Social Media Websites Strengthened Holiday Season for Retailers

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Holiday retail sales might have staved off a visit from the Grinch thanks in part to social media.

Nearly half of U.S. retailers polled in a pre-holiday national survey said they intended to increase their use of social media sites such as Facebook and Twitter during the Christmas shopping season.

“Social media has allowed for a very efficient, low-cost way for retailers to communicate directly with their best customers on exclusive sales and offers,” said Clay McDaniel, co-founder of Seattle-based marketing firm Spring Creek Group.

Although the exact impact of social media on holiday retailing hasn’t been calculated, online outreach is thought to have been a factor in the 3.6 percent increase in November and December spending reported Monday by MasterCard Advisors’ SpendingPulse.

In addition to boosting sales, social media has enabled retailers to reduce or divert spending on traditional advertising in print and broadcast media.

Total ad spending in the U.S. was down 14.7 percent in the first nine months of 2009 compared with last year, according to a recent report from TNS Media Intelligence.

Although much of the decrease is attributable to economic weakness, some retailers are using social media to supplement their traditional advertising at minimal additional costs, said Mike Gatti, executive director of the Retail Advertising and Marketing Association, a division of the National Retail Federation.

“It has helped retailers to better target customers without increasing marketing budgets,” Gatti said.

Best Buy’s “Twelpforce” - a Twitter-connected set of customer-service workers - has been one of the highest-profile social media outreach campaigns.

Domino’s announced that Facebook, Twitter and other social media will be a cornerstone of its campaign to promote a revamped pizza pie.

Introduction of the new pizza “was driven so heavily by listening to our customers through social media (that) having that component be a part of our online marketing campaign seemed like a no-brainer,” said Domino’s spokesman Chris Brandon.