Social media has become a keystone in profitability for startups

Social media has become a keystone in profitability for startups

by: Courtland Schwerdt

SALT LAKE CITY— Thousands of companies have found success marketing through social media and keeping their operations online. It may be the era where physical locations are no longer needed.

There are approximately 2.34 billion users of social media worldwide, Pew Research Center reports. In the United States alone, daily social media users are estimated to exceed 221 million people by 2021, and will revolutionize how companies market themselves. It is free and provides millions access to content provided through media platforms like Facebook, Instagram, Snapchat and Twitter.

Instagram has payed out over $1 billion to celebrities and “fashion influencers” who market themselves and products from a variety of businesses. Social media is now a center-point in marketing strategies for businesses all over the world, with access to a billion users who spend an average of two hours each-day scrolling through content. Instagram has become a dominant platform for many fashion startups, because it allows them to lower overhead costs and maximize customer interaction.

Taking advantage of these mediums, Giorgio Verdi, a custom suit company that operates through Instagram and Facebook, has created a large following. The company was founded in 2017 by Ronnie Green and Giorgio Cuellar, two former students at University of Utah dedicated to providing unique and high-quality Italian fabrics.

Founders of Giorgio Verdi, Ronnie Green and Giorgi Cuellar

Through the remote nature of Instagram, Giorgio Verdi is able work all over the world without the need for a physical location. This is important since Cuellar lives in Dallas, Texas, and Green lives in San Diego, California. One of the greatest benefits for Giorgio Verdi operating through social media is being able to save money on building a headquarters. This has allowed them to focus on working with clients remotely. Some of their most high-profile clients — and an example of their influence in the online market — are Olympic swimmer, Ryan Lochte, professional skateboarder, Nyjah Huston, the Dallas Cowboys, and various MLS soccer players.

Among the benefits of social media marketing for Giorgio Verdi—the ability to interact with their clients on a personal level. They are able to make impressions on thousands of their followers in their target audience which has also built their success as an online company. 

“You know what, the easiest way to target our direct demographic is not through traditional marketing avenues, it’s directly through social media,” says Green. “When we first started marketing we decided that we wanted to target young new athletes and young professional who are starting at financial firms, guys that are young and want to look good, who wear suits everyday. So, really the only option that we had was through Instagram.”

Giorgio Verdi communicates with clients by searching for young athletes that are moving to new cities, sending them direct messages, promoting their suits and giving discounts directly to those who provide free advertising by posting photos of their newly tailored suits.

Social media marketing is unlike most traditional methods of marketing, with direct messages and the ability to target desired demographics, it’s easy to influence other followers because all the marketing is done in one spot, when a customer posts a picture of a product, they are distributing that content to their friends who fit into similar demographics. It’s essentially a trickle down effect and heavily increases brand awareness.  

“Social media marketing has been huge because it is so intimate and people are taking a chance on us,” says Cuellar. “It has really shown previous clients what we have done, whether that’s celebrities or athletes, it builds a lot of credibility. As a young company it really boosts consumers’ confidence when they can see people that inspire them and can purchase these products right on their phone. We don’t want to be out of reach with our consumers and social media allows us to have a conversation with our customers and really makes them feel included in what we are doing.”

Instagram stories have been a successful marketing tool for companies like Giorgio Verdi by allowing them to show their clients how they create and design products. It also allows consumers to get an honest perspective on how those products are made. 

“With a social media-type business, if you have a product that you are pushing, it’s all about finding who your typical consumer is,” says Chad Hernandez, founder of Cash & Co, a children’s hat company operated online. “Ninety-nine percent of people that follow that person share similar interests. It’s also important to consider your followers, they’re just like people walking in your store, but with social media it’s so easy to catalog and display your work and get your product out in the market.”

Hernandez believes that operating online has several distinct advantages. “I feel like there’s going to be a day and age where there will be no stores. With the rising cost of real estate it’s really an advantage to be purely online and why not cut costs if you can. It’s been huge for us not to have overhead costs and as a small business other companies purchase our products and put them in stores for us.”

Online companies are finding success by cutting costs and focusing budgets on social media while lowering overhead costs, meanwhile stores like Sears and Toys ‘R Us are closing doors for good. The ability to compete in a market where consumer can purchase a wide variety of goods with a single touch is invaluable. Online businesses are paving the way for the future of commerce.



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The data in this graph was collected from the U.S. Census Bureau and a Bloomberg Analysis