Nielsen Online Retailers Social Media Webinar Clients

Listening & Engaging:

July 15, 2009

A Social Media Framework for Retailers

Maya Swedowsky – Research Manager [email protected]

© 2009 The Nielsen Company www.nielsen-online.com / www.nielsen.com

While online sales have grown steadily, the share of online sales remains relatively small

Source: U.S. Census Bureau2


However, what is becoming abundantly clear is the influence of the Internet on offline purchasing• Site to stores: What impact does my Web site have on sales that are

transacted in my stores?

• Online advertising on offline sales: What impact does my online advertising have on offline sales?

• Social media: What are people saying in social media about my brick and mortar business? What can I do about it?

Key takeaway: What happens online does not stay online

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What does this mean?

• Visibility into Internet behaviors is critical across the retailenterprise

• Social media strategy cannot be relegated to the Internet team in the basement

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Key Findings • Consumer-Generated Media

OverviewEstablishing relevancy for retailers

• ListeningOverviewPrivate label case study

• Engaging OverviewBest Practices

• Final Advice

• Q&A

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Consumer-Generated Media


Our CGM Dataset

Early-Stage Internet Today

Audio blogs

Usenet newsgroups

Discussionforums

Consumer blogs

Video blogs

Micro-community

sites

Ratings & review sites

Groups

Media blogs

Marketer blogs

Feedback portals

Mobileblogs

Social networksCo-creation

Type

s of

Con

sum

er-G

ener

ated

Med

ia

Twitter

From early newsgroups to Twitter, consumer-generated media (CGM) has come a long way and continues to grow rapidly

Video

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Twitter no longer just for techies -

1448% YOY

190% YOY

17% YOY

Unique Audience (Millions) for Twitter, Facebook, YouTube and MySpace, May 2008 – May 2009

10% YOYWho’s engaging in CGM?

Source: NetView, Home & Work, May 2009, May 2008

Demo IndexGender Male

Female98

102

Age 12 – 3435 – 4955+

10311591

HH income

$25K –$50K$75K–$100K$150K+

9999

105

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Metric May ‘08 vs. May ‘09

# unique visitorsTime per person

+9%+67%

Change in CGM Stats, YOY

Visitation up almost 1500% YOY as celebs and gen pop jump on the bandwagon


So, why is Social Media so big?

• Satisfies emotional need to be heard

• Gives ability to connect with one another

• Allows us to promote the things and people we love

• Easy, low barriers to entry, technology

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Purchase consideration process has always been a social endeavor; CGM brings it to a whole new level• CGM expands a shopper’s personal network of just a handful of

people to hundreds, if not thousands, of people

• Advocacy has always existed, but social media has made this stage even more critical, amplifying the size of the audience reached

MultiplierEffect

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CGM provides Retailers with two key opportunities: Listen and Engage

1. Listen – Observe naturally-occurring online discussion to understand consumer attitudes and needs, and answer key business questions

○ The promise of listening is compelling

○ Acts as barometer for passion

○ Provides early detection of risks, opportunities, happens in real-time – fast!

○ Enhances current research methods: “focus the focus group,” ask the right questions

2. Engage – Proactively and transparently encourage and take part in online conversations about you and the products you sell.

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Listening


Here’s how all companies should be thinking about listening…

Customer Service & Checkout

In-Sore Experience

Corporate Comm.

Crowd-Sourcing

.Com Experience Products

• Augment existing research, layer CGM into customer satisfaction tracking

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• Customer service• Return/coupon policy• Layout• Merchandising• Locations

And here’s how you should be thinking about listening as a Retailer

Crowd-SourcingProducts

.Com ExperienceIn-Store Experience

Products Marketing

• Informational resource• Transactions• Shipping charges• Weekly ads

• Selection• Availability• Pricing• Quality• Private label• Trial sizes

• Brand health – charity, sustainability policies

• Community relations• Coupons & circulars

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Listening: Private Label Case Study


Nielsen Online captures and analyzes CGM to gain insight into consumer perception and needs

