The incredible growth of social media has become part of daily life. Nearly every product, store, sports team, band, movie, you name it is on Facebook Inc. (NASDAQ: FB) and Twitter Inc. (NYSE: TWTR). Savvy retailers understand that it is not just the young who use and are drawn to social media. In a new report, the specialty retailing analysts at UBS highlight the companies that are not only effectively using social media and e-commerce, but increasing sales and brand as a result of it.
Social media is a key component of omni-channel strategy, and it is believed to lead to greater brand awareness and differentiation. About 20% of time spent online is through social media (mostly Facebook). Here are the specialty retailing public companies identified by UBS that are leading in social media utilization.
L Brands Inc. (NYSE: LB) has the highest number of Facebook fans with a total of more than 45 million spread across its multiple brands. With beautiful Victoria Secret models to grace some of its pages, it probably is no huge surprise to anybody either. L Brands also has the most Twitter followers at 4 million and the second most on Pinterest and Instagram with 1.8 million. The company pays investors a solid 2.4% dividend. The Thomson/First Call consensus price target for the stock is $60.81. L Brands closed Monday at $56.77 a share.
Abercrombie & Fitch Co. (NYSE: ANF) shows up well in the Facebook race, but its 19 million Facebook fans fall far short of the L Brands count. The company has slowly but surely started to rebuild what was once a very dominant brand. Its social media presence is cited as helping boost the image and sales. Investors are paid a 2.08% dividend. The consensus price target is $42.61, and the stock closed Monday at $38.50.
Gap Inc. (NYSE: GPS) comes in third with 15 million Facebook followers, and it has the most people checking into stores via Facebook at 228,000. The Gap is another rebuilding story that has taken some time. Once the premier outlet for everything trendy and cool, the company lost its cache and has spent years rekindling it. With multiple brands including Old Navy and Banana Republic also benefiting from solid social media exposure, the company has rebounded. Investors are paid a 2.2% dividend. The consensus price target is $45.69. Shares ended Monday at $40.06.
Lululemon Athletica Inc. (NASDAQ: LULU) does not have the dominant Facebook following the other stores have, but it has the highest number of Instagram and Pinterest users at 1.9 million, and it dominates in the number of Twitter tweets with 56,000. Given the specialized yoga focus of the store, that would seem to make sense. The UBS team thinks the company could be poised to see outsized growth based on international and category expansion. The stock has had a very up and down 18 months, but things seem to have settled down. The consensus price target is $58.11. Lululemon closed Monday at $52.59.
For retailers, or any other business trying to fight its competition, it is not just about fueling the fastest growing channel. Digital marketing and multiple avenues of social media outreach are engaging the consumer on a more personal level and expanding a brand’s identity and association beyond the products it sells. The name of the game is consumer mind-share in a sea of endless online stimulation and sensory bombardment. Savvy businesses will continue to engage their target audience via social media as long as they continue to use it.