In 2011, Facebook and other social media channels lured some big name retailers to set up shop and actively “sell” on social media. Mid-range brands like Gap and J.C Penney joined luxury retailers like Kate Spade and Coach in the social gold rush.
Where are they two years later?
According to an article by Mashable’s Lauren Indvik, the retailers are finding that social media is not the gold mine of new customers they expected.
Indvik points to a study by digital think tank L2 that finds so-called “prestige brands” reported that “less than 0.25% of new customers have been acquired through Facebook and less than .01% from Twitter. Furthermore, customers acquired via social media spend less money over time (i.e., have a lower lifetime value) than those acquired via search.”
While not a ringing endorsement of social as a customer acquisition channel by any means, Indvik is quick to point out that this doesn’t mean social media is a complete waste of time for prestige brands. She points out that social media does play a big role in boosting organic search rankings, still an important element in your overall marketing.
The takeaway? Savvy advertisers would do well to take some of their under-performing digital advertising budgets and funnel it back into the proven print channels, which continue do well for luxury retailers.