Engage customers and gain advocates through social media and social networking

Technology is changing the way consumers interact, obtain information, and purchase goods and services. Did you know that more than 25% of the world’s population, 1.73 billion people, are online and the number of people is estimated to reach 2.2 billion by 2013? Americans alone have access to:

• 19.98 billion Web pages¹
• 65,000 iPhone apps²
• 10,500 radio stations
• 5,500 magazines
• 200+ cable networks

It’s no wonder we know so much! There are 9 times more mobile phone accounts than cars in the emerging world.³ Approximately 63% of adults research through social networks and blogs, and, 47% of the time, they are influenced by what is read. The consumer voice has never been stronger.

The age of the socially connected consumer is here. A recent consumer survey ranked consumer content as the #1 aid to a buying decision, cited by 91% of respondents (JC Williams Group, 2006). Think about the fact that 78% of consumers trust other consumers for information, versus 13% for mobile text ads and 63% for newspaper ads.⁴

These facts provide evidence that the world as we knew it has changed in dramatic ways. Retailers need to take notice and change to meet the demands of the smarter consumer.

Let’s start with some basic definitions. According to Wikipedia, social media is online content created by people using highly accessible and scalable publishing technologies. Social networking focuses on building online communities of people who share interests and activities, or who are interested in exploring the interests and activities of others. Social media and social networking are an integral part of our culture. Retailers need to think carefully about both of these as they develop their strategy. They need to decide what social media to create and how to enable and participate effectively in social networking with customers.

How do users participate in social communities? The 90-9-1 Principle (link resides outside of ibm.com) states that:

• 1% of users are Creators who are actively creating content,
• 9% are Editors who are commenting and adding to content that already exists, and
• 90% are Audience or Lurkers. They are watching and consuming content.

The take-away from this is by fostering a conversation with 10% of the audience, you are building value for the remaining 90%.

More than four in five US online adults participate in social networking according to the Forrester Research North American Technographics Interactive Marketing Online Survey, Q2 2009. They categorize users as Creators, Critics, Collectors, Joiners, Spectators and Inactives. The survey states that from 2007 to 2009, the percentage of Creators and Collectors grew slowly, while the Joiner and Spectator categories grew significantly. The percentage of Inactives has diminished from 44% in 2007 to 18% in 2009. The trend couldn’t be more evident. Social networking is a growing phenomenon.

Retailers can leverage this opportunity through what is termed social commerce. Social commerce is really about making a brand participatory. It is about engaging customers and getting them involved. It gives them a reason to come back and spend time with a brand. It can bring ‘chatter’ to a retailer’s online site instead of having it happen elsewhere on the Web where the retailer is less likely to participate. Social commerce enables a retailer to provide all the information necessary to research, compare, make a decision and complete the transaction with the retailer. It can help retailers increase cart conversion rate, capitalize on impulse buying and reduce return rates. It’s not about telling customers a story; it’s about enabling them to tell it.

A good online community will . . .

• “Allow me to have access to my information wherever I am”
• “Allow me to learn about what other people like me are doing”
• "Connect me to relevant content and communities that support my pursuits”
• “Allow me to share my ideas and feelings about issues or the products I own”
• “Help me with product support, questions and issues”
• “Allow me to request the types of products and service I want”

The goal is to create sites that promote active participation and community as part of an integrated shopping experience. Social interaction, community and consumer-driven content need to be incorporated in a way that allows shopping to be enhanced by it, and effectively adds value to the shopper. It’s about leveraging social networking tools in an effective way.

Here are some of the more important social networking tools that retailers can use:

• Blogs (a contraction of the term "Web log") are a type of Web site, usually maintained by an individual with regular entries of commentary, descriptions of events, or other material such as graphics or video. Retailers can generate blogs to provide additional product or category information. They can also post how-to information in the form of text, photos and/or videos. Customers can “blog” to provide feedback and experiences, or comments about experiences with a retailer.


• Micro-blogging is a form of blogging, however the entries are limited in size. For example, the highly popular Twitter allows a maximum of 140 characters per entry. Subscribers can receive “Tweets” from other subscribers whom they are following, and respond to them. Retailers can micro-blog to offer coupons, sales and promotions. They can “tweet” press releases, provide exclusive tips and tricks to customers, and ask for customer feedback, suggestions or ideas for improvements. Some retailers even use Twitter as a customer service mechanism.


