The Future Of Social Retail

L E A D E R NETWORKS

Copyright © 2011 Leader Networks, LLC 1

Social Media For Retail

Best practices to aligning strategy with operations

Presented at the Indian Retailers Association

June 6, 2011, Mumbai Conference Center

A Discussion with Vanessa DiMauro

CEO Leader Networks

@vdimauro


Copyright © 2011 Leader Networks, LLC

Retailers + social media …. everywhere

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But is social media marketing all that social media offers?

Current wisdom is that social media is social media marketing

…..and that social media marketing is the panacea for retailers

Current wisdom is that every retailer needs a Facebook page or a Twitter stream in order to sell more stuff.

Social retail hype abounds!



Lets examine the complexity

1. Everyone retailer is thinking about social media marketing

2. The financial ROI on social media marketing is unclear

3. Some powerful case studies and best practices are apparent

4. The social business adoption trend is huge and growing

5. There are patterns around social retail winners and losers that can be repeated



FACT: In 2011, 72%, of retailers plan to

spend more on marketing via social networks than in 2010…..(Yet) only 29% of respondents say social marketing has helped grow their businesses.Source: Annual State of Retailing Online survey conducted by Forrester Research Inc. for Shop.org, 2011



FACT: While 65% of retailers have a

Facebook 'fan' page, only 4% have an integrated shopping function within their fan pages.Source: Social shopping 2011 study, Oneiota.co.uk



FACT: Social media marketing rarely leads

directly to purchases online ….less than 2% of orders were the result of shoppers coming from a social network.

Source: The Purchase Path of Online Buyers report 2010, Forrester Research and GSI Commerce



BUT, there are many success stories that buck the trend

Consider this example

The DellOutlet Twitter account

• has 1.5 million followers

• About 50,000 views per tweet

• About 500 clicks per tweet offer

• Likely number of sales per offer 50

50 purchases x $500 computer = $25,000 in revenue per successful tweet In 2010 Dell reported

making more than $3 million

on sales from Twitter click-

throughs alone.



And more success stories

JIMMY CHOO: Twitter account to geo-locate their new sneakers

– +33% increase in sneaker sales, a 40% increase in positive mentions and 4,000 followers.

WET SEAL: Online community for teens to talk and rate clothes and trends.

– 21% increase in revenue, 10% increase in sales, 10% increase in the av. purchase per customer.

PAMPERS: Social diaper promotion program

-- 1,000 diapers sold in 11 hours on Facebook

SEARS: Sears.com Shoe Experience Website, a 450-brand emporium

-- Reports ROI of $10.00 for every $1.00 spent

BURBURRY: At Burberry’s Art of the Trench, you can choose a coat, share it online & upload your photo.

-- In the first 8 weeks, 330,000 visitors from 191 countries. 85% increase in sales during that time.

STARBUCKS: Starbucks online community mystarbucksidea.com

-- Over 100,000 customer suggestions, and it had implemented over 100 of those ideas.

http://www.jeffbullas.com/2009/09/01/5-case-studies-on-companies-that-win-at-social-media-and-ecommerce

http://www.burberry.com/

http://artofthetrench.com/

http://mystarbucksidea.com/



Why do some succeed

And others fail?



The businesses that succeed skillfully leverage the information and relationships gathered through the social channel throughout the organization’s value chain.



Which is why retailers need a social business strategybefore they need a social media marketing presence

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Wiki

B2B

B2C

Twitter

Facebook

LinkedIn

Blog

Intranet

YouTube

RSS

On-lineCommunity

ThoughtLeadership

CustomerRetention

UnstructuredInformation



Distribution

Product Groups

Product Development

Sales

CustomerService

MarketingMarketing focuses on getting fans & followers to view its marketing campaigns

