UPS shipments up due to ecommerce sales

Consumers are increasingly shopping online, which United Parcel Service attributed to the growth of Next-Day air shipments.

The organization increased packages delivered by 4.5 percent during the first quarter of 2012, up from 12.67 million to 13.24 million packages. Next-day air shipments saw particular growth during this time frame, rising from 1.15 million to 1.21 million compared with last year. Meanwhile, deferred air shipments – or packages sent at 2- or 3-day rates – increased 9.9 percent.

"I think it’s just the law of larger numbers," Paula Rosenblum, managing partner at research and advisory firm Retail Systems Research, told Internet Retailer. "If you're shifting to buying online but you’re in a hurry, you’re going to request expedited shipping."

Separate data from comScore has noted double-digit increases in ecommerce spending for the past few years, further highlighting the growth in online shopping among American consumers.

Foursquare considers new advertising tools

Many merchants use Foursquare as a means to drive new customers in-store. Now, the social media site is offering better means for retailers to leverage its massive user base through a new paid advertising platform.

According to sources familiar with the project, Foursquare will enable advertisers to create special deals through a paid-media platform. These deals will show up as users search for them, helping retail merchants raise consumer awareness, AdvertisingAge reports.

While Foursquare didn't comment on the specific paid-media advertising platform, a company spokesperson did say the site is always looking to give brands new ways of engaging customers.

"Over 750,000 businesses use Foursquare to engage with their customers, and we're continually improving our offerings to make the platform even more powerful for them," the company explained. "Our goal is to build scalable self-service tools that enable businesses to draw in new customers and retain and reward their most loyal ones, while also enhancing the foursquare experience for our 20-million-strong community."

Walgreens has been a noted Foursquare user, offering flu shot donations for check-ins as well as discounted merchandise.

Reviews have more influence on purchase decisions

One of the biggest advantages to shopping online, from the perspective of consumers, is being able to conduct research quickly and efficiently. They can learn about products they've never heard of in a matter of seconds by entering the name into a search bar or asking friends on social media.

Perhaps an even better means of accomplishing this – and one that retailers can further facilitate – is online reviews. Businesses can quickly and easily integrate online reviews into their websites to give consumers a way of offering their advice to other prospective buyers. Moreover, consumers are growing increasingly trusting of these reviews when it comes to making a purchase decision.

According to a new report from Nielsen, approximately three-fourths of online shoppers (70 percent) believe in online reviews – a 15 percent increase from the 55 percent who trusted them as recently as four years ago. This makes web recommendations the No. 2 most trusted source of brand information and messaging, second only to personal advice given by family members and friends.

"The explosion of social networks and consumer-generated media over the last few years continues to have a significant impact on advertising as consumers' reliance on word-of-mouth in the decision-making process – either from people they know or online consumers they don't – has increased significantly," the Nielsen report adds.

In mobile devices we don't trust

On the other end of the spectrum, however, is mobile devices. Few consumers trusted promotional messages and advertisements served to them through their smartphones and tablets – only 33 percent had faith in display ads on mobile devices, while a mere 29 percent believed in mobile text ads.

In general, paid media garnered less trust than organic earned media, so the problem may be with the way retail brands are engaging consumers, rather than the platform through which they have these communications.

"When it comes to traditional, paid media, while nearly half of consumers around the world say they trust television (47 percent), magazine (47 percent) and newspaper ads (46 percent), confidence declined by 24 percent, 20 percent and 25 percent, respectively, between 2009 and 2011," the news source added.

As it is, many consumers consider smartphones a top shopping companion, as they enable shoppers to compare prices, look up reviews and do other research while in-store.

Some retailers don’t conduct customer service on Facebook

While a number of retailers leverage Facebook as a means to promote goods and services, few are making use of it as a customer service tool. A recent survey from customer service vendor StellaService suggests as many as one-quarter of retailers failed to respond to inquiries and questions written on their Facebook pages' walls and in the comments section.

Five major retailers, including J. Crew and RadioShack, failed to respond within 48 hours of a wall post, while 13 merchants didn't respond to an inquiry published in the comments section. Even worse, a number of retailers, such as Victoria's Secret, even deleted the comment without a response – a critical mistake for any social media-savvy business.

"For service and support-oriented companies to open themselves up and extend themselves to their Facebook brand page, they have to accept that their customers are there," says Wendy Lea, CEO of StellaService’s Get Satisfaction Inc. division.

More than 850 million people have Facebook accounts, so it's pivotal that if retailers decide to leverage the social site as a marketing tool, they also commit to conducting customer service on it.

Mobile is key to engaging in-store shoppers

Marketing is no longer just a means of getting a customers to shop in-store – now, a significant number of retail merchants are leveraging proximity advertising to encourage consumers to take specific action.

A new IBM study suggests 72 percent of consumers would act on a marketing message they receive while in sight of a retailer. Given the fact that more than 1 billion people worldwide now own mobile phones, the devices are the perfect means for retailers to deliver these messages.

"The connection is clear: Marketers that can reach the customer at the point of sale can harness the enormous potential of proximity marketing," MediaPost adds. "Thanks to a pervasive mobile culture in which consumers use smartphones as portable windows to the world, marketers have the power to deliver the right message at the right place when they combine mobile messaging capabilities with digital signage tools."

Walgreens is one of the many retail merchants integrating smartphones into store operations. The brand recently began sending digital coupons and catalogs to people as they entered stores.

