If you haven’t heard, the buzz word these days is “Foursquare.” A small, New York tech start-up that is on its way to becoming the next biggest thing in social media. Foursquare is a location-based service that allows users to “check in” at places they frequent in their daily lives. By encouraging users to do this simple task, Foursquare is offering a huge draw to local retailers, and helping to bring back the long-outdated promotion tool known as the loyalty program. Not long ago considered an ancient and cliche business tactic, the loyalty program is having a rebirth by way of social media sites like Facebook, Twitter, and newcomer Foursquare.

Retailers like Tasti D-Lite are pairing their traditional loyalty card programs with a social media initiative that rewards visitors who Tweet about the brand. Also, when customers swipe their loyalty cards at the register, a branded Tweet goes out to their Twitterverse, creating a promotional win-win for the frozen yogurt company. Starbucks has a similar program that is being implemented with Foursquare. Each time a customer “checks in” at their local Starbucks, they earn points towards free drinks, food, and other rewards. Sounds cute, right? Or scary, for those of us who don’t really like to share.

There are plenty of other social media methods retailers are using to promote, sell, and engage their more traditional customers (read: privacy paranoids). The most interesting online retail sites these days provide a shopping experience that includes blogs, contest promotions, and links that immerse the shopper in the brand’s culture and introduce them to new products that may or may not be related to the primary brand. Although blogs aren’t technically a form of social media, they do elicit users to comment and share. And if they like what they’re reading, they’ll most likely visit the site again for updates.

Making shoppers feel special and creating online communities are both major aspects of social media marketing. As a lifestyle brand, a retailer like Urban Outfitters use their Facebook page and Tweets to not only keep their customers in the know about discounts and in-store events, but to promote community-oriented things like job opportunities, sharing behind-the-scenes secrets, and divulging music employees are currently listening to. Looking to be a indie-princess or a hipster that just walked out of Brooklyn? Fan the Urban Outfitters page and you’ll get all the insider info you need.

So what makes retail and social media a perfect pair? A few things: Where traditional methods of “push” promotion were seen as invasive–here’s looking at you spam email, social media campaigns engage customers through their own voluntary participation. Whether it’s thousands of users becoming Facebook fans of their favorite brand, or following their favorite stores on Twitter to catch the latest deals, social media is what it is: social. Buyers are involved because they want to be a part of whatever the retailer has to offer. And in this age of TiVo, spam filters, and pop-up ad blockers, this type of voluntary participation is what makes social media marketing invaluable. Instead of being x-ed out and deleted, social media makes brands worthy of being sought-out and repeatedly viewed.

Read the 2010 social media report:

2010 Social Media Trend Report

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