The New Lifeline for Retail
During Christmas of 2007, a link to a YouTube video of a men’s a cappella group singing “The Twelve Days of Christmas” went viral. It was really not like any other version that people had ever heard. So what happened next? The only store that had 30 copies of the DVD by the group sold them all in no time. Internet Retailer reports that the popularity of the YouTube performance helped increase the sales of the store dramatically. The small store, with only two full-time employees, finally sold 5,300 copies of the DVD.
While this is a story that dates back a few years, the industry is still learning how to fully harness the potential of social media to boost brand awareness, engage customers and win business opportunities.
Retailers are in a process of fully understanding social media and its capabilities. While retailers recognize that social media is interactive, dynamic, involving almost real-time communication with the audience, they are still contemplating how audiences should be engaged on a sustained basis.
And with consumer’s buying behavior undergoing a dramatic shift, conventional marketing strategies are quickly becoming irrelevant. The change in the pattern of influence has translated into speaking directly to customers, defining new methods of influencing them and their buying habits.
Therefore, getting closer to customer sentiments becomes vital for proactively managing customer satisfaction. This is where social media is playing a major role: helping retailers integrate into their communication the new customer-specific data and market intelligence gained though the interactions on the various social media platforms.
Retailers have also realized that in addition to being an indicator of customers’ needs, social media is clearly valuable as a mechanism for customer relationship management. Responding to negative feedback on the social media “wires” can be a great way to manage brand image. Social media can also be an excellent source for acquiring new customers for niche businesses. For instance, tea connoisseurs can introduce each other to their favorite brands through Facebook, Orkut, MySpace, Twitter, Netlog, Google Buzz, Craigslist and the like.
Winning retailers are learning to engage their customers in a transaction even before they enter the store through cross channel communications. Retailers have been using the data gained through various social networks to understand what consumers are looking for. As the experimentation with social media evolves, retailers are beginning to expect a scenario where social media sentiment is interwoven into business iIntelligence systems.
Modern Retailers are Already Gaining by the Power of Social Media
Engaging the Customer
Leveraging the interactive capabilities within the social platforms, retailers are attempting to educate and motivate consumers. Discussion boards, “Ask the expert” buttons, threaded discussions, videos, images, reference quotes and many more tools are used to engage the consumers as retailers try to excite, educate, motivate the consumers.
Integrating Applications to Drive Insight
Integrating transactions and revenue generating applications into social media platforms is a huge challenge for retailers today. Applications that let you shop at a virtual fashion show, order a pizza or download the latest album from your favorite band are not rare. The tricky part is how these applications appeal to the consumers and how this appeal can, in turn, be transformed into insights.
The retail giant Target recently built an environment on Facebook dedicated to its “Reality check” program that markets products for college students. The page contained “webisodes” of a humorous show, ads, and quizzes among other things. The call-out to sign up for the email alerts was featured prominently. What did all these applications translate into? Apart from capturing the fancy of the customers and thereby the consumer insight, they got a huge number of brand ambassadors in the process.
Delivering the Right Information to the Right Target Audience
Social media platforms represent one of the most direct and immediate channels to connect to the millions of consumers almost immediately. It presents an opportunity to instantly deliver messages to millions of people. By gathering consumer insight through the various discussions that are happening online, retailers can use this insight to drive promotions that appeal to them.
Office supply retailer Staples built a “Tweet Team” of five customer service agents that patrol the Twitterverse, push out promotional offers, answer customer questions and more. To minimize confusion, and to create personality, each of the Tweeters uses a dedicated tag at the end of their posts to indicate who is talking. All this helps them to push great promotional offers that are of interest to their customers and hence drive sales and invite loyalty.
Burger King’s promotion asked consumers to sacrifice 10 friends (un-friend them on Facebook) in order to get a free Whopper. By playing with the core emotional driver of the user (number of friends) they created a promotion that had a powerful viral effect. For every friend that was sacrificed the users got a message telling them about a free Whopper sandwich from Burger King.
Tracking Consumer Opinion for Quick and Easy Market Research
Real time analysis of consumer trends, virtual focus groups, and other insightful interactions are all made possible at a fraction of the cost of traditional methods for gathering information. Social media is paving way for faster and cost-effective market research. Traditionally, brands seeking market research have had to rely on expensive firms that pool consumer opinions, feedback, and insights into structured presentations that cost both time and money.
When retailers are looking to launch new campaigns, knowing what the consumers are thinking about them, the answers are all there on the various social media platforms. Having access to tens of millions of consumers who are openly talking about their needs is the new gold mine for market research. Retailers like Sears and Kmart are leveraging shopper opinions through their interactive sites launched in 2009. Today they boast more than 400,000 registered users.
Enhancing Customer Experience
Social media also helps to derive value by building meaningful relationship through services that help retailers serve the customers better. For instance, Starbucks has launched an array of social tools across a variety of platforms from Facebook to the iPhone. Each application provides some utility for the customer, from store locators, to pre-ordering your specially customized drink before you even get in line.
Social Media: Revolutionizing Business Intelligence
With the proliferation of social platforms, an entire universe of consumer information has opened up. With so much data being created on the social Web, the potential to use the data for effective decision making is unlimited. And with the right tools, a company can track its customers, prospects and detractors, to learn what they think, what they are saying and who is listening to their opinions. All this can be smartly integrated onto the business intelligence
(BI) platforms to make informed decisions about the customer’s preferences. Social analytics
can also be used to determine a range of critical factors such as the focus of a new campaign or the optimal pricing for a product.
However, as companies build and integrate their business intelligence (BI) platforms, they grapple with a few issues. With data on the social Web coming from real people in real time, it is unstructured, and thus more difficult to integrate into the BI
system. Adding to this, the quality of obtained data is not always as desired. Such issues are overshadowed by the many benefits and the added advantage of speed and intimacy in the communication that the social media facilitates.
In short, social media is bound to spur dramatic evolutionary shifts in traditional business intelligence in several ways. The new BI system will need tools for collating vast pools of user-generated, subject-oriented, multimedia content. By enabling applications to monitor and mine growing streams of social media content, the new generation of social BI platforms will need to accelerate the convergence of data mining, content analytics, and complex event processing. This new BI platform will enable powerful social network analysis, sifting through continuous streams of transaction, behavioral, and sentiment data to identify influencers, brand ambassadors, and other key relationships in the various online communities and platforms.
The role of social media within business intelligence is becoming more prominent each day. Not only is information on the Internet being used to drive analytics, but the way in which BI is being presented is slowly shifting. This enables organizations to take advantage of social networking concepts to pull data together and to use it to view the marketplace and analyze customer preferences and profit from it. Obtaining this valuable real-time intelligence
and using it for incessant performance and profit with the help of social media and advanced BI systems is the new mantra for tomorrow’s retail.
SOURCE: Social Media: Driving the New Avatar of Retail Business Intelligence