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Weekly Retail Media Note #165: Word-Of-Mouth Said To Drive Almost One-Fifth Of Consumer Sales. Social Media A Key

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How important is it to retailers that they have customer service that delivers above expectation? Simply put, customers who are overwhelmed with the customer service by a retailer tell other people about it. It is an exceptional moment in retail. Word-of-mouth has time and again been shown in research to be the top influencer of consumer’s purchase decisions. Now, a new study from Engagement Labs quantifies the extent to which word-of-mouth drives sales, finding that an estimated 19% of consumers sales are the result of online and offline conversations.

The study analyzed correlations between consumer conversations and purchases for 170 brands, using a combination of data scraped from social media, survey research and weekly brand sales figures.

The 19% of consumer sales driven by word-of-mouth broke out to 10% from offline and conversations and 9% for social media. It’s worth repeating that finding: conversations on social media drive an estimated 9% of consumer sales.

Survey data supports social media’s role: earlier this year, a survey from Deloitte found youth (14-33) more likely to say that recommendations from people in their social media circles highly influenced their purchase decisions than to say the same about TV ads.

W-O-M Has An Above-Average Impact on Tech Purchases. Compared to its 19% overall impact on consumer purchases, word-of-mouth seems particularly influential in the technology industry.

In fact, the Engagement Labs study estimates that fully 29% of consumers’ technology spending is driven by word-of-mouth, split evenly between offline (15%) and online (14%) conversations.

The Beverages sector is also highly driven by word-of-mouth, to the tune of 22% of consumer sales. This particular category is spurred more by offline (13%) than online (9%) word-of-mouth.

By comparison, social conversations online and offline play a lesser role in fueling consumer spending for pain relievers (14%) and beauty (also 14%).

Of the 5 categories tracked, online was the predominant driver of conversation-backed sales in one: groceries and food. Social media conversations in this category were responsible for an estimated 9% of consumer sales, compared to 6% share for offline conversations.

Meanwhile, although consumers ascribe more influence to word-of-mouth than advertising when making purchase decisions, Engagement Labs’ study indicates that advertising contributes to word-of-mouth success. In fact, about one-quarter of paid media’s contribution to sales was indirectly attributed to social influence.


Word-Of-Mouth Said To Drive Almost One-Fifth Of Consumer Sales. Social Media A Key
By Lance Hanish

Lance Hanish is Co-Founding Partner in CNA|Sophis Integrated Marketing Solutions one of the leading marketing firms serving the home furnishings industry. An award winning writer, director, producer and advertising/ marketing consultant, he can be reached at:

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