The retail sector may be keeping an eye on Gap with its Australian store just two days old, but the denim giant is turning heads overseas by managing to record $US11 million in sales in one day from a viral coupon offer through collective selling site Groupon.
The offer is an example of how a well-constructed social media marketing campaign can not only benefit a company’s reputation but deliver them a solid financial return for a relatively cheap investment.
“I think this is a perfect example of how social media should be considered part of the broader marketing strategy,” chief executive of reputation management firm SR7, James Griffin says.
“Gap and Groupon have used different planks of the marketing department, launching on a variety of channels. It’s a great example of why social media shouldn’t be used as just a splinter of the marketing budget, but rather it has a place being connected with the overall approach.”
The Gap campaign was overwhelmingly successful, with Groupon at one point selling 534 Gap coupons per minute in its most successful campaign yet.
Gap says a combination of email marketing and a social media push allowed the offer to spread relatively quickly. While most viral campaigns start by accident, the Gap/Groupon sale was a calculated push through several digital marketing channels, all launched at the same time.
Firstly, the company used a comprehensive email database to send out information on the Groupon deal. One email was sent out at midnight, ensuring users saw the email first thing in the morning, with about 15 million recipients receiving the message throughout the day.
An emphasis on social media also allowed more customers to jump on board. The offer appeared as Twitter’s “earlybird offer” for the day, reaching another 180,000 users. Gap also made its own tweet and then promoted the offer on its Facebook page.
At the same time, Groupon was working hard to campaign the offer, given the barely two-year-old company is working hard to push big-name brands. The company updated each of its Facebook and Twitter accounts for the campaign, while about 1,500 affiliates promoted the Gap offer as well.
Olivia Doyne, director of engagement marketing at Gap, told Mashable the idea was to push the discount to as many people as possible in the time they had.
“We’re always looking at new and innovative ways to connect with our customers, and we know many of them are Groupon subscribers. We thought the timing of our exclusive Groupon offer would be ideal as people begin to build their back-to-school and fall wardrobes.”
But the whirlwind sale, which offered 50% off various Gap merchandise in preparation for the new school season, pushed Groupon to the edge with the company struggling to keep up with demand.
“We couldn’t keep up with it for awhile,” Groupon president and chief operating officer Rob Solomon told Reuters. At one point, the company’s servers struggled to accommodate the massive amounts of traffic.
The offer was Groupon’s first national campaign, despite the company already being valued at about $US1 billion after receiving funding from Russian group Digital Sky Technologies earlier this year.
Original Facebook founders Accel Partners, which also invested in Australian firm Atlassian earlier this year, have also provided capital. The company expects $US400 million in revenue this year, Reuters reports.
Groupon has pioneered the “group buying” trend, which promotes various discount offers as long as enough people sign up. Solomon is especially pleased with the success of the Gap sale, given Groupon’s continued success depends on as many people as possible signing up to the site.
While the company emerged slowly as a distributor of localised coupons for individual cities or regions, Solomon believes the company’s key to growth lies in pushing these national campaigns with well-known brands, which will help foster the sense of community on the site and make coupons more popular.
“There’s a lot of room to remain hyper-local, but to introduce super-specials, like for Gap,” Solomon says. “Gap is a testament to demand for the big guys.”
Griffin says businesses can learn from both companies and start developing social media campaigns that encourage users to pass on discounts to their friends.
“Again, the message is to bring your social media messages together, and use them as one, not just push them off to the side,” he says.
Patrick Stafford is a freelance journalist and a former deputy editor of SmartCompany.
