STAMFORD, USA: With the increased consumer traffic that social networks are generating on the Internet, retailers must have a position on social networks, according to Gartner Inc. Although social networks have tended to center on younger demographic groups, they are expanding into wider groups that matter to a broader base of retailers such as career-based social networks, shopping-based social networks, and employee groups.

"Until recently, retailers considered social networks relevant only for the youth market, meaning that many have largely ignored them," said Hung LeHong, research vice president at Gartner. "However, as social networks expand to embrace ever-wider demographic groups, retailers need to ensure that they have a position on them."

LeHong said that these positions can range from creating their own social community to gather feedback, to creating a marketing presence on large social networks, or to simply observing how brands are discussed and perceived. Gartner has created a list of the top 10 things retailers should know about social networks and what action to take.

1. There are Social Sites, and Then There are Social Platforms
Social sites can include features such as discussion forums and consumer reviews. A social platform is a large public site that enables users to do the same things as on a social site, but also creates a platform that encourages and eases the development of applications, widgets and mashups. What a retailer is capable of doing on a social network will be determined by the platform's capabilities. Whether a retailer requires a social site, platform or both depends on where the target market resides and which social vehicles are required.

2. Social Network Sites Go Way Beyond MySpace and Facebook But Reconsolidation Has Started
Gartner estimates that an individual is able to participate in one to three social networks in any meaningful way. Because there are only so many social networks to participate in, consumers are starting to shift to the large centers of gravity (for example, MySpace and Facebook in North America). Analysts believe that the social network market has not yet settled, so retailers should be cautious with their investments on any one social network.

3. Social Networks Are Rich in Word-of-Mouth Discussions About Retailers and Products
Retailers should view social networks as a lead-generation channel just as they would search engines, review sites, and price comparison sites. Lead-generation vehicles range from banners, to search term bidding, to application programming interfaces (APIs) that enable social networks to access the retailers' consumers.

4. Social Graphs Make Word-of-Mouth Relationships Known and Usable
Social graphs describe how friends are formally linked to each other on a social network. Word of mouth is effectively amplified by making social graphs usable by friends and business entities on a social network. To benefit from social graphs, Gartner says that retailers must first understand how each of the major social networks will allow them to leverage their graphs. then decide what to do with that access. For example, analysis of social graphs can be useful in discovering how consumer groups are linked together.

5. Viral Propagation is Boosted in Social Networking
Viral marketing is the most obvious route to take with viral propagation but must be closely monitored and managed. Communication between friends about something as simple as a pricing or promotion mistake on a Web site can propagate very quickly in social networks. Similarly, a strong criticism of a product or retailer can quickly attract a large critical mass. Negative press that is virally spread is difficult to capture and public relations teams need to be well-versed in social network channels.

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