Retailers, Here’s Proof Social Engagement Drives Q4 Sales
When Media Logic’s Retail Social Juice Index was still in its infancy, we used it to predict big 2011 holiday sales for 10 brands. The question retailers always ask of marketers is, Can social media engagement track to sales? We’re happy to answer, Yes. High social engagement, as we measure it with the RSJI, does seem to correlate with increased sales.
And here’s more good news: There’s still time to plan your Q4 social content.
The brands we identified back in December 2011 – Yankee Candle, American Girl, Ann Taylor, LUSH Cosmetics, Lakeside Collection, Pandora, ShutterFly, ThinkGeek, LeapFrog and Bath & Body Works – remained at or near the top of the RSJI leading up to and through the 2011 holiday season. Each, in fact, averaged an engagement score of 150 or more (a rare honor) in the three weeks leading up to our prediction. This remarkably high – and consistent – engagement represents the kind of sustained customer enthusiasm we believed would result in revenue.
Public financial data is available for eight out of the 10 brands (LUSH Cosmetics and Lakeside Collection are private companies and do not publish financials). Of these eight, all but two – Pandora and Ann Taylor — showed an increase in comparable store sales (or in total sales, when comp numbers are not applicable) for the final quarter of 2011, which, of course, includes the holiday selling period. And despite a decrease in comparable store sales, Pandora still reported a 12.4% increase in North American revenue for 2011.
In addition to the brands on our list performing well in their year-over-year figures, we also saw this group realize growth in company stock prices.
Compared with closing prices the date of our prediction, stock prices for our basket of stocks increased 22.9% over the subsequent four months (through 4/13/12). During that same time period, the S&P Retail Index increased 18.5%, and the Dow Jones U.S. Retail Index rose 12.2%. Only one company on our list – GeekNet (GKNT), the parent company for ThinkGeek – showed a drop in stock price during that time. And in the same period, all but Leap Frog continued to remain above the RSJI’s daily average engagement score. In fact, four brands — Pandora, American Girl, Bath & Body Works and Yankee Candle — remained at or above that high bar of 150 nearly every day.
Curious to see how social engagement might predict success or failure for other companies, as well, we looked to financial experts who’d reported on the holiday season for additional brands we score with the RSJI. In December Same-Store Sales Are Mixed for US Retailers (January 2012), Karen Talley shared good news for Macy’s, Target, Costco and Limited Brands and bad news for Gap, American Eagle Outfitters and Bonton. Interestingly, those companies with rises in same-store sales for the holiday period all demonstrated above average social engagement, according to the RSJI. The flip side? Those companies with drops performed below average on our index. JCPenney, for which Talley reported a modest 0.3% gain, also performed under the RSJI average during December.
While the data we analyzed was specific to our predictions for the 2011 holiday season for the set of retailers at the top of the RSJI, the observations can’t be ignored. They suggest economic gains are realized by brands that also – and concurrently – have high levels of social engagement.
As intrigued by these figures as we are? Not sure how to get the best social bang to earn the bucks this holiday season? Give us a call.
