Social media has witnessed an explosive growth in the last two decades, courtesy of the advent of the internet. While a large section of the global society uses the social media for personal reasons, including communication and interaction, the online platform has proven vital in the business arena. Organizations in the contemporary marketplace have received the profits of the beneficial aspects of the social media to drive their sales and profitability. This article presents a detailed discussion of the utilization of the social media by the enterprises in enhancing online sales. The advantages as well as the disadvantages of the media platform are also presented. Besides, the paper provides an in-depth and critical literature review on the contribution of social media to the increase of online sales. Moreover, the study also discusses Domino Company as a case study given the excellent application of the social platforms by the company. Lastly, the author concludes the research by acknowledging the instrumentality of the social media in driving online sales of global organizations.
Introduction
The development of the social media has been instrumental to the lifestyle of the global populace on many spheres, and business is not an exeption (Asur and Huberman 2010). The internet invention has provided a suitable channel for the explosion of the social media as a category of the online discourse. This study aims at investigating the effects of social media in increasing online sales among organizations in the world. As the social media takes the internet by storm, so have business organizations taken advantage of the myriad opportunities presented by the online platform to steer their business objectives (Ahearne and Rapp 2010, p. 764). While business organizations endeavor to push their sales by capitalizing on the opportunities presented by the social media networks, firms, and salespeople, in particular, continue to encounter uncertainty over the viable social tools and techniques in achieving such sales. This article discusses the effects of social media on online sales, including the positive and adverse impacts.
Critical literature review
Over the last two decades, the world has witnessed a phenomenal growth of the media networks. Contemporary businesses take advantage of the increasing popularity of customer-centered social media (Kaske, Kugler, and Smolnik 2012, p. 3898). Therefore, the number of people using various social media networks as Twitter, Facebook, WhatsApp, and Myspace has skyrocketed during the period stipulated above. Contrary to the traditional communication channel as telephony and television, which had 150million users after 39 and 89 years of existence, Twitter surpassed the landmark in a record four years (Icha and Agwu, 2015). In fact, Twitter lags behind Facebook as the latter accomplished the number mentioned above the subscriptions one year earlier. The users of the social media networks have utilized the communication technology not only in pursuing personal endeavors but also performing business activities. According to Barnes, Hood, and Gallardo (2014, p. 127), the interaction between the sellers and buyers have changed the courtesy of the advent of the social media networks tremendously. The increased interaction, subsequent involvement and collaboration between the two parties mentioned above are beneficial to the sales organizations, particularly when they utilize it to alter the behavior towards the potential customers (Stelzner 2014, p. 24).
Neti (2011, p. 7) also contributes to the existing information on the advent of social media in the contemporary society, particularly its usefulness and instrumentality in the business arena. According to the scholar mentioned above, social media presents an array of opportunities to the modern business entities as it enables the firms to connect and interact with their prospective customers. While Neti (2011, p. 8) the usefulness of social media for socialization, the scholar delves deep into the role played by the social networking sites to improve enterprise performances through engaging customers online. The author reiterates the essence of using the social media in engaging prospective clients in an attempt to steer business performance and profitability.Hoffman and Fodor (2010, p. 41) uncovered the fact that social media marketing provides substantial return on investment (ROI). According to the authors above, the effective and appropriate measurement of social media should commence by transforming the traditional ROI model. Notably, there is a need for managers to emphasize on consumer motivation to utilize the social media, instead of calculating the returns based on customer response and prioritizing their marketing investments (Hoffman and Fodor 2010, p. 41). In fact, Neti (2011, p. 11) notes that such a move, particularly connecting with the process of customers is likely to win their trust, a practice that every business entity cherishes. The author asserts that every business entity must venture into the online platform if it intends to shade-off the heightened competition in the global market. In their pursuit to increase sales, improve performance, and gain a competitive advantage over the rivals, contemporary organizations have opted to prioritize social networks to engage their customers in an endeavor to boost sales and subsequent performance. The social networking sites have become vital to not only the well-established and reputable organizations but also the small-scale entrepreneurs.
