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InformationWeek 500: Innovation Spurs Business Growth

Royal Caribbean Cruises, The Wet Seal and United Stationers have used data analysis, digital services and social networking to boost business in the midst of a recession.

Shawn Keim, director of systems development at Wet Seal, illustrated how his firm has made use of Facebook and other social media to win new customers. Wet Seal is a rapidly growing online and brick-and- mortar retail chain for 15-19 year olds. Over the past year, it has gained 695,000 adherents to its Facebook page, which includes a number of interactive activities. The Wet Seal Facebook site page fans to design outfits, mixing and matching preferred clothes together and commenting on other designs. Wet Seal decided to try to engage its young customers in their preferred medium and rely on them to keep the content fresh. "We could pay an agency $1 million a year to keep the content on our site fresh, or we could let them do it," Keim noted.

"Facebook has become one of our highest upstream traffic drivers to www.WetSeal.com," Keim noted. When the company launches a campaign for a particular line of clothing on Facebook, "we get a much better turn out" in customer response than via advertising or more traditional media.

The company's Facebook site includes a virtual runway where several girls may shop together over an iPhone application, exchanging chat, describing what they like and making sure they don't overlap a friend's color or style of purchases in their own, said Keim.

This month Wet Seal will launch a Wet Seal social networking game, allowing participants to win discount coupons or receive special offers. The firm has hired one of its frequent Facebook commenters as an intern to monitor the comments of other teens on the site and alert the company when something is drawing negative comment or otherwise going wrong. "If they don't like something, believe, they'll tell you," said Keim.

Facebook users of the Wet Seal page "have a 40% higher conversion rate" into buyers, then non-Facebook users, said Keim. Likewise, in repeat visits, they tend to buy multiple items, "leading to a 20% higher average transaction," he added.

Formulating and executing a social networking strategy takes time and commitment and often doesn't yield immediate rewards, he warned. It took six months for the iRunway application to gain any traction with iPhone users; now it's downloaded 2,500 times a week. "Social viral-ity is a difficult code to break," he noted. Nothing much may appear to be happening and then suddenly a great deal activity is having an impact on sales.

Keim practices some guerilla warfare to get his social networking ideas accepted by top executives. He had executives equipped with iPhones "to let them get some direct experience of the mobile, social networking user." When he knew teenage daughters of executives, he emailed them that they needed to get their dads to invest in more social networking applications from the IT department to bring shoppers like themselves to Wet Seal stores and websites.

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