Twitter partners AmEx to tweet discounts

Major retailers are hoping to spur more purchases through a new retail merchandising venture launched by American Express and Twitter.

The two companies have teamed up to provide consumers with discounts by tweeting certain retail hashtags. For example, consumers shopping at Whole Foods Market can receive a $20 credit on a future purchase of $75 or more at the store by tweeting #AmExWholefoods.

Shoppers looking to take part in the program simply have to visit the American Express website and sync their credit card with Twitter. The discounts will then be automatically applied when users tweet a specific hashtag.

"I really believe that this is turning tweets into transactions," American Express executive Elizabeth Rutledge told CNN Money. "We need to be where our customers are. They're on these platforms using them every day."

Currently, 16 retailers are participating, including H&M, Whole Foods Market, FedEx and Best Buy. Whether more retailers will be added remains unclear.

Retailers pin marketing hopes on new social media board

The internet is no longer a novel sphere for retail merchandising – in fact, companies are expected to have a presence on multiple social media outlets.

However, this can become difficult as not all websites are right for every retailer. One newer social media site is appealing specifically to image-dependent retailers. Pinterest allows members to share images and thoughts by "pinning" them to virtual community boards.

Like Twitter and the possibility of "re-tweets," images can be "re-pinned" on other boards, allowing retailers to gain more followers or users in a certain community, Retail Week explains. While the site is still relatively new, it was recently found to drive more interest to websites than Google+, LinkedIn and MySpace combined.

Retail Week suggests two ways that companies can leverage Pinterest: creating themed boards they can share with followers and encouraging consumers to share the content with their own communities.

"Using the social networking site is a good way to build brand presence online, introduce the retailer's product to a new audience and ultimately increase sales," Retail Week explains. "Images are linked to the retailer's website, so users can click through to the transactional site. Retailers can also monitor the kinds of images being shared and searched for by users in order to keep up with trends."

Retailers use gift cards to woo shoppers

Gift cards are commonly thought of as just that – presents given from one shopper to another. However, retail merchants are increasingly using the payment tools as a part of their marketing initiatives, Direct Marketing News reports.

The weak economic conditions helped bring gift cards to the mainstream – they are cost-efficient presents that enable the recipient to buy whatever he or she wants. During the 2011 holiday season, consumers spent approximately $27.8 billion on gift cards – approximately $155.43 per person – according to the National Retail Federation (NRF).

Now, retail brands are using gift cards for giveaways and small promotions, providing fans and shoppers with gift cards worth anything from $5 to $1,000. The goal is to give consumers a small incentive to come in and shop, the news outlet reports. Many Americans are cost-conscious given the harsh economic conditions and are looking for deals and discounts – gift cards give them the perfect reason to choose one retailer over another.

The Belk department store chain, for example, gave away more than $1 million worth of gift cards to shoppers on Black Friday. The brand wanted to attract customers and felt gift cards were the perfect way to do that.

"We like offering free gift cards because they offer value, an immediate reason to shop, and they give our customers the flexibility to purchase anything they want," Jon Pollack, executive vice president of marketing, told the news source. "Redemption of these gift cards is extremely high, and by all accounts our customers love them."

The growing popularity of online and mobile shopping is expected to further fuel the popularity of gift cards, which can be purchased and sent digitally to shoppers. Some brands are even developing technology that uses near-field communication (NFC) chips that would be able to give credit to shoppers the moment they walk into stores.

They aren't necessarily cost sinks, either. Frequently, shoppers will spend more than what they have on the gift card, boosting profitability. Conversely, if they don't spend the total amount on the gift card, the merchant is technically making money from the transaction.

That said, it's crucial that retail brands keep their bottom line in mind as they run these promotions. After the 2011 holiday season, a number of merchants had to revise fiscal forecasts because of rampant sales throughout the two-month period.

Retailers need to synchronize social efforts with buying patterns

In the world of online marketing, social media is a new popular channel – every retail merchant wants to develop their social presence and have Facebook, Twitter and YouTube channels. However, simply creating profiles isn't enough, asserts industry expert Steve Cohen, there is a great deal of optimization that must be done before merchants will see big results.

"How you're using social media should really mirror how your customers purchase their products from you," he explains. "In line with this, retailers should understand what their customers are looking for in order to optimize their social media offerings and how they communicate with them through social media."

For example, retailers could take a look at which products are selling well, then offer discounts on them to social media fans, providing existing followers with value and others with an incentive to subscribe to the brand on Facebook, Twitter or whichever social site they use.

Many retailers are quickly integrating social media into store operations. If they aren't leveraging the platform as an online shopping platform, they may be using it for customer service or to get feedback on products and services.

Retailers need to refocus on improving supply chains

Few things are worse than not having the right inventory to meet consumer demands. While many retailers are focusing on improving the shopping experience through mobile websites, ecommerce and new retail POS software, some industry experts suggest merchants should be focusing on developing their supply chains as well.

At the recent Retail Conference in London, retail expert Claire Rayner reasserted the importance of supply chains. She stressed that retailers shouldn't be prioritizing customer engagement models over the improvement of their supply chains.

"It is as if their core commercial processes – supply chain planning and distribution systems – have been de-prioritized by retailers in favor of spending budgets on new apps, mobile websites and so on. I believe that retailers that are not investing in revitalizing the day-to-day operational areas of the business are putting their businesses at risk," says Rayner.

A number of retailers struggle with inventory management – they don't want to overstock, but they do want to be able to meet demands. Better supply chain management is crucial to mitigating those risks.