Marketing doesn’t use Facebook, Twitter, etc. to transact

Marketing doesn’t mine interactions to identify new customers or feedback

Customer Service monitors Facebook, Twitter etc. for angry customers

Customer Service resolves customer issues

Customer Service doesn’t share customer problems with internal stakeholders

Customer Service doesn’t pass along pleased customers to Sales or Marketing

And most organizations have Social Media Muddle

Social success stories have integrated business processes


Copyright © 2011 Leader Networks, LLC 14

Distribution /Partners

ProductDevelopment

Sales

Suppliers

Marketing

Internal Processes

External Social Media

Activities

Social business needs operational alignment to succeed

SocialMedia

Strategy

Customer Service

Twitter RSS

Facebook

LinkedIn

Blog

Wiki

On-lineCommunities

Web 2.0

B2B

YouTube

ThoughtLeadership



You need to know where you are going …

in order to get there successfully



There are six ways retailers can benefit from a social business strategy

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Product Groups

Product Development

Sales & Channel Partners

Customer Service

Marketing

To help customers get more value from their products and

services

To improve the way they enhance

products and services

To develop betternew products and

services

To market and sell more

effectively: Awareness and

desire

Extend buyer loyalty,Identify future trends

Social Business Strategy

To influence the social media

conversations about their

company/ products



The value chain is forever changed due to social business

Marketing input

Manufacturing Units

Wholesalers

RetailersCustomers

Old Process

Twitter follower

Twitter follower

Twitter follower

Twitter follower

Twitter follower

Twitter follower

Twitter follower

Twitter follower

Twitter follower

Twitter follower

Twitter follower

Customer reviews

Promotion or group buying

experience

CRM system ERP SystemCloud



And, the traditional purchase funnel no longer exists

Awareness

Consideration

Preference

Shopping

Purchase

Tools

Blogs & comments

Twitter

Youtube

Email

Slideshare presio

Facebook group

Quora mention

WOM campaign

Online advert

Social Business Processes

Social recommendations

Online affinity groups

Community forums

Group buying experiences

Influencer relations

Traditional marketing



We can now differentiate messaging by demographics, interests, locations, history…..

The Social Media Success Factor:

The who dictates the where, when, why and

how.

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Gen Y’s are more influenced by peer referral than any other generation

before them…..



And thread social business throughout the enterprise

• Create influence campaigns from Press to Mommy bloggers

• Extend customer loyalty efforts online

• Increase product awareness & desire

• Socially source new product ideas

• Unleashing social shopping to reinforce the buyer decision

• Extend the customer service to online, and

• Seek cost reduction through improved core business process

• And revenue by connecting social media marketing to social business process



The benefit of online community for many retailers

+ =



Walmart’s “11 moms” community



IKEA Fan’s community



Gucci Facebook community



“Socially Present”

“Socially Familiar”

“Socially Integrated”

“Socially Enabled”

Design for marketing presence

on the social channel in order to

communicate information and

ideas online and drive

awareness.

Design for leveraging

information and relationships

gathered through the social

efforts in support of key

business functions.

Design for learning about cause

and effect online. If I do this, this

will happen….

Design for scale and best

practice using social as a

common marketing and

customer care activity.

Inte

rnally

focused

Exte

rnally

focused

- Organizational Complexity +

Social business maturity model framework



Presence Integration

Familiarization Enablement

Strategic

Operations

Staffing

Governance

Tool Use

None Limited Moderate RobustHealthy

Strategic

Operations

Staffing

Governance

Tool Use

Strategic

Operations

Staffing

Governance

Tool Use

Strategic

Operations

Staffing

Governance

Tool Use

Social Maturity Performance

http://en.wikipedia.org/wiki/File:Harvey_Balls_Small.jpg



























The social business imperative

Social business is

the collaborative intersection

of business needs and customer desires.

For social business to be fruitful, it must solve a real business problem or make a business process easier using the online channel.

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Social business = organizational change

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Strapping new tools onto an old process won’t yield the desired results



Measuring success

STEP 1: Defining the customer experience and member value propositions that lead to metrics

STEP 2: Align the business definition of success and a customer version

STEP 3: Determine quantifiable measures

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Six sample success measures

1. Did we increase customer engagement? If so, how?

2. Did we see an increase in positive mentioning of our brand?

3. Were we able to reduce customer service overhead because of our social media efforts?

4. Were we able to reduce our PR costs because of our social outreach?

5. Did our website engagements and goals increase?

6. Did our overall sales revenue increase?

Forget about measuring fans and likes unless they are tied to specific business goals!



The future of social media retailing

– Social commerce

• group buying

• The importance of customer reviews

– All things mobile

• Social geo-location services (such as Foursquare)

• Social mobile commerce

– Online community

• Brand affiliation/loyalty especially with niche brands

• Hyper affinity/personalization

– Ability to tap into passion and interests of people

– The collaborative retail enterprise experience

• Programs and process to enable the customer to directly influence the merchandising and inventory

Crystal ball



Thank you

Vanessa DiMauro

CEO, Leader Networks

617-484-0778

[email protected]

http://blog.leadernetworks.com

http://www.leadernetworks.com

mailto:[email protected]

http://blog.leadernetworks.com/

http://www.leadernetworks.com/

The Future Of Social Retail

Business

Transcript of The Future Of Social Retail