Why Social Media Is Driving Shoppers to Shop Locally

Getting the word out on your jewelry store used to be as easy as paying your annual Yellow Pages bill and printing up some nifty flyers. But the Internet has forever altered the way word-of-mouth reviews ricochet through communities.

In particular, shopping-minded social media sites such as Foursquare and Yelp—which post user-generated reviews of businesses and services—are shaping the way people shop. And, says retail expert Lindsay Carpen, driving consumers to shop locally more than they have in years.

We caught up with Carpen, the consulting director of Junction Solutions, a software and services business geared toward the retail sector, to discuss how social media is changing the shopping equation.

JCK: How would you characterize the role of location-based social media sites in the modern retail landscape?

Lindsay Carpen: In terms of technology, we’re still trying to figure out what to do with all this stuff. But I think we’re becoming more and more willing to trust it. User reviews are everywhere. There’s even a whole industry now that will come in and whitewash your social reviews. These sites have become really important to small businesses.

Jewelry is a very fragmented business. It’s [composed of] hundreds and thousands of businesses that are small that have unique services. So social media sites are going to fit them well. These sites are suited more toward and smaller businesses; they’re a way that you would be able to get the word out without telling people how great you are. Other people are doing it. It’s much more powerful.

JCK: How is social media incentivizing people to shop locally?

LC: People buy things locally anyway. Now they can see [from the user reviews] exactly what that store or service offers, making it more likely that if they have the thing you’re looking for, you’re going to go there.

JCK: Is there a foolproof way for jewelry stores to generate positive reviews on these sites?

LC: By asking the classic closed-loop marketing question: “How did you hear about us?” You could spend a lot on advertising, but if you’re not asking “how did you hear about us,” you’re flying blind with that marketing. It’s pretty important to understand where your customers are coming from.

Then you should ask them to put comments on Yelp or Foursquare instead of, say, putting a suggestion on your company website. I think there’s less resistance to doing something in social media, because it has more status, then sending an email to some generic email address.

JCK: Is there any measurement for how these sites are affecting the bottom line?

JCK: I think it’s largely unmeasured. There are a lot of companies that don’t understand it or don’t use it. More often than not, they’re trying to shut these [sites] down or control them. It’s difficult for them to understand that they present an opportunity to really stand out.