Archive for the ‘Social commerce’ Category.

How can social data help drive brand loyalty?

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Social media customer loyaltyWhile a consumer drives down their road, what triggers their decision to go to Tesco as opposed to Sainsbury’s? As they switch on their laptop to shop online, is it Ocado.com or Waitrose.com they visit?

While the flat economy keeps consumer consumption weak, retailers are looking to pull levers other than just price to build brand loyalty.

Short term vs. long term customer loyalty

Price differentiation is clearly unsustainable and confusing for consumers in many cases. Whilst price matching might be good for the consumer in the short term, it negatively impacts the bottom line and does not lead to increased loyalty in the long term.

In a recent study by loyalty360 it was revealed that 84% of respondent retailers use some form of loyalty strategy, but surprisingly less than half (48.8%) believe their initiatives are working.

Therefore, what can drive loyalty in the longer term?

Having a single view of the customer is increasingly challenged by consumer uptake of multichannel. A consumer expects to be able to research a product or service using one channel, order it via another, and potentially take delivery via a third, with the expectation that the retailer is aware of each and every activity and delivering a consistently seamless service.

Consumers also expect the same authentic brand experience whether they are communicating via a brand’s website, social network, or speaking face-to-face with a representative.

How can social data be used?

So how can brands use social data to drive loyalty? How can it help make every moment memorable for the customer, while still affordable for the retailer? Beyond responding to customer service queries in twitter and other social networks where else can social build customer loyalty?

One way is by using social data to anticipate future customer behaviour. For instance, by seeing what is trending and delivering a better marketing message accordingly. This could take the form of tweaking a website in real-time, with the intention of more prominently displaying items customers are discussing online and showing a propensity to purchase. In this way the brand is clearly identifying with its customers in real time and using that data to make it easier for them to find the things they like.

Another example is if a customer has a goal to lose weight, their supermarket could use the data they have collected through a traditional loyalty programme (in relation to the customer’s food purchases), and make that data available to them to calculate their calorific intake. This data powering an app could then be used by the customer to manage their diet, making them more likely to continue shopping with that supermarket in particular because it is collecting their data and using it to benefit them.

These are just a few ways in which social can play a big role in driving and maintaining customer loyalty, and ways which give the customer benefits beyond discounts for being loyal.

Image credit: Karen V Bryan

Eventbrite makes £2 for every social share. What can we learn?

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Golden Ticket

Golden Ticket (Photo credit: Derek Lakin)

Ticketing company Eventbrite has released its social media data and shows that it make an additional $3.23 (or £2.01) in revenue every time an event is shared on social media. This is highest for Facebook (£2.56 revenue per share) followed by Twitter (£1.15) and lowest for LinkedIn (£0.57). These figures look great. But what does it say about social commerce and what can other brands learn?

First it is worth exploring these numbers a little bit more. Twitter drives the most clicks (almost twice as many as for every share on Facebook) but these are much less likely to lead to a sale. In fact for every click through from a share Twitter generates the least revenue (just 3p per click compared with 18p for Facebook and 6p for LinkedIn.

So we can surmise the following:

  • When an event is shared on Facebook more revenue is ulitmately created per share than on any other social channel
  • People are more likely to click through to an event on Twitter than on any other channel but they are less likely to purchase

Facebook not only generates more revenue per share, it is much more efficient at it.

The social nature of ‘events’ as a product

This allows us to explore a little more what is happening in social with Eventbrite, and whether the ‘success’ they have had with social shares could be repeated for other brands.

Eventbrite’s product is events, and these are inherently social; we typically go to an event with people - friends or colleagues. So should it be any surprise that when these events are shared on social channels other people go ahead and book. A simple look at how Eventbrite events are shared on Facebook shows a long list of people telling others where they are going and asking them to go with them. It should not, therefore, be surprising that some people do.

In fact the nature of the product means that the shares are different to most products that people share in social.

  • If the product you share were a pair of shoes, for example, you are likely to be saying ‘I like these shoes’ or ‘I just bought these shoes’. These are personal reasons with no clear call to action for your friends (except a bit of jealous perhaps).
  • When you share an event you are usually saying ‘I am going here, you should too’ or ‘Anybody want to come with me to this event’. You are giving your friends a clear call to action to click through, attend the event and spend money.