• Co-Shopping is a form of social commerce, enabling two people to share a joint shopping session from different locations. These can be two customers virtually shopping together, or possibly a customer and sales associate, who is assisting the customer with their purchase decisions. This typically uses live instant messaging to enable communication.


• Widgets are tiny applications that can be embedded into a Web site, blog or social network. Widgets are relatively inexpensive to create and they are portable. They may be proprietary, which means they are only available on a specific Web site. Some uses for widgets include portable carts (e.g., zazzle.com) (link resides outside of ibm.com), brand engagement and customer selling (e.g., lemonade.com) (link resides outside of ibm.com). Widgets are sometimes viral and often short-lived.


• Social Bridging: Through open or proprietary APIs, retailers can enable shoppers to log into their e-commerce site without creating a new registration ID. This level of authentication provides enough credentials to participate in the social elements of the site. Additional authentication is required to complete a shopping transaction due to the sensitivity of the content included in a shopper’s account.
  
  Social bridging allows users to connect directly to and from their Facebook, or other social network accounts. It can be used to drive traffic and engage existing and new customers. It can access a user's identity, their social graph, and stream activities such as purchases and other social participation on the retailer’s site.


• Mobile Social Networking Applications allow users to access social networking directly from a smartphone (e.g., iPhone, Blackberry). All of the social networking tools described above can be used on the mobile device, and this method of interfacing is growing rapidly. A recent study from Ruder Finn (link resides outside of ibm.com) reported that more people are using the mobile Web to socialize (91%) compared to the 79% of desktop users who do the same.


• In-Store Kiosks and Flat Panels can be provided to enable customers to use social networking tools from within the store.

Innovate and co-create with customers across channels to drive loyalty

Social commerce is about making a retailer’s brand a destination. Retailers need to really listen to what their customers are saying. Customers can provide valuable input and feedback that can be used to make more informed assortment decisions, changes to Web site features and enhancements to the shopping experience. When customers feel that their voices are being heard, they feel a stronger connection to the retailer and are more likely to become advocates.

It is important for Retailers to identify and engage customers who are key influencers. Why?

• To establish some prioritization as to who is impacting the market conversation the most
• To develop strategies for engaging those influencers through social media capabilities
• To establish enduring and mutually productive relationships with the influencers
• To empower their advocacy of products or capabilities, which helps build and foster a sense of community among brand loyalists, and empowers those loyalists to better advocate on behalf of a brand, product and/or service.

Equally, if not more, important is the need to monitor the market conversation to understand what the marketplace is (or isn’t) saying about a retailer (their brand, products, services). Retailers need to understand the tone and impact of the conversation and begin to identity areas of opportunity for helping shape that conversation and gather valuable market intelligence.

Social media metrics include sentiment, activity, share-of-voice, and thematic content of online conversations. Trends and key influencers (“mavens”) and the most active sites/blogs are identified and tracked. By understanding the impact, retailers will have a way of identifying measurable progress, quantifying the return on social media investment, and enabling benchmarking against future efforts.

Companies can use analytics tools to better understand the reputation of their brand on the Web. One example is IBM Corporate Brand and Reputation Analysis (COBRA), an advanced analytics tool for searching, tagging, and indexing topics on the Web. COBRA addresses an important issue: what are your customers thinking? By applying advanced text analytic solutions to internal and external content, COBRA automatically filters thousands of document combinations, finding only relevant brand and reputation alerts. It allows users to apply discovery tools to analyze strategic implications of these alerts.

To survive in today’s changing retail environment, smart retailers are working to optimize their shopping experience. Social media and social commerce are integral to that experience. Integrated retail software platforms, like the IBM Retail Industry Framework and its components, provide the solutions, tools and assets to deliver that smarter shopping experience. Social Retailing, in the Retail Industry Framework, provides a platform and pre-integrated designs for social computing, such as communities, reviews and blogs, plus future integration with social networks – all of which enables the retailer to draw customers to its Web site and interact with other customers to facilitate "social shopping."

By Wendy Neuberger (Endicott, NY). Wendy is an IBM Distinguished Engineer and the Chief Architect responsible for Distribution Sector.

¹ http://www.worldwidewebsize.com/ (link resides outside of ibm.com)
² http://mashable.com/2009/08/05/flurry-iphone-apps/ (link resides outside of ibm.com)
³ http://communities-dominate.blogs.com/brands/2009/11/the-digital-divide-in-numbers.html (link resides outside of ibm.com)
⁴ http://www.balladinplaine.com/sla-2008-word-of-mouth-marketing-tuesday-june-17/ (link resides outside of ibm.com)