Why are retailers struggling to get social media right?

Discussion
Sep 06, 2016
Tom Ryan

According to a new report from Boston Retail Partners (BRP), 81 percent of retailers using social media to engage with customers indicate that their processes need improvement.

The report explored five key areas where retailers can use social media to improve the customer journey:

  • Experience: Sixty-nine percent of retailers see opportunities to make use of social media to enhance the customer experience. While social media can influence shoppers’ purchase decisions and personalize their shopping experiences, retailers remain uncertain how to best use it, according to BRP’s recent surveys;
  • Interaction: Seventy-five percent support customer interaction via social media, but 81 percent of those retailers feel that the current interaction needs improvement. Outside of the direct in-store experience, social media is becoming the preferred customer communication forum, and expectations are high. Customers want responses to questions, feedback and complaints quickly or they feel slighted.
  • Endorsement: Fifty-nine percent of retailers plan to utilize brand advocacy/social media endorsement as a source for identifying their most valuable customers within three years. While social media has made it easier to identify brand advocates, retailers are uncertain how to measure brand advocacy and then use that information to boost revenue;
  • Satisfaction: Fifty-nine percent of retailers use social media comments as a means of measuring customer satisfaction, yet 45 percent of those claim it needs improvement. Beyond ensuring that brand advocates are happy, understanding satisfaction levels can help retailers refine their message and quickly address any potential dissatisfaction.
  • Insights: Sixty percent of retailers capture customer feedback and insights from social media and online comments. However, few “tried and true” tools are available for retailers to use as a guide for social media analytics. According to BRP’s 2015 Merchandise Planning Benchmark Survey, only 23 percent of retailers currently use social media data product development; 29 percent plan to use it within two years. Only 31 percent have any plans for utilizing social media data in assisting with allocation.

 

DISCUSSION QUESTIONS: Why has the learning curve around social media been so steep for retailers? Of the areas social media touches as part of the customer’s journey, which should be the primary focus for retailers at this point?

Please practice The RetailWire Golden Rule when submitting your comments.
Braintrust
"Retail and brand management need to embrace the chaos of social media and go with its flow, rather than trying to control its direction."
"First off, it’s not just retailers that have had trouble with social media. Telecommunications, travel, hospitality, manufacturing, financial..."
"My take on it is that it’s hard to teach an old dog new tricks. And OLD is the operative word here."

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13 Comments on "Why are retailers struggling to get social media right?"


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Kim Garretson
Guest
3 years 2 months ago

One area where retailers fail constantly with social media: Answering inquiries about when out-of-stock products will be available again, or even if they are coming back. Also, when products will go on sale. Last holiday I monitored the social accounts of most of the 10 largest retailers, and almost every one had the same answer to questions about OOS products: “Sorry, we don’t know. Keep checking back.” Yet the research we did at MyAlerts with the e-Tailing Group found that 96 percent of shoppers encountering OOS immediately went to a competitor’s site or searched for the product elsewhere.

One retailer that is doing social correctly is Cost Plus World Market. They embed Facebook comments on their products right on the individual product pages. When a shopper asks a question via social about when an item will go on sale or come back in stock, customer care answers by pointing out the form on the page for signing up for alerts, and promises the shoppers they will be the first to know when the data is available.

Lyle Bunn (Ph.D. Hon)
Guest
“If our customers are having a conversation about us we want to be part of it,” said a CPG executive. Being part of it means understanding what is being said and contributing to the discussion. Fewer than 10 percent of comments are typically at the two ends of the sentiment curve — either strongly supporting or “speaking out” against the brand. Managing brand equity means actively amplifying and rewarding brand advocates while neutralizing the negatives, and exploiting (to use a direct term) everything in between. All three areas of brand need are resource-intensive where ROI is often more suitably framed as ROO (return on objectives). Sentiment analysis, knowledge gaps and trends can inform brand management plans. But like my friend said of his sailboat, “It’s a hole in the water where I throw money!” The savvy marketer is cautious of the social media tail wagging the brand identity dog, recognizing that a loyal or prospective customer base may give two hoots about, or even be unaware of, social media commentary. The core point must be… Read more »
Max Goldberg
Guest

The social media learning curve has been steep because retail management is out of touch with the technology. Management reaches for data when little is available. Management expects social media to sell, rather than to engage. For all of these reasons, management underfunds social media. Consumers, particularly Millennials, view social media as a primary means of communication. They expect quick responses that solve issues. Retail and brand management need to embrace the chaos of social media and go with its flow, rather than trying to control its direction.

Matt Schmitt
Guest

Much of the focus on retailers’ social media tactics has been revolving around the areas of commerce and customer service. Retailers are trying to figure out how best to use social media as a sales channel while also working to leverage it as a customer service channel where a more fluid, transparent conversation can be fostered. While these areas are worthy of consideration and analysis, there is still a big strategic tentpole in social media planning to not lose sight of – branding. One of the biggest benefits of social media is users telling their stories. Retail marketers can benefit by amplifying and nurturing the content generated by social media users. This may seem too soft for tracking quick win metrics and results. But the brand benefits by sharing and showcasing the content generated in the social sphere. I hope to see more retailers showcasing social content across their marketing channels.

Ron Margulis
BrainTrust

First off, it’s not just retailers that have had trouble with social media. Telecommunications, travel, hospitality, manufacturing, financial services and other sectors have all had challenges with social media, and many have far worse track records than retail.

