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GUEST COMMENT: Strength in numbers

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“Does my backside look big in this?” is a common question between female friends when they’re out shopping and between male friends, the question could be, “does this shirt show my beer gut?” The answer often being the make or break point for purchases.

As we move deeper in to the age of online shopping, the same questions are now being asked around the world, virtually among friends, peers and even strangers, with consumers taking full advantage of the ability to communicate and share their thoughts on the web. This “crowd sourcing” of opinions is a by-product of social technologies and apps that now form a vital part of the consumers’ buying process.

In fact, data from Nielsen reveals that 90% of UK consumers trust recommendations from people they know, rather than from a brand. And whilst that figure isn’t surprising, the challenge for retailers is how to respond to changes in the shopping landscape, especially in this social era. It is a long time since it was enough for retailers to roll out and update a Facebook page and a Twitter feed and consider their social efforts to be “done”.

Whilst basic social media provides a good start for retailers, for today’s consumers, this doesn’t go far enough. Relying solely on Facebook or Twitter means missing out on interactions with consumers and brand advocates, as well as missing a powerful chance to get up close and personal with influencers. Done right, social is much more than an online billboard or advert. Social has the power to generate and sustain brand-consumer dialogue within a comprehensive social customer experience programme.

Retail wars

Amazon and ASOS are drastically altering the ecommerce landscape, implementing business models driven primarily around the needs of the customer. This is putting pressure on all retailers—online and offline alike – to build more engaging customer experiences and find new ways to foster and reward loyalty, which are becoming vital tools in the retail battlefield.

For many traditional retailers, price has become the most powerful consumer differentiator and motivator. Many are engaged in price wars, competing for consumers in saturated and highly competitive markets. Just last month, supermarket giant Morrisons declared an investment of £1 billion to allow it to cut the price of its groceries in a bid to compete with lower priced rivals. Tesco also recently replaced its CEO of three years, Philip Clarke, after he failed to halt a dramatic slide in profits and sales.

Does this signal the end of the supermarket giants or rather a change in consumer buying behaviour? Does this suggest that price is the top (or only) concern for consumers? When it comes to price, as an example, supermarkets are not alone. Retailers nationwide—selling almost everything—have been impacted in the wake of families tightening purse strings, with price comparison sites making bargain hunting into a modern-day sport for armchair shoppers. Competing on price alone is not a race many can win. Savvy retailers have both an opportunity and an obligation to implement consumer-centric omnichannel tactics, or risk the same fate of (past) high street staples such as HMV or Woolworths.

Losing loyalty

Some retailers have tried price adjustments, whilst others have relied for years on loyalty schemes. These were originally introduced to encourage repeat business with the customer gaining currency in points and the retailer gaining first-hand knowledge of their buying habits. Today, loyalty cards are now a mass owned commodity, with little or no unique consumer value. Cardholders simply go through the motions when they scan their points card, only to do the same at the next store and so on.

Loyalty today, for savvy consumers, is less about points and more about active participation in a brand’s future, product offering, and “attitude”. Some consumers and retailers cling to loyalty card points and programs and in some cases there is no doubt these tactics do drive revenue, but with the glut of schemes now available, the sense of “belonging” that a consumer had to a specific brand is likely to have been diluted.

The power of communities

There are however some new approaches to loyalty and differentiation, with online communities proving especially powerful for those retailers who want to stand out from the crowd. The global beauty and cosmetics retailer Sephora and the American electronics retailer BestBuy have both implemented communities, achieving great results which have improved loyalty, brand uplift, repeat business and increased revenue from community members.

Today’s time poor consumers value seamless access to information and expect retailers to provide an integrated shopping experience across all channels—not just at the point of sale, but at the point of interest – be that in store, online, or on a mobile device on the train home. Consumers also value content from trusted sources, such as others who share an experience or interest. Communities can form the heart of such social interaction.

Retailers today can combine social communication with customer service to create a thriving and engaging social customer experience strategy, delivering increased revenue, lower service costs, faster service response times, improved customer loyalty, increased web traffic and better search results, supported by enthusiastic new brand advocates.

Retailers can create communities on their own terms—and around a shared interest or experience, cutting across global boundaries, social divides and traditional demographics. Those retailers should absolutely use Facebook and Twitter for some parts of their social marketing mix, but should also add communities as a kind of “private social” or “backyard social” experience—one they can shape and cultivate with their unique business needs in mind.

French retailer Leroy Merlin has found this to be the case for their needs and has successfully created a community within their online store. Consumers can ask other users questions regarding a particular product and thousands of conversations happen simultaneously. The community is not limited to consumers but also includes enthusiasts and prospects, encouraging consumer loyalty and repeat business.

Measuring success

Success can be measured in many ways, but fundamental to any metric must be the consumer’s requirements. 76% of marketers believe they know what their consumers want in terms of social content and interaction, yet only 34% have actually asked this question (e-Strategy Trends). Communities offer the chance for real dialogue and business learning, helping retailers gain priceless feedback on what consumers’ want, at the same time promoting various goods and services.

Communities are an essential part of building a retailer’s online presence, and should also be linked to a wider omnichannel experience, reflecting the same level of contact and attention in a physical store. This can be promoted through interactive content, exclusive promotions and personalised recommendations – moving away from a mass marketing, ‘one size fits all’ strategy.

Today’s savvy and vocal consumer has extreme expectations when it comes to social shopping and those retailers who don’t adapt are likely to find themselves falling by the wayside and out of business.

In the future, the question, “Does my backside look big in this?” might never come up, because an army of same-sized shoppers whose desire for a perfectly proportioned posterior matching your own, has already recommended that pair of jeans you are about to try on in a online community dedicated to denim.

Katy Keim is chief marketing officer, Lithium

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