Why Social media in retail?

When the retail giants invest money in social media then you know it is important to their long term strategy:  in April Wal-Mart bought social media firm Kosmix and then Tesco bought BzzAgent for $60M. You can begin to understand that social media will be a crucial element in how retailers develop their marketing capabilities.

What is happening in retail?

If you walk through most cities and towns you can't help but notice the number of empty shops; in the UK over 14% of stores are visibly closed down and empty (source BRC). Over 26,000 shops have closed since the start of the recession and despite national chains grabbing the headlines the independent sector has been hit equally as hard.

Here are some figures for the larger retail brands that focus the mind on the scale of the problem:

• Roundup of 2011 U.S. Retail Stores Closing, Downsizing, or Going Out of Business


• In the UK closures include - Focus Group (120 stores, 3000 jobs), Comet (17 stores), Habitat (in adminsistration), Laura Ashley (16 stores), Mothercare (110 stores), HMV (60 stores), Dixons (loss -£224M), JJB (up to 95 stores), Oddbins (39 stores)...

We know that much of this is down to the recession, consumers being more careful with their discretionary spend. In many cases the recession simply caught these sleeping giants asleep; they were not in tune with the change in consumer buying behaviors which ultimately led to the inevitable consequences of having to forcibly downsize to remain profitable or even go bust: e.g. HMV: - the move to digital, pirating and new models of listening to music like Spotify, has had devastating consequences on high street music/dvd retailers. Take a look at this presentation by Gerd Leonhard on music 2.0. Using that example the next retail casuality is likely to be book stores as books move to digital, already the momentum is gathering behind the adoption of ebooks by consumers e.g. Waterstones.

Why Retail is important

• Retail sales are a major indicator of consumer spending trends because they account for nearly one-half of total consumer spending and approximately one-third of total economic activity (source Bureau of the Census, U.S. Department of Commerce)


• Retail accounts for 1 in every 8 job


• It is the largest private sector employer and employs around 2.9 million people or 1 in 10 UK and 14.4 million people were employed in the U.S. retail industry as of April 2010 (U.S. Bureau of Labor Statistics), representing 12 percent of all U.S. employment of the working population (source Sector Skills Council)

The Growth of Online Sales

“Online is continuing to set the pace in retail,” said Tina Spooner, Director of Information at IMRG (Retail Gazette 15th June)

The Online Facts UK

• After taking out the travel sector... the year-on-year growth for online retail sales is an impressive 21.5 per cent (source Retail Gazette)


• IMRG forecasts £69bn will be spent online in the UK in 2011 and predicts the market’s value will double in the next four years (source Internet Retailing)

The Online Facts US

• Online Retail Spending Reaches A Record $43.4B In Q4 2010; Up 11 Percent (Source Techcrunch)


• US eCommerce is expected to reach $278.9 billion in 2015 (Forrester)

With online increasingly growing it is important to recognize that this can be a key strategic component and provide a valuable way to develop brand awareness, market to your target audience...a good example is John Lewis who is extending their reach to international sales.

Some other trends worth mentioning:

• Forrester U.S. Mobile Commerce To Reach $31 Billion By 2016 (source: TechCrunch)


• F-commerce Rising: 12 Tales of E-commerce on Facebook


• Online Sales Share on Retail Sales Reaches New High


• Infographic - The New Face of Retail

If I was in Retail...How I would use Social Media

Increasingly people are accessing the internet whilst they are out and about; for emails, social networks and of course shopping. Whether people are researching at home, checking prices whilst in store, looking for reviews or asking friends (e.g. via Facebook) they are now accessing information where, when and how they want.

Retailers need to embrace digital touch points in shopper marketing (mobile phones, scanners, PDAs, digital screens, IPTV...) and to improve the customer experience in store.

What I would do

• If I didn't have an e-commerce site then I would get one developed so that my customers could easily buy my products online. This also immediately extends the reach of my business to a broader target customer.


• As more people spend more time on social networks I would:
  
  
  
  • Create a Facebook page (see and download our guide on Facebook here), Twitter account and YouTube account
  
  
  • Ensure that I had a link to my Facebook page, Twitter and YouTube clearly visible on my website
  
  
  • Ideally seek expertise to integrate Facebook into my eCommerce store just like Levi's producing a powerful way to understand who likes what products and create word of mouth marketing
  
  
  
  

 

• As Smartphones penetration continues to increase being able to present your business effectively on mobile is a necessity:
  
  
  
  • Ensure you have a mobile website (our previous post 5 reasons to have a mobile website) not least because people out and about can quickly contact you.
  
  
  • Embrace and integrate mobile marketing - Smartphone Marketing (slideshare)
  
  
  
  


• Facebook ideas:
  
  
  
  • Use your Facebook page to promote special offers or exclusives to people on your Facebook page. Building a community allows you to establish a relationship with your customers and saves your from having to repeatedly re-acquire customers campaign by campaign (see Olivier Blanchard blog)
  
  
  • Use a QR code on your landing page that directs people to a specific part of your ecommerce site for special offers
  
  
  • Create a feature tab/page that allows you to promote new items or feature new products
  
  
  • Have a page on Facebook for customer reviews and testimonials - if you sell on Amazon or other sites then you could link directly to your reviews these.
  
  
  • Use the photo section: create your albums as product categories and show photos of products (depending on your product you could sho people using your product e.g. Fashion retailer people wearing your items
  
  
  
  


• YouTube ideas:
  
  
  
  • demonstrate or show your products on videos - see how French Connection do this brilliantly. As video grows in importance as part of people content strategy
  
  
  • If right for your product get videos of people using your products or telling stories about how and why they use it
  
  
  • Run a competition involving videos or create an event for the competition, make it fun and video it
  
  
  
  


• Blog:
  
  
  
  • write a blog about your market that you are in not just your business or products.
  
  
  • Invite in guest bloggers. run a blog competition or best story/write interesting themes relating to your product
  
  
  • If you have a large business recruit a team of people who internally are interested in social media and would like to blog for the business, you then act as editor. This can demonstrate to your people to help and show that you are developing a more open culture/approach
  
  
  • Extend the reach to influencers - if your target customer is mothers there are several case studies of brands reaching out to mummy bloggers (see infographic My Moms on Facebook)
  
  
  
  


• Twitter
  
  
  
  • Engagement - you can simply post up interesting articles about your market/industry and invite people to comment.
  
  
  • Post up specials on certain days to drive traffic
  
  
  • Twitter is a great place to use for competitions - people can send in photos via Twtpic or you could get people to come up with the best reason why they like your brand/products in 140 characters or less
  
  
  • Many retailers such as BestBuy use Twitter as a successful customer service channel
  
  
  
  


• Blending online and offline


• QR Codes
  
  
  
  • see our feature on ScoopIt for lots of useful information and examples on what QR codes are and how they are used.
  
  
  • Use them instore to link to your Facebook page
  
  
  • Have special promotions in shop window - promote using QR codes
  
  
  
  


• Facebook deals/check-ins
  
  
  
  • we wrote an article showing how Facebook deals could be used
  
  
  • there are a variety of ways to use this; Facebook deals have little traction at the moment but that is partly due to the lack of retailers/restaurants that have used it as yet
  
  
  
  

Explore the Future

There are countless ways to use digital marketing and social media to develop customers experiences, this can be used in-store and online and this is where the future competitive battleground for retailers. Now is the time to invest, learn and develop multiple touch points, embrace social as a critical tool for marketing, customer service and importantly listening to your customers. The more retailers listen and learn about their customers the better they will be able to blend the online and offline customer experience.