Introduction

Within the past three years social media websites such as Facebook and Twitter have exploded in popularity, Facebook boasting over 1.01 Billion users as of September 2012 (Associated Press, 2012) and Twitter with over 500 Million users as of July 2012 (Lunden, 2012). These are two of the most popular social media platforms available, of course there are many alternatives such as LinkedIn, Orkut, and Myspace however for the best opportunities to communicate with customers and other users, Twitter and Facebook are potentially the most effective. Due to the large user base of these social networks there are new opportunities for businesses in which they can engage with their customers and potential customers. Businesses can use websites such as Facebook and Twitter to be pervasive in their customers lives by the immersion of advertising on the business page and users sharing and interacting with content which works as essentially free publicity and advertising for their products and services. This report is an analysis on the impact both positive and negative of social media on businesses.

Are social networking sites like Facebook, MySpace good for supporting a retail company?
As mentioned within the introduction, the pervasive nature of social network sites such as Facebook and Twitter into the lives of users can be used effectively for businesses by communicating with users directly. In this decade, the increasing pervasiveness of social media is fundamentally altering the methods by which, and through which, buyers and sellers interact. (Marshall et.al, 2012) This is a huge benefit to businesses of any size to improve marketing, brand awareness and improving customer service. Brand awareness and marketing can be achieved through social mediums directly or indirectly; directly would be the publishing of content on the company page and users which Like or Follow the page will see this on their Newsfeed unless they have removed the company from their homepage. There are two indirect methods; the first of which is advertising. Facebook facilitates advertising and markets the business to users which may be interested in the product or service the business provides, this is achieved through Facebooks analysis of its users and it creates. The latter statement is elaborated within Facebooks Advertising Guidelines: The best ads are those that are tailored to individuals based on how they and their friends interact and affiliate with the brands, artists, and businesses they care about. (Facebook, n.d.) The second indirect means of marketing is through the nature which page content flows through Facebook. If a user likes an item from the business page, it will appear on the newsfeed to all of the users friends. This may drive more users to the business page. Using Twitter for marketing is not as effective however it should still be used by businesses, Twitter boasts its real-time search system where users can search for products, brands, news etc. However, businesses can pay Twitter to promote specific tweets which will appear on peoples dashboards. [Businesses] can use external social web for recruitment and information gathering. And the most significant utilization is in marketing. There are increasingly businesses now post their product release announcement, photos to such social media sites like YouTube, Facebook, and Flickr for products promotion. (Hu, 2011) Andrew Durber CO3604 G20588812 08/01/2013 1

Another benefit to using social media, especially for small-to-medium enterprises (SME) is website maintenance. It can be costly venture for a business to create and maintain a website with any real functionality. Using social media, the crucial communication platform is already there; no developers are required, and no technicians. Facebook and Twitter are scalable and already have the resources available to increase performance and server capacity where a SME may not. Again, with marketing in mind and facilitating content for users, the users are already on social media and it can be costly to implement Search Engine Optimization (SEO) to the businesss personal website. Furthermore, gathering information about the customers is another aspect of business worth entering. If a business uses a personal website, it may be tricky or irksome to the user to gather information about them. Websites have the means to gather non-personal information such as their web browser preference, their location (with some degree of accuracy), and their operating system etc. Personal information will require user accounts, which, if the business is a traditional bricks-and-mortar retail company may be difficult to acquire. This is much less difficult if they also have an online facility which allows users to purchase products via the web as the user will be required to fill out their name, email address, gender and date of birth which will give the business a better insight to who their target customers are. With social media, all this information is readily available. Facebook allows page owners [businesses] to see a basic bio of the people who like the page such as the most popular age group, gender, and location. There are a number of social media analytics available to view trends such as SimplyMeasured which generates shareable reports about what your followers are talking about and even analyse competition. Another method to gather more information about the users is to create an application on MySpace or Facebook. Facebook have created a platform called Open Graph, using this platform businesses can immerse themselves in the lives of their users by creating a profile of not just personal information but also information to what music they like, where do they like to spend their time, what do they talk about and so on. This is very effective at creating a detailed profile of the customers which if course is beneficial to any business to help target products and services to a particular demographic. Lastly, the application developed for a retail company could be a portal to drive traffic to the business website. Businesses can use social media to communicate en masse to their customers in a blog (or micro-blog if using Twitter) like fashion, posting the latest news and products directly to their customers. However, perhaps an often overlooked purpose is customer service. With Facebook, Twitter, MySpace, YouTube and others, customers can communicate directly with the business and should get a response to the query or complaint by a representative of the business; this will improve clientbusiness relationships. A method which should be adopted by businesses to improve their customer service and also understand what people think of their brand is to develop a listening center, employing people to monitor the web, In this environment, companies should establish listening centers that monitor what is being said about their organizations, products, and services on social media, blogs, and other online forums. (French et al. 2012) In the journal article by [name](year) they concur that social media benefits to customer support It cannot be understated that an additional benefit of social media is its ability to allow a firm to be much more agile in its responsiveness to customers and the market. (Andzulis et al., 2012)

Social media has been proven to be very beneficial to businesses 42% of businesses believe that facebook is important, in the report by Hubspot (2012) the statistics are shown, The number of businesses that say Facebook is critical or important to their business has increased by 75% Andrew Durber CO3604 G20588812 08/01/2013 2

(Hubspot, 2012) This is an increase from 24% in 2009 to 42% in 2012. Furthermore, 62% of marketers said that social media became more important to their marketing campaigns in the last 6 months. (Hubspot, 2012). Social media can be very effective at improving and supporting retail businesses if they are implemented correctly and strategies developed to respond effectively to changes in technology, using social media analytics to understand their customers better is vital to embrace the new phenomenon in social networking.