The keys to a great social media program are audience and content. Retailers need the right content for the right audience and that means pulling data from consumers. They can’t rely on Millennial marketers sitting in New York or Chicago when their shoppers are in the suburbs of Cleveland. This disconnect of marketers and the people they are supposed to be marketing to is one of the principal reasons why the retail social campaigns are not working. It’s also a more pervasive problem the industry needs to deal with — many marketers just don’t get shoppers’ needs and wants. They’re too caught up in thinking they can create demand for anything anywhere, and they’re overestimating their capabilities.

Tom Redd
Guest

Blame it on the management. The whole issue is easy — the typical late start in the social game cost the core retailers as new players got into the market and started with social as their core marketing toolset.

It took some larger retailers too long to learn that just marketing and data are not the same as true social.

Large shops are also still learning and also trying to re-tune their images in the social space — and that does not mean just getting a Facebook site and doing more on Twitter. Social is a strategic tool and Voice measurement tools in social are critical.

As usual, it took too long for retailers to get the management focused on the power of a select technology — thus the catch up game is ongoing.

No need to over analyze here

TRedd

Tony Orlando
BrainTrust
Social media is something our store has been doing strongly for more than three years and before that we did email blasts for more than a decade. It requires time, labor and knowhow. I have seen some really good stuff from retailers and others that are downright horrible. Keeping it fresh and pulling out older content is a good start. Some stores’ Facebook pages have their last entry from 2014. I have a few folks whose job it is to keep things going, and we try to make new catering or meat videos that also get posted on our YouTube channel. One huge thing for us, as mentioned above, is how quickly we respond to our customers questions and concerns. Our response rate is very good, as it is important to answer questions within a few hours or less. There are some pretty sophisticated websites out there that require a staff of employees to make them run smoothly, but no matter the size keep it focused and fresh with great photos, and above all engage… Read more »
Shep Hyken
BrainTrust

Larger businesses in general, not just retailers, struggle with social media. My take on it is that it’s hard to teach an old dog new tricks. And OLD is the operative word here. Brands that have been around a long time have difficulty keeping up with this new way of marketing and gathering data. Social media is a moving target. It’s still in its growth phase, and while you have some standards (Facebook, Instagram, etc.), the new players and changing programs are hard to keep up with. It takes a lot of energy and knowledge to stay up with the latest and greatest. More importantly, it takes the ability to change and adapt quickly. And QUICKLY is the operative word. (Somehow “old” and “quickly” contradict each other in this discussion.)

In addition to social media giving the retailer the ability to communicate through non-traditional channels, the ability to mine data is huge. Companies are starting to take advantage of this now and the dividends are big.

Patricia Vekich Waldron
Staff
Patricia Vekich Waldron
Contributing Editor, RetailWire; Founder and CEO, Vision First
3 years 2 months ago

It’s another example of retailers being laggards in adopting new technologies, as Tom Redd states. Social is another way to engage with consumers: service, content and conversation. Retailers aren’t even in the fast-follower category any longer — wondering when they will adopt a culture of experimenting and learning as they go.

Ralph Jacobson
BrainTrust

Social marketing continues to be a struggle for both retailers and CPG brands. A global CIO at a very prominent CPG company told me, “Although we have a huge presence in social channels, we literally have no social strategy.” I personally believe that marketers don’t fully leverage the tools that are available to take the mystery out of social. It is hard to say if and when specific social channels will emerge as the de facto choice(s) for consumers, at least for more than five years straight. Too much churn is still happening out there. Until that happens, marketers need to make an impact in the channels that matter (today) and use technologies that can accurately determine where to invest.

Ed Rosenbaum
BrainTrust

Could the retail industry think social media is selling? If so, that is the problem. Maybe social media for retailers should rely more on being responsive to customer needs and comments. I am far from an expert in this; but being able to communicate with the customer seems more important than trying to sell them something.

Ken Morris
BrainTrust
Ken Morris
Retail industry thought leader
3 years 2 months ago

One of the greatest challenges for retailers is that social media is still relatively new and is still evolving. Retailers still have uncertainty as to how to best leverage and integrate social media into the customer shopping experience. The social media vehicles available to consumers to interact with brands and influence shopping behavior have never been more varied, and continue to be very dynamic. This makes it difficult for retailers to identify, create and maintain a strong social presence that integrates well with the entire brand experience.

Most retailers are jumping-in to social media and trying to learn quickly. As retailers refine their social media interactions, they can utilize this information to continually improve the customer experience.

The primary area of focus for social media is not the same for all retailers. The answer depends on the social media habits of their customer base and how they use the various platforms. Retailers don’t need to be everywhere on social media — just where their customers are!

Brian Numainville
BrainTrust

Looks like lots of folks taking the poll feel that interaction is where retailers need to spend their time. I couldn’t agree more. Recently I had a less than positive experience with a franchisee of a food chain. I took to social media and was initially impressed with the relative speed of response and promise to contact me. However, after getting my information and promising a response in 48 hours, guess what … nothing happened. Retailers have to get the basics of customer interaction right first before anything more complex!

wpDiscuz
Braintrust
"Retail and brand management need to embrace the chaos of social media and go with its flow, rather than trying to control its direction."
"First off, it’s not just retailers that have had trouble with social media. Telecommunications, travel, hospitality, manufacturing, financial..."
"My take on it is that it’s hard to teach an old dog new tricks. And OLD is the operative word here."

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