Gartner backs social networks for business

Firms with online retail arms can no longer afford to ignore the potential business benefits of social networks, analyst firm Gartner said this week.

The site traffic and influence of social networks has grown in recent years to the point where retailers should see them as a valuable lead-generating channel, comparable to search, review and price comparison sites, according to Gartner research vice president, Hung LeHong.

Firms can also use the power of these networks to facilitate viral marketing campaigns, while the increasing ease with which applications can be built for these sites gives e-retailers a better way of engaging with their target audiences, he added.

“Until recently, retailers considered social networks relevant only for the youth market, meaning that many have largely ignored them,” said LeHong in a statement. “However, as social networks expand to embrace ever-wider demographic groups, retailers need to ensure that they have a position on them.”

There are some caveats according to Gartner. Recent high profile incidents concerning data security has meant much of the valuable consumer information held by the networks is not available to firms.

There is also the potential risk that if firms are given too many ways to advertise and sell to consumers via their networks, those members will leave their social networks and go elsewhere, said LeHong.

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