Research on sales discipline based on technology has been in existence for a while beginning with the advent of laptops and computers, followed by the proliferation of the internet, through to the management of customer relationship and sales force automation. The transformation highlighted above has revamped sales research into a contemporary paradigm as the role the social media in fostering sales plays the central role. Previous articles have emphasized the advent of technology, its relevance and applications to personal selling. Various topics have featured while perusing the materials, including the use of B2C sales technology among other strategies mentioned above (Ahearne and Rapp 2010, p. 764; Kietzmann et al. 2011, p. 241). Nevertheless, introduction to in the 1990s marks the single-most important technological progress to increased sales in the contemporary business world (Michaelidou, Theofania, and Siamagka 2011, pp. 1153-1159).
In the traditional setting, the marketing tools such as websites exhibited features of novelty instead of content and the original e-commerce that failed to live to its promise. However, the global populations, including business entities lacked knowledge on the imminent transformation that would revamp the selling initiative, primarily contributing to increased access and availability of information on the B2B space.
While individuals have been swift in adopting the social media networks, organizations have shown sluggish speed in embracing the channel to steer their businesses. Agnihotri et al. (2016, p. 171) argue that business entities organizations acknowledge the signifiation of the social media networks in fostering business-business relationships. However, utilizing the platform to improve the sales and subsequent performance of the business has been a slow but essential decision to make. Marketers have taken on the potential of the social media tools and channels to convey their business messages at the consumer level (Andzulis, Panagopoulos, and Rapp 2012, p. 305).
Saravanakumar and SuganthaLakshmi (2012, p. 4444) argue that the technological advancements, particularly the social media have inherent and substantial effects on almost all aspects of sales management and personal selling. It is, however, noteworthy that the authors mentioned above reiterate the fact that social media encompasses the networking tools utilized by organizations and internal social media networks and not necessarily limited to the social media networks available for public consumption, including Facebook, Twitter, and Myspace (Andzulis, Panagopoulos, and Rapp 2012, p. 312). According to the authors mentioned above, the social media provides a bevy of opportunities to business organizations to not only interact with the customer but also manage their reputation and subsequent brands. Such interaction and reputation are critical as firms endeavor to increase sales in the global sphere.
Through the social media networks, the salespeople have the opportunity to cooperate and relate positively to the customers. According to Barnes, Hood, and Gallardo (2014, p. 143), the customer-salesperson relationship is a prerequisite in increasing sales of a business organization as it creates an opportunity for the latter to engage the potential customers on the platform. The author mentioned above argue that while such a relationship is expected to an increase in the significance of relationship-oriented behaviors (Kim and Ko 2012, p. 1480). Nonetheless, Icha and Agwu (2015, p. 6) argue that the kind of relationship mentioned above may just lead to something contradictory. According to the authors, it is not surprising that the customer-salesperson relationship may cause potential burnout, an issue attributed to the likelihood of the interactions to fail due to the use of electronic communication at the expense of face-to-face engagement.
While business organizations appreciate the advancements in the social media in steering the sales, they may not reap such benefits without establishing the customer needs through ‘social audit.’ The information stipulated in the social audit would inform the decisions by organizations to select a certain type of social media to pursue. It would be convenient for some organizations to utilize Facebook, and not the other social media networks, an issue attributed to the customer needs. Heymann-Reder (2012, p. 63) argues that firms which establish social media networks that do not conform to the needs and preference of the customers waste not only the company resources but also an avenue to pursue collaboration and connection that is beneficial to the business.
Contrary to the traditional business setting where salespersons engaged the customers to educate them on the existence of various products and services, the contemporary environment provides for the use of social networks to supplement the sales process (Mangold and Faulds 2009, p. 357). The initiative entails the endeavor to engaging the customers on a virtual media forums and get real-time feedback from the clients, experts, as well as the competitors. Hanna, Rohm, and Crittenden (2011, p. 256) cite Johnson and Johnson as one of the firms that have established an online forum where its shares educational video clips to engage its customers collaboratively and ensure they are intimately conversant with their products and services. In so doing, the company has driven up its sales projections as it endeavors to engage customers on the social media networks.
