? Stay close to it and when the tide shifts, deselect those channels. But I would definitely stay in front of your target audience if they are showing you that they are buying from you or your competition on a specific social channel.

Ray Riley
BrainTrust

I believe that in many retail circles over the last few years “social media marketing” was considered the answer. Much like the reactionary, laser-focus on e-commerce, it was all tactics and no strategy. Tactically, social media is a critical part of a digital marketing strategy, but it certainly isn’t where all resources should be deployed and its effect will vary by vertical. It’s an important brick in the wall, along with other analog and digital forms that still reach customers.

Sterling Hawkins
BrainTrust

There has to be an intention and purpose behind any social media beyond a certain number of followers or likes. And how that intention plays out may vary by channel. Vat19 is a great example of that with Youtube working really well and the other channels lacking. I’m in agreement that social media isn’t “necessary” for all businesses, but it can be a valuable and effective channel.

Camille P. Schuster, PhD.
BrainTrust

Once you have a large audience, messages can not be personalized. Generic messages do not necessarily resonate with your best consumers. I also saw nothing in the article about time devoted to listening to responses from those hundreds of thousands viewers. It is incredibly important to test the effectiveness of messages with specific consumers and to listen to their comments. If a company is not willing to do that, then it would be better to not spend the time and money on social media.

Ken Morris
BrainTrust
Ken Morris
Managing Partner Cambridge Retail Advisors
3 years 11 months ago

As we discussed yesterday on RetailWire, scrapping social media efforts is not advised. A multi-channel approach is highly recommended as consumers’ preference for information and services varies widely depending on product and retailers need to offer a broad set of communications and services that appeal to the individual preferences of different customer segments. There is no one size that fits all.

While social media may not be as productive as video in terms of sales conversions, it is still an influencer on purchase decisions that isn’t always as easy to directly attribute to sales. For the segment of customers that are big social media users, retailers need to have a presence to increase awareness and engagement.

Jeff Miller
Guest
I agree with this for many brands, but this is hardly new information. Facebook especially stopped being about organic reach, content and audience years ago and Twitter never was. I will argue that Instagram and YouTube can make a huge impact when combined with paid spend either on the platform or via influencers. Everyone loves to point to Kim Kardashian or Rihanna as great examples and they are. They have huge organic audience built up and when they launch a new product — it goes nuts but their audience on social is not their only channel. Organic social is not the ideal direct response channel but it is part of an overall strategy that helps you tell your story and is another signal to consumers of trust, values and product information. The question for me is not a “should you have a social presence?” — which is an obvious yes but how much time, effort and spend you should allocate to it compared to other channels and that answer is different for every brand and… Read more »
Ed Rosenbaum
Guest

It seems Mr. Salvatori is defeating his premise when he says 60% of his orders come from YouTube. It appears from the numbers alone he would have no business without his YouTube presence.

My summation is to find what social media platform works best for you then go all out to make your business grow. Social Media is where today’s marketing is and will be for the immediate future. Most people spend a larger percent of their time on social media today. Newspaper circulation and ad revenue is so far down it is almost non existent. I would think TV ad revenue is not exactly at its highest. Finding the right social media platform is going to take time and experimentation. But it will be worth the investment.

Craig Sundstrom
Guest

I think Mr. Salvatori simplifies things a bit, but I like the tone: obsessing about your facebook page at the expense of things like inventory management and cyber-security — the dark side of tech — seems like a good way to end up on RetailWire as one of our periodic “what went wrong?” topics.

Mike Osorio
Guest

As with any marketing platform, social media investments make sense when one or more of them are both “where the customer lives” and are in alignment with the brand’s or retailer’s DNA. The challenge of course is the sheer number of significant platforms, the lack of internal understanding about how each platform engages its audience, and the follower syndrome which pushes companies to invest just because it was successful for someone else.

We’re in a sorting-out phase where companies are realizing some investments have made zero sense in driving customer engagement and purchase behaviors. Don’t overreact and throw it all away. Invest where it makes customer and brand sense, learn, adjust. The beat goes on….

wpDiscuz
Braintrust
"You have to be where your customers are. But that doesn't mean you have to relentlessly promote to them every place where they are. "
"Social media means being social. It is an outlet to connect with the retailer’s “community.” Pushing value-added content ... is the way to go."
"Organic social is not the ideal direct response channel but it is part of an overall strategy that helps you tell your story..."

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