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Why Alibaba's social media engagement strategy paid off

Alibaba broke sales records on Singles Day 2015. What does the Chinese retailer's social media engagement strategy tell us about traditional marketing?

Marketers want to achieve two things: target consumers who are interested in their products and drive sales. But for many companies, standing out and getting noticed has become increasingly difficult. Companies may resort to deep discounting products or bombarding customers with a barrage of email, but these tactics can just as easily backfire as they can promote sales. Meanwhile, marketing initiatives may not even reach their intended audience.

One company, though, provides lessons for marketers on how to use a social media engagement strategy to cater to consumer preferences. Singles Day originated at China's Nanjing University in 1993 as an occasion for singles to celebrate with fellow singles. The event blossomed into a retail phenomenon when Alibaba, a Chinese online retail company that boasts 12.7 billion in annual orders on its website, transformed Singles Day into a day designated for online sales.

This year's Singles Day, analysts expect, could reach a new record. An estimated six million products from 40,000 merchants and 30,000 companies went on sale, as opposed to one million in 2014, according to comScore Inc. Chinese consumers were predicted to spend 1,761 yuan -- or $277 -- per person, which is an increase of 22% year over year (YoY). But preliminary numbers indicate that Alibaba broke records with sales of $14.3 billion, a 60% increase YoY.

As marketers plan for 2016, consider how Alibaba listened to the needs of its target demographic and drove sales by featuring the customer experience as the key factor of its marketing engagement strategy.

Alibaba's Singles Day social media engagement strategy

Alibaba's use of social media to market to Millennials and rally them around a common event was key to Singles Day's success.

Using social media as a key component. Singles Day is a demographically targeted event that specifically goes after Millennials and caters to their communication preferences. According to The Millennial Consumer study, Millennials aren't influenced by traditional media advertising, such as TV commercials, magazines or books. To reach this group, brands need to use social media, events and peer-to-peer connections; 33% of respondents said blogs are their top media source, while less than 3% rank traditional media sources as purchase influencers and only 1% said an advertisement would make them trust a brand.

Alibaba's use of social media to market to Millennials and rally them around a common event was key to Singles Day's success because 62% of Millennials said they are more likely to become loyal customers if a company socially engages with them. Marketers need to listen to the voice of the customer more than ever. Making marketing content relevant and readily accessible to a particular audience are essential to entice consumers with a marketing engagement strategy.

Mobile engagement is paramount. According to the study, 87% of Millennials use between two and three tech devices at least once a day. This is critical when you consider that 43% of Alibaba's transactions on Singles Day 2014 occurred on mobile.

According to Pew Research, "Nearly two-thirds of Americans are now smartphone owners, and, for many, these devices are a key entry point to the online world." Additionally, one in five Americans "do not have broadband access at home, and also have relatively few options for getting online other than their cell phone." Developing specifically mobile strategies is no longer an option but, rather, an essential need for all marketing and social media engagement strategies.

Know your customers. Chinese consumers like U.S. brands and Alibaba said U.S. products were the top sellers on Singles Day 2015 with 130 U.S. companies joining the fray.

Even U.S. consumers participated in Singles Day on several U.S. sites, such as Newegg Inc. and Nasty Gal Inc. Alibaba maximized its sales potential by widening the scope of Singles Day to products and companies beyond China's borders, making the day an international event. A sale designed to capture short-term revenue will not set you up for ongoing success. The event has to have meaning to the audience and comprise merchandise that conveys value, sparks excitement and communicates urgency.

What you can learn from the success of Singles Day comes down to this: You must think about your social media engagement strategy holistically and take creative risks. Identify your priority segments and design the experience, merchandise, and media mix to be special and differentiating.

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This was last published in December 2015

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