The myriad networks and social media networks available in the contemporary global marketplace facilitates the operations of the marketers as they actively engage in the experimentation of the several major networks. For instance, established firms such as Dell, Whole Foods, Gap, and Zappos have been instrumental in engaging their customers on various social networking podiums. According to Hanna, Rohm, and Crittenden (2011, p. 255), blogs have become useful in driving sales as mobile phones, particularly smartphones play a central role in enhancing two-way interaction with the consumers. The authors mentioned above argue that the advent of the social media, particularly the interactive digital media has considerably changed the marketing landscape, thereby creating a collaborative world between the salespersons and the consumers and driving sales in the process. The platforms have not only benefitted the business entities but also empowered the consumers towards sharing, connecting, and collaborating with other users, including the salespersons, thus altering the marketing strategies employed by organizations (Ahearne and Rapp 2010, p. 765).
In the music industry, for instance, the proliferation of the social media in the contemporary society has transformed the entertainment industry. According to Dewan and Ramaprasad (2014), the advent of new media based on user-generated content is taking the space once occupied by the traditional media, particularly in reference to how consumers get to know the new products and services in the market, as well as how they consume them. The author mentioned above further alludes to the fact that the music industry is one of the sectors affected dramatically by the explosive growth of the social media, where the users take advantage of the technology to share various contents and information online. On a traditional platform, the users depend on the mainstream media, such as the radio to listen to their preferred music and purchase the albums afterward. However, the social media has given the consumers a possibility to discover music through online music services and blogs, and acquire the digital versions for consumption. In so doing, Dewan and Ramaprasad (2014) explain that the dynamics highlighted above not only change the ease of access of the digital version of the music but also alters the consumer behavior as well as the number of music sales.
While Dewan and Ramaprasad (2014, p. 4) appreciate social media use in increasing consumer behavior and awareness to the existence of certain products, it also presents a fair share of its shortcomings, particularly in the music industry. The author associates the proliferation of the social media to the compromised sales of music on a digital platform (Packer 2011, p. 5). For instance, the author argues that the introduction of the social media has created an avenue where consumers access free online sampling, thereby displacing song and album sales. Furthermore, the author discusses how the introduction of the social media networks such as Napster adversely affected and disrupted the music sales and the industry. Notably, songs are considered as information goods, thus exhibits certain characteristics, including the shareable, free, as well as distributable nature of the music songs unbundled from the album.
The arrival of the social media came with it a bevy of alternatives to the consumers, including various options for sharing songs, discovering new artists, and the consumption of music. In the process of utilizing the social media networks to share music, the users have contributed to the decline in sales witnessed in the music industry. According to Dewan and Ramaprasad (2014, p. 12), sharing of music online through the peer-to-peer platform is one of the activities that have contributed enormously to the decline in the sales of music in the industry, costing the music industry a $55 billion in losses over the last 10 years. Dewan and Ramaprasad (2014, p. 34) explain that the music industry recorded a decline in music sales by over 8%, constituting almost $1.5billion in 2010 alone. The 5.3% increase in digital music sales failed to compensate for the $10.4billion decline in physical sales (Dewan and Ramaprasad 2014, p. 56).Social networking is beneficial not only to the large-scale business entities but also the small businesses. In a case study carried out in 2012, Sarosa established a variety of factors behind the success of the adoption of social media networks as a means of supporting business ventures (2012, p. 244). On a similar note, Vásquez (2014, p. 533) also explored the use of social networks as a tool for SMEs. According to the outcome of the study mentioned above, SMEs are critical in the economic growth of a nation. However, they do not understand the most effective and technologically-viable approach in exploring their creative and innovative capacities (Dahnil et al. 2014, p. 119).
Rooney (2010, p. 241) associates social networks with Web-Based Marketing techniques often employed by companies to gain a competitive edge against rivals in the highly volatile markets. Companies took advantage of the Twitter and Facebook boom in 2009, for instance, to provide special offers to their customers, thereby increasing sales. According to Erdoğmuş and Cicek (2012), the employment of social media as a marketing strategy presents the impacts on the customers’ brand loyalty. The authors argue that the loyalty of customers improves as a result of the increased offers by the brand in offering the many applications in the social media platforms (Erdoğmuş, and Cicek 2012).