So on this basis it is no surprise that Eventbrite should be generating revenue like this from social shares. And it should be no surprise that Facebook is the most efficient way of getting this revenue; the connections you have with people there are typically stronger than on Twitter.

But could these revenue numbers be shared by other products? Unlikely, unless your product is also social in nature. This is a great example of where social does make sense - the product is social, you experience it with other people, and so making it easier for you to find others to attend the event with makes absolute sense to the consumer and the brand.

The key thing we can learn from Eventbrite? Use social in the ways it can have biggest impact on your business. And this depends on what you are selling and to whom; one solution is not right for all.

WalmartLabs - taking Big Data into retail

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Walmart Labs

Walmart, the world’s largest retailer, acquired social media firm Kosmix just over a year ago, creating @WalmartLabs, with the intention to use this specialist R&D unit to define the future of commerce by merging social, mobile and retail.

So far WalmartLabs has released two interesting developments using social:

ShopyCat gift recommendation engine Walmart Labs• ShopyCat - the gift recommendation engine

This Facebook application uses your Facebook profile to suggest suitable products for you, based on the interests and hobbies of your friends. An interesting aspect of this approach is that the app will offer links to other retailers if Walmart do not stock a suggested item in their own stores.

The notion that the app may steer customers away from Walmart may seem unusual, but the brand sees more long-term gain in making the service as useful and relevant as possible to its customers.

• Get on the shelf - innovative product pitching

‘Get on the shelf’ was a contest that allowed innovators to pitch their products to Walmart customers, who then voted for the ones they would like to see Walmart stock.

Over a million votes were cast, narrowing the field down to three products that will now be available to purchase in Walmart: a DIY-screw replacement system for glasses; an airtight plate cover for food storage; and the overall winner - a socially conscious bottled water whose company donates its profits to provide clean water supplies.

The next step - Big Data

These examples are innovative approaches to using social media to encourage sales and generation of inventory, but the area that I think will prove the most fascinating is how WalmartLabs will leverage “Big Data” to develop the retailer’s ability to predict market demand and so optimise their supply.

Understanding and fulfilling local demand

This is where the situation becomes truly interesting - stores will be able to optimise their inventory according to their area’s specific tastes and seasonal demands.

One of the examples WalmartLabs’ Venky Harinarayan offers is that of college football. By monitoring social media buzz during college football season, Walmart is able to determine when discussion about college football in a certain locality is beginning to heat up. This lets them know when they should be stocking products that are related to the season and local teams.

Creating demand and making recommendations

As ShopyCat has demonstrated, recommendation engines enable customers to discover new and relevant products, either for themselves or their friends. As I mentioned above, ShopyCat currently directs customers to alternative suppliers, but from understanding customer behaviour and using Big Data, a logical evolution would be for these alternatives to become increasingly niche as Walmart develops supply according to consumer taste.

The ability to bring all of these channels together in-store via mobile will be significant. WalmartLabs are developing in-store navigation using mobile, so I would expect to see apps that offer customers information and the location of recommended items, or prompts for items of interest that are already in close proximity. A reminder of a friend’s upcoming birthday and interest in fishing, while you are passing the sports section, for example, would help you make a relevant purchase while saving time and hassle.

China: The Future of Social Commerce

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We recently highlighted the surge in ‘Chinese Pinterest clones’ on this blog and when asked by the BBC to comment on an article on the same topic, I mentioned “I am looking to these Chinese clones to provide the next key paradigms in social commerce.” Two days later, we excitedly read the McKinsey China report on  ‘China’s Social Media Boom’; the results were impressive.

Chinese netizens

China’s internet audience is huge – over 500 million – and growing rapidly. More importantly, this audience is active with over 50% spending more than 12 hours a week online. 95% of netizens living in cities with a population in excess of 2.5 million are registered on a social networking site and Chinese internet users spend an average 46 minutes per day on such sites.