Nielsen Online Content Reservoir• Over 110M blogs• Tens of thousands of forums and

groups• Social networks (e.g. Facebook)

and micro-blogging (i.e. Twitter) platforms

Analyst Team

Social NetworksBlogs

Forums Twitter

• Over 10 years of social media expertise

• Industry-focused analysts

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Note: Timeframe: last 90 days as of 5/8/09

“Store brand” discussion driven by Baby category

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Passion for Costco’s products, service drive its disproportionately large share of voice

Market Share Based on 2008 Revenue Buzz Share

Buzz share is depicted as a percentage of 546,275 mentions of Costco, Sam’s Club and BJ’s in 2008

Source: United States Securities and Exchange Commission

• When fans and employees noticed that Costco did not have an official Facebook Page, they created multiple Pages, with some attracting more than 50,000 fans. To put this in perspective, the largest BJ’s Facebook Page has just over 200 fans.

“Going to costco = religious experience”

“I love Costco. :) It is one of my favorite places ever. Literally”

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Buzz Volume for the Store Brands of Costco, BJ’s and Sam’s Club

Buzz volume is depicted as a percentage of 343,043,278 messages occurring between November 16, 2008 and May 9, 2009.

• Store brand discussion tends to account for less than 5% of club store buzz. More commonly discussed topics include:

• Prices• Membership fees• Name brand products

Costco’s private label line, Kirkland, maintains steady lead over club store brand competitors

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Price, comparisons to big name brands drive club store brand discussion

BJ’s store brands yield greatest share of discussion about price as parents discuss saving money by purchasing Baby products in bulk; for BJ’s private label products, price trumps quality

Costco’s private label line yields the smallest share of comparisons to big name brands, pointing to the possibility that Kirkland could be on its way to being considered a brand with an independent identity

Topics Driving Discussion for the Store Brands of Costco, BJ’s and Sam’s Club

Note: n =100 messages for each retailer, timeframe = Q1 2009; topics accounting for less than 3% of discussion have been removed for ease of viewing

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A

A

A

B

B


Baby category dominates club store brand buzz, presenting a large opportunity, especially for BJ’s

Almost two-thirds of discussion about BJ’s store brands focuses on diapers, formula and baby wipes

Product Categories Referenced in Discussion About the Store Brands of Costco, BJ’s and Sam’s Club

Note: n =100 messages for each retailer, timeframe = Q1 200921

A

A


Despite FDA rules, some moms are too “gun shy” to use generic formula

“OK so now that Jenna is FF quite a bit, I realize just how expensive this stuff is! I have been using the Enfamil Lipil and she loves it. I know there are generic formulas and the Berkely & Jensen brand is SO much cheaper (BJ's Wholesale

brand). But, I am gun-shy to use it. Anyone else nervous to use generic formulas or is it just me??”

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Safety concerns, lack of awareness of FDA regulation

BARRIERS TO ENTRY

“Has anyone used the Sam's club brand diapers? Do you like them? I was thinking

about trying them, but it's such a huge box.Does anyone know who makes them? If they are sold at another store as their brand I

could buy a smaller package.”

Large package sizes

BARRIERS TO ENTRY- iVillage.com messageboards, 03/05/09

- Ovusoft.com, 02/24/09

Engaging

“With social media is it about a true authentic connection with an audience…It's a way to engage people and it's an augment for your product... Don't think of it as a substitute for traditional marketing…It's a great amplification to what you are already doing.”John Andrews, senior manager of emerging media for Wal-Mart


Almost two-thirds of Retailers have already invested in CGM; another 22% plan to get involved within the next 12 months*

• 30.5% of Retailers say that social network presences will perform better as a marketing vehicle than paid search or search engine optimization in 2009 (Source: Internet Retailer survey)

• Not sure how to get involved? That’s why we’re here today!

*Source: Forrester Research24


Use CGM to power your business by enhancing your website and leveraging 3rd party tools

Customer Service & Checkout

In-Sore Experience

Corporate Comm.