Vásquez (2014, p. 535) cites Starbucks and airlines as some of the business entities that take advantage of the opportunity to promote their businesses through the social media. For instance, Starbucks put much emphasis on Facebook to promote its business. Notably, the company engaged in the promotion of discounts and coupons to its customers who liked their Facebook page.
Case study: Domino’s pizza group plc 2016
Domino is a world-leading pizza Delivery Company headquartered in the UK. Since its establishment in 1960, Domino has made commendable progress due to its top-notch performance in the marketplace. Such performance is attributable to a variety of issues, including effective marketing strategies. Of importance to this study is how Domino has embraced the use of social media platforms in driving its sales across all its stores in the world. According to Schuman (2015), Domino rolled out its mobile and online platform in 2007, where customers could place their orders digitally. In the subsequent year, it launched a tracker, which enabled the clients to track their orders online. Besides, the company launched its iPhone and Android Apps in 2011 and 2012 consecutively, showing its commitment to reach out to its clientele in a more convenient way.
The initiative mention above marked the onset of a series of positive reviews from customers, as well as increased sales by the company after several negative feedbacks from the customers. The brand image equally changed, courtesy of the utilization of the social media platforms. Le and Pashut (p.5) note that the company opted to hire a new CEO, Patrick Doyle in 2010 to reclaim its brand image after the media exposed employee blatantly abusing the food products at the company premises. Presently, Domino is employing Twitter, Facebook, Tumblr, and Instagram applications as its preferred social networking platforms to steer the business operations. In 2015, the company launched its mobile App, Twitter account, Android Smartwatches, Ford-sync cars, and Samsung TV’s platforms, which enabled the customers to place their orders via such media. The launch facilitated the company’s tweet-to-eat campaign (Schuman 2015).
Discussion
Use of Social Media to Boost Sales
The outcome of the case study on Domino Company highlights the success of the company in boosting sales and customer loyalty using social media platforms. In fact, the firm has demonstrated commendable progress in its performance and brand image since the adoption of the various social media platforms, including Twitter, Instagram, WhatsApp, and Tumblr. According to Le and Pashut (2011, p. 5), the use of social media has had excellent outcomes as the company thrives in the current business market. The author mentioned above affirms that Domino reported increased sales attributable to the digital channels, up 18.1 percent. Moreover, the findings reveal that more than 80% of the company sales emanated from its online sales channels as a result of the aggressive pursuit of online sales through the social networks. Due to the marketing strategies above, Domino posted a 7.6 percent growth in profitability in Ireland, and 16.7 percent in Switzerland among other locations like Germany.
Social Media as a Marketing Tool
In addition to using the social media to create awareness on the existing products, Domino also uses the platforms to entice the customers towards making purchases. The company, just like other successful firms in the global arena has changed the consumer behavior by engaging them in a more interactive and collaborative communication. It is notable that the company understands that majority of customers often follow the company brand via the social media to access products on promotion. As a result, the management has resorted to running promotions to increase sales through the social media.
In summary, Domino’s strong presence in almost all important and reputable social media platforms is a clear prove that the company understands marketing via the social media and the strategies in reaching out to its dear customers.
Although the social media presents a bevy of opportunities to business entities, it also has a fair share of its shortcomings. For instance, the Turkish SMEs utilizes social media platforms that adopt formal language while communicating with their clients as well as exhibiting unattractive content, which do not command the loyalty of the customers. In so doing, the SMEs end up not achieving their targeted marketing goals and objectives through the use of social media platforms (Öztamur and Karakadılar 2014, p. 511).
Conclusion
The advent of the social media networks has created great opportunities for business entities to steer their online sales and performances. Both the small-scale enterprises (SMEs) and reputable organizations have taken profits of the advantages presented by the social media to enhance performance. In the last two decades, the social media has exploded, thereby enabling the global populace to network, create content, bookmark, as well as share important information, including business activities. The ease of use, accessibility, and speed of the social media networks have transformed the public discourse, including the marketing and sales initiatives adopted by various business entities. While business organizations endeavor to push their sales by capitalizing on the opportunities presented by the social media networks, firms, and salespeople, in particular, continue to encounter uncertainty over the viable social tools and techniques in achieving such sales. The interaction between the sellers and buyers has changed tremendously, courtesy of the advent of the social media networks.
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