Why are so many brand categories woefully bad at word-of-mouth?
According to a new study from Engagement Labs, an estimated 19 percent of consumer sales are now driven by offline and online social conversations. But many retail categories are failing to capture much WOM (word-of-mouth) buzz.
The study, conducted in conjunction with Koen Pauwels, professor of marketing at Northeastern University and BI Oslo, determined that 10 percent of consumer sales are attributed to offline conversations (face-to-face) versus nine percent to online conversations (social media).
However, the study of 170 brands, as well as more detailed analytics on 21, found that certain categories benefited much more from WOM. Tech products were far in front with 29 percent of sales in that category driven by WOM, made up of 15 percent offline conversations and 14 percent online.
Overall, Engagement Labs said that despite the widespread adoption of social media platforms among consumers, many brands are failing to break through, particularly in consumer categories that include beauty, household products, food and beverages. While the study shows that these categories gain sales through social media conversation, their actual performance is well behind that of other categories such as media, entertainment, technology and telecom.
The study didn’t explore why the tech product category scored notably higher but past studies concluded that some brands are facing challenges posting relevant, shareable content online that gains traction among key influencers.
An analysis of the food category, for instance, found that food brands in general had high sentiment scores both online and offline. But many food brands are “Whisper Brands,” performing below average among the 500 brands Engagement Labs tracks, due to low online and offline volume.
Another study found WOM scores by beverage brands, including Coke, improving because they’ve been better at engaging “everyday influencers.”
Both big box retailers and teen retailers earlier this year were found to perform better in offline WOM than on social media, notably Costco and Old Navy. Engagement Labs concluded that discussions around low prices and deals seem to be strong drivers of positive face-to-face WOM.
- Engagement Labs’ Analytics Reveals That Today’s Conversations Predict Next Week’s Sales – Engagement Labs
- Brands Heed Social Media. They’re Advised Not to Forget Word of Mouth. – The New York Times
- Kellogg’s and Hershey’s keep consumers’ mouths full with offline and online conversations – Engagement Labs
- Costco enjoys positive consumer conversations in real life, but underperforms on social media – Engagement Labs
- Old Navy, H&M and Forever 21 Lead the Pack Heading into Back-to-School Season in a New Analysis of U.S. Teen Retailers – Engagement Labs
- Coca-Cola and Tropicana Quench Consumer Thirst while Pepsi Goes Flat – Engagement Labs
DISCUSSION QUESTIONS: Why do tech products rank particularly high among retail categories in driving both offline and online word of mouth? Are certain retail categories as well as retailers themselves inherently challenged generating online conversations?