What are the potential threats of using social networking sites for supporting a retail business?
With the use of any online platform, there are a number of risks which businesses especially should be aware of and should try to protect themselves from. Perhaps the most common concern for businesses is security. Malware is a very common security risk appearing in many forms and locations, According to Sophos, 40% of users were infected by malware from social networking sites. (Blue Coat, 2012) There is very little a user (or businesses) can do prevent against Soc-Ware (Social Malware). One method of preventing this malicious software is to use social media with caution and diligence by approaching links with caution and only using trusted applications. This is a risk to businesses which use social media in a couple of ways. Businesses usually have employees controlling the social media content and communicating with users, if the employees are not cautious with links and applications then they are likely to fall victim to phishing scams which can steal sensitive data; this could be in the form of login credentials to deface the social media page, this is damaging as it will tarnish the businesses reputation and trust with their customers. Another threat that isnt as direct as malware; it is the quality of feedback from the users. Customer feedback is important to any business as it can help understand what the customers want and can tailor their services or inventory (if they sell products) around the feedback. The issue with feedback is that it generally bad, customers which like a product do not give positive feedback as often as customers with negative feedback. Dissatisfaction with a product / service will often provoke a negative response. With the large amounts of feedback, the quality can be diminished. Unprofessional behaviour from the businesss social media employees could perhaps respond to users or post content which is unprofessional and damaging to the reputation and the brand, reputation risk can result from an organizations own communication activities, including their reaction to claims presented in the social media. (Aula, 2010) Businesses should assign trusted and professional employees to maintain social media content and communications to prevent poor conduct and help improve the brand. Reputation risk could be prevented by employing a screening method, employees create content, a public relations manager could screen the content and edit it appropriately and then approve it.

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How would a retail business incorporate your findings into their business strategy?
This report outlines how social media can affect a business, both positively and negatively. There are many benefits discussed within the first section; brand awareness, customer service, customer profiling, and why social media is a low-cost and effective solution for businesses. Businesses can implement the findings within this report effectively if done correctly. Furthermore, this report also outlines some basic risks with social media which can be avoided; malware, phishing, customer feedback, and unprofessional conduct. Businesses should utilise all the social media platforms which are relevant to their organisation. Facebook and Twitter are perhaps the best two options to engage a large amount of users and allow the users to share and interact with the business. There are a number of alternative social networks which can and should be used depending on the area of the market which the business operates in. MySpace is one of the most used social networks for musicians as it allows for a medium which music can be shared and information relating to the artist can be found. However, for a retail business, if the business is the music industry there are social networks such as Reverb Nation, however Facebook is still the best option. How will the business incorporate the findings into their business strategy? Businesses should first increase brand awareness, this can be achieved by the use social networks to attract new customers and build up customer trust and a reputation. Paying for advertising space on Facebook or paying to promote Tweets on Twitter will help them achieve larger brand awareness. To improve the reputation of the business, a code of ethics could perhaps be created, a set of rules which must be followed by all employees publishing content. Employees must respond appropriately to customers, a good customer service can help increase the reputation of the organisation. Employees could perhaps be made to forward their content to managers for approval, to ensure that it is suitable for the brand and will not damage reputation. Employees should also be trained in web security, teaching them to change their password regularly and not to click specific links which could infect the social media account and the brand damaged. Businesses should understand their customers; with social media this is much easier than it was a decade ago. As discussed within the first section, businesses could create an application to sell their products / services and through which, crucial information can be gathered to help tailor the inventory or the manner in which content is published. Using social media analytics can also be utilised to create reports on how customers interacted with content. How many retweets or likes a content item has reflects how well it was received, comments and tweets can be analysed for key words, analysts can view the report to understand why specific content items were more popular than others etc. If the business in question is a small business with no or a small static website, Facebook and Twitter can be used as a customer service system where customers can query the business. No complex website is required and there will be no issues with scalability as the business brand grows in popularity. Eventually however it is recommended that the business improves its personal website as official websites are more trusted and the business isnt dependent on other services for their success, social media can still be used as a portal to generate traffic and communicate with customers.

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Conclusion
Social media shouldnt be used as the sole platform in which a customer facing business operates; it should be used to engage its customers. It should be used to post news and content in a blog-like fashion, post promotional offers to generate interest and boost sales, it should be used as a portal to generate traffic to the business website. Social media is an extremely effective tool if utilised correctly, only within the past 3 or so years has it really taken off. Social media allows for small businesses to grow, these are opportunities that have only recently come about. If social networks are not used effectively and intelligently, businesses face a reputation risk which can easily be avoided. It is a technology which every business must consider in their business strategy. As the statistics from Hubspot (2012) show, more businesses and marketers are embracing this technology, it is a risk well worth taking.

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References
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