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GUEST COMMENT Beyond demographics: Social commerce as a means toward greater customer insights

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by Richard Anson

Retailers and marketers alike know that one of the most valuable things about shoppers using the online channel is the insight that can be gathered on customers.

Some larger retailers use schemes such as loyalty cards or points systems to incentivise customers to share this sort of data offline too. Often this is broken down into traditional demographics such as gender, income, region, age and marital status. The idea being that a 35-year-old woman is likely to like a similar thing to another 35-year-old woman, and all 18-year-old boys will like the same things. This allows marketers and brands to target their advertising, offers and even product development to a specific demographic of their consumers.

However, this is an outdated way of segmenting customers; and although it can be helpful, in many cases it’s too simplistic. For example, a photography enthusiast could be any age, gender or come from any part of the country. It is likely that other keen photographers will like similar qualities in a camera, and this will be more important to other consumers looking for cameras than information from ‘similar’ consumers according to the traditional demographic data. Although traditional demographics will always have a place, retailers now don’t need to rely solely on this data for their marketing, advertising and product development. Brands and retailers should put less emphasis on what the person looks like, how old they are, or where they live; the most important piece of information is why they have made the purchase and how they use the product. The ability of these consumers to provide useful feedback to both fellow consumers and to the brand is invaluable.

The best and most reliable way to gather meaningful amounts of this data quickly and easily is to collect customer reviews from online shoppers. Brands can then start segmenting data according to more qualitative insights, allowing them to go beyond the traditional demographics for a heightened glimpse into what people are really saying.

What is social commerce?

The assumption that social commerce is shopping on social networks, such as Facebook or Pinterest, is a very common misunderstanding. These social networks have certainly provided a new channel for brands and retailers to reach consumers, but are only part of the many channels for social content. After all, shopping has always been social. Since the first transactions in the earliest marketplaces, people bought from people and discussed their decisions. To bring this vital social aspect into online shopping, retailers must move from passive commerce (sitting back and hoping people engage with you) to active commerce (collecting reviews and enabling dialogue), which goes well beyond social networks. Active social commerce means getting out there to generate the content and conversations that increase engagement online.

Customer reviews are one of the best and easiest examples of social commerce, as perspective buyers find it both engaging and useful. Reviews provide a way to a 360 degree view of the customer and, used effectively, enable micro-segmentation, which means that the brand can communicate – and sell – to the customer in a truly personalised way based on data from their social commerce footprint.

How does this work in practice?

The term social commerce goes hand in hand with other key words such as ‘semantic’ and ‘sentiment’ – because ‘social’ is real customers, sharing what they think and feel about a brand, product or service. Social and sentiment can be hard to measure, but in fact, the more qualitative data gathered from social commerce can be quantified in the digital world. It provides results that go beyond increased conversion rates on the website. This becomes apparent when social content is integrated with a CRM system, used to enhance communications or even combined with other data from external sources such as sentiment analysis, enabling companies to get to know their customers as individuals, not just as a set of demographics.

At a macro level, brands can use reviews gathered online for anything from customer service to product research and development. For example, should there be a problem with a product or service, companies can leverage feedback gained through social commerce to respond to their clients and address the issue quickly – something that would be impossible by only relying on market survey data.

For marketers, the opportunities are also numerous. Reviews can be used to tailor product USPs; for example, if a laptop company had put a lot of resources into marketing activity focused on the quality of the screen, but then found out that the users of the laptop really valued the fact that it was lightweight, marketing activity can be adjusted accordingly. An even more extreme example would be if a product is being used in a way other than it’s intended. Then research and development teams as well as marketing can respond appropriately, leveraging alternative opportunities and eventually pitching it to new audiences.

Social as a barometer for brands

In providing brands and marketers with insight, social commerce helps the business to profile and truly understand their customers, as well as enabling the company to identify advocates or detractors. It provides companies and brands with the real language of real people. It reveals attitudes toward a brand in general, specific problems (either positive or negative), and contrary to popular belief can be quantified meaningfully. Social activity can be seen as a barometer for brands and those that don’t utilise this resource may fall behind more savvy competitors.

Richard Anson is founder of social commerce provider Reevoo.

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