• The Retooling of Retailing: How social networks are changing the consumer/retailer relationship

    Posted on November 16th, 2011 by and currently 11 commenting.

    The loot.

    Here’s the thing: I don’t like malls. Call me germaphobic (or perhaps I’ve just seen one too many apocalyptic pandemic films for my own good), but being trapped indoors with a crowd breathing recycled air makes me feel like I’m a hop, skip and a viral cell away from the flu du jour. And while the hustle and bustle of holiday shoppers has a certain seasonal charm, watching overstressed, grown adults have public meltdowns and temper tantrums at the register generally puts a ding in my Christmas spirit. Thus I avoid the mall at all costs. Not just during the holidays, but every day.

    Last weekend, however, compelled by early onset Christmas spirit and a Klout perk Macy’s gift card, I found myself circling the lot with the rest of the parking lot sharks. Before I headed in, I checked-in on Four Square, only to discover that Macy’s was also offering a “special” (i.e. additional discounts) to anyone checked-in. With very little effort, I had earned myself significant savings – and Macy’s planted a little love seed in my heart. As I stood in line waiting to checkout, I began thinking about how technology and social connectivity are not only influencing, but changing, the retail landscape.

    I stumbled across this timely article on Monday. The author suggests that “Connectivity has shifted the balance of power to individual shoppers. The traditional ways that retailers and merchants reach out to users and how they expect them to discover, shop and pay are getting disrupted by mobile and social. And that’s forcing companies to react.”

    The article goes on to explain that almost half of all shoppers are coming to stores armed with smartphones, altering the ways we relate to and interact with retailers. Not only does the technology in our pockets give us instant access to product ratings and reviews, it gives us the ability to shop for a better deal with the click of a button – and decide whether that better deal is worth driving across town for.

    The ways in which consumers are learning about products and services are shifting as well. In contrast to the days when people made decisions perusing store shelves and aisles, today we’re arming ourselves with information – and so much more – by turning to our social networks. Jack Dorsey, co-founder of Twitter and Square says consumers are learning about products through social connections on Twitter, by following their passions and interests.

    When I reflect on several of my own recent purchases, it rings true. After my iPhone shattered, I went on the hunt for an indestructible case by throwing a question out to my Twitter followers. The name “Otterbox” was quickly Tweeted back by many. When I decided to invest in iPhone insurance, my social network (and their glowing recommendations) directed me to a company called SquareTrade. In these instances, my social network wasn’t just influential in my purchase, it was integral.

    So what does the future of consumer/retailer relationships look like? John Donohoe, CEO of eBay, says he expects more changes in the next three years in commerce than in the last 15.

    As to be expected, Word of Mouth will continue to be an increasingly influential force when it comes to decision-making about which companies to support, which products to buy and where and how customers will spend their dollars.

    The fact is that with mobile and social, consumers are much more savvy. They are equipped with the latest information and the latest prices whenever and wherever they go shopping. And with social channels, they are swayed by and discover products through their friends, not through ads.

    How have you noticed retailers and service providers adapting to the increasing influence of social networks and Word of Mouth?

  • http://twitter.com/BryanWeller Bryan Weller

    It is kinda crazy how much of a difference social media is making on the way we research and purchase our items which is precisely why it is such a powerful tool for businesses. Combined with smartphones and their myriad of apps, social media has made shopping a completely different experience than it was just five years ago. 

  • http://twitter.com/DooneyPug Lori Finnigan

    Social media is “word of mouth” gone wild, but in a good way. I work in the retail industry so it’s a challenge regarding where to put marketing dollars and resources.  Small businesses like ours do not have deep pockets like a Macy’s – it’s sometimes scary when planning out future ad/marketing campaigns.  Which one will work for us the best?

    Thanks for an interesting post.

  • http://twitter.com/VineBuzz Rich Reader

    Macy’s is much in the advant garde among its
    peers; been listening and evolving for a long time. Other retailers will
    change or die as they continue to lose share.

  • http://twitter.com/NoMeatballs Amy

    Lori,

    I love that social media has allowed me to connect with the REAL people behind small, local business – in some instances, this has happened before I ever walked through their door. I think one of the best investments a small business can make is to step into the existing conversations and get familiar with their passion people – the people talking about them (good or bad). It’s an opportunity to stop talking AT people (=advertising) and start talking WITH them, and listening TO them (=relationship building.) 

    Thanks for the thoughtful comment. Have a great weekend!

    Amy

  • http://twitter.com/NoMeatballs Amy

    Rich,

    I can’t wait to see what this evolution (as predicted by John Donahue) will look like – and how it will enhance the shopping experience. My hypothesis is that we’re going to see a continuation of “social scaling down” of big companies (like Macy’s) to create more opportunities for 1-on-1 bonds with customers, which will hopefully endear the brands to our little consumer hearts. 

    Thanks for the comment! 

  • http://twitter.com/NoMeatballs Amy

    Bryan,

    It’s remarkable how rapidly things have changed and evolved over the past decade. I can’t imagine a time before I could “Yelp” a product (or service provider) before heading out to make a purchase. Such a foreign concept this day in age! 

  • http://twitter.com/JGoldsborough JGoldsborough

    Solid stuff, Amy. Your story about Macy’s is a good case study. Here is my question though. Do you think we’ll see too many retailers only engage with customers via 4square, Twitter, etc. through discounts? And aren’t discounts totally just a short-term play? Each time you go to the mall (I hate malls too, btw), you check in and you go where the discount is.

    I understand playing the coupons and deals game in retail. Research says you have to. I just hope the Macy’s and other stories of the world don’t forget to play the true WOM (offline and online) game as well. And invest the necessary resources to do so.

  • http://twitter.com/NoMeatballs Amy

    That’s a very interesting question. And I think time will tell. The only reason I ended up at Macy’s in the first place was the klout gift card. The majority of retail shopping I do isn’t influenced my discounts NEARLY as much as it is by the relationships I have with a brand (which deeply influence my sentiment about their product/service.) As I said the comment below, I tend to be drawn to local merchants I can establish a relationship with – and feel like I know. For me THAT bond makes me want to invest in their success by spending in their store. And from that perspective, as consumers shift to a “deep relationship” model over a “big reputation” model, larger retailers are going to have a long road ahead to come out of their ivory towers to create a “small merchant” feel in a corporate retailer world. 

  • Pingback: The Friday Blog Round-Up 11/18/11 » EnMart Embroidery Talk

  • http://www.newwebtemplates.net Robert Donald

    Sharing their decades of experience in retail and technology, It demonstrate how social media and mobility can
    substantially improve a retailer’s market share and brand position.
    Loaded with examples, Branded! provides comprehensive reviews of
    leading retailers who are successfully implementing social media and
    mobility.

  • Pingback: Are you Ready for the Zero Moment of Truth?