Crowd-Sourcing

.Com Experience Products

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Give shoppers a reason to visit your website and keep them engaged, but focus majority of effort on expanding your footprint and reaching shoppers where they are already congregating

Retailer Website

Third Party Tools

Corporate Blog Product

Reviews

Forum / Community

SocialBookmarking

Chat Functionality Twitter

Social Networks

Video

Proactively and transparently encourage online conversations, participate and react quickly. All forms of engagement should support common goal/voice.

Blogs, Forums, Social Shopping & Product Review

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Best Practices: Customer Service

Twitter as key platform for providing customer service, in addition to more traditional outlets (24/7 phone line, email)

What is it?

Why we like it

Zappos’s 360 Degree Customer Service

Immediate – reaches shoppers where they’re already congregatingPersonal – gives Zappos a human element

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Best Practices: Product Reviews

Product review platform, includes free-form text as well as assigning # of stars

What is it?

Why we like it

Wal-Mart’s Product Reviews

Active – Wal-Mart reviews have accumulated critical massTransparent – feedback is not censored; W-M posts one star and five star reviews alikePersonal – allows customers to share photos of themselves using the productEasy to Share – ability to share review via Twitter, Facebook, Digg and del.ici.ousConnects Customers - customer Q&A Exchange gives customers the opportunity to ask each other very specific product-related questions before making a purchase

What’s next? Video – third party review sites (e.g. Expo TV) and a few retailers (e.g. Amazon) allow customers to post video reviewsExpert Reviews – have industry experts share professional reviews by video

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Best Practices: Crowd-sourcing

Micro-site encourages customers to submit ideas related to Starbucks products, experience and community involvement

What is it?

Why we like it

Starbuck’s My Starbucks Idea

Different - one of the few companies proactively leveraging customers for product developmentTransparent - gives readers an ongoing sense of involvement by categorizing submitted ideas as “under review,” “reviewed,” “coming soon” and “launched”Socially Responsible - Starbucks isn’t just taking by asking customers for product ideas, it is also giving by making changes to its environmental practices and community involvement, based on customer inputEncourages Community - ability for customers to talk to each other and Starbuck employees

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Best Practices: Internal Communication

Private social media platform for Best Buy’s 150,000 employees encourages communication and collaboration.

What is it?

Why we like it

Best Buy’s Blue Shirt Nation Mix

Different - one of the few retailers using social media internallyHighlights Importance of Customer Service – Best Buy believes that its employees are one of its best assets, as evidenced by its TV commercials, including its latest “True Stories”campaignEnhances Employee Satisfaction -allows engaged employees to share their thoughts and make proactive contributions to the company

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Final Advice• What happens online does not stay online • Assume consumer control/power will grow – listen to your customers• Get the listening piece right – no short cuts• Engage, participate, sense & respond• Nurture and protect brand credibility by being honest, open and

transparent – introduce yourself!• Do not neglect your website, it is one of your best marketing vehicles…• But focus majority of effort on reaching customers where they’re already

congregating• Rethink the strategic role of customer service• Think beyond loyalty to “advocacy”• Learn from everyone in your organization

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Thank you. About Nielsen Online

Nielsen Online, a service of The Nielsen Company, delivers comprehensive, independent measurement and analysis of online and mobile audiences, advertising, video, consumer-generated media, word of mouth, commerce and consumer behavior, and includes products previously marketed under the Nielsen//NetRatings, Nielsen BuzzMetricsand Nielsen Mobile brands. With high quality, technology-driven products and services, Nielsen Online enables clients to make informed business decisions regarding their digital, mobile and marketing strategies. For more information, please visit www.nielsen-online.com.Also, visit our blog at www.nielsen-online.com/blog.

About The Nielsen Company

The Nielsen Company is a global information and media company with leading market positions in marketing and consumer information, television and other media measurement, online intelligence, mobile measurement, trade shows and business publications (Billboard, The Hollywood Reporter, Adweek). The privately held company is active in more than 100 countries, with headquarters in New York, USA. For more information, please visit, www.nielsen.com

Nielsen Online Retailers Social Media Webinar Clients

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