Trust in Chinese e-commerce

This has great significance. This is already the largest internet population in the world and it looks like the most actively social. The Chinese internet population is also heading towards forming the largest e-commerce market in the world by 2015.

China predicted e-commerce boom

When I lived in China 2006/2007, it was nigh impossible to order physical goods online – trust in infrastructure was simply not yet there. The impressive growth in e-commerce sales indicates a greater trust in China’s postal network and e-commerce sites.

The issue of trust is important in marketing to Chinese consumers. Peer-to-peer recommendations have a more profound impact, as the McKinsey report says this is likely due to a distrust of formal institutions. Building networks of trusted influencers – not as a commodity but as groups of people who can and will trust your products and messages – will be crucial to online interaction with Chinese netizens.

Social Commerce

This leaves the issue of social commerce. One of the more interesting insights into the rise of Pinterest clones is that they tend to have closer links with e-commerce. While Pinterest has had trouble implementing its revenue model, Chinese sites like Faxian showcase what can be bought and funnel users to a purchase.  Per McKinsey:

‘As e-commerce rises, a compelling opportunity for brands will be to prompt immediate purchases online by consumers searching for product information using social media.’

The key to unlocking these immediate purchases will be through harnessing netizen recommendation.

Creating engaging content: US department stores Barneys vs Saks in social media

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They’re two of the most iconic department stores in New York, but just how well are Saks Fifth Avenue and Barneys using social media? We used Social Bakers to take a look at these two US retail giants and see whether they are making the most of their brands online.

Despite being a mere ten minute walk down the street from each other, Barneys and Saks are already miles apart when it comes to Facebook fans. Whilst Saks has a healthy 288,000 fans, Barney’s has almost half with 162,000.

But as we all know, it’s not just about how many ‘likes’ you’ve got but what you do with them that counts. In the battle of the department stores, who is really engaging with their customers in social media?

If we take a look at the ‘talking about this’ numbers for the two pages, Barney’s has 3,610 whilst Saks has 3,607, despite the greater number of fans. This suggests that Barneys must have a well thought-out content strategy which engages its audience much more effectively than Saks.

So what is this content strategy and how could Saks learn from it?

Think about when you post your content

First of all, looking at the data from Social Bakers, Barneys gets its best rate of engagement between 8-9am in the morning, whereas Saks gets a good (but not as high) rate around lunchtime.

Barneys also has a nice increase in engagement at around 9pm, whereas engagement on the Saks page has generally tailed off by this time.

This suggests that Barneys are making the most of those pre- and post-work Facebookers by posting earlier in the morning and later in the day. As we all know, social media never sleeps, but it looks like Saks may not have got to grips with this fact as strongly as Barneys has. Even if your staff work 9-5, they should be using the right tools to ensure that the page is pushing out content at the best times for your audience.

Think about what type of content you post

Interestingly, it looks like Barneys almost exclusively post links on their Facebook page. They create a strong call-to-action by posting links to great items in their stores with short, punchy copy such as “Flirty. Feminine. Floral”. It invites the fan to read, agree and hit those ‘like’ buttons, leading to an engagement rate of 0.06% on links compared to Saks’ 0.03% rate.

In contrast, Saks Fifth Avenue posts more varied types of content. Their main focus appears to be photos which are often posted using their ‘Involver’ fanpage tool. These photos don’t appear very big on their timeline, but still seem to get their highest rate of engagement with content on the page with 0.06% of fans interacting with these. However, they still do not manage to outstrip Barneys with any types of content.

It may be that Saks need to look at how their audience is responding to their content. Community management requires constant analysis of how your posts are going down with your audience – if something works well, it makes sense to experiment with posting it more often. Similarly, if something is not working for your fans, it may be worth looking at changing your approach or posting more infrequently.

Keep it short and simple

It is worth taking a moment to look at Barneys’ impressive 0.14% engagement rate on their status updates. Both pages post status updates, so why are fans interacting with Barneys more than with Saks? Have a read of the following updates and think about which one you are more likely to like or comment on…

It’s important to remember that Facebook fans have a notoriously short attention spans, so instead of asking them to try and figure out the sentence and fill in multiple blanks, Saks should be asking more short, simple questions like the one from Barneys.