FreshNetworks Blog

Guest blog post written by Andrew Rayner, founder of internet marketing agency e-mphasis.

The phrase “Multi-channel” has been a buzz word for some time now in the retail sector and this has led to 3 main changes in the market:

1. With e-commerce capabilities accessible to even the tiniest of single-store independent retailers, the ability to shop across different channels has become almost universal.
2. The consumer has became more confident shopping across channels (e.g. researching online and then purchasing in store,  or reserving online and then collecting in store) and is becoming increasingly demanding about their online  shopping experience.
3. The use of social media means that consumers are no longer relying on the brand’s own marketing messages to make key purchasing decisions – they are looking to “people like them” (ie, other customers) to help make decisions.

Typically retailers have been working on a multi-channel strategy that ensures customers who already shop with them get the expected brand experience at every touch point. There has been little regard for those who have not yet committed to any one specific retailer or store. So what is the best way to capture these prospective customers?

The answer is to apply  multi-channel retail thinking to search and social media marketing. This means providing access to all channels from the moment when consumers start searching for products and services online, enabling the retailer to present a comprehensive search result to consumers that satisfies their exact requirements.

And with the consumer leading the purchasing decisions of their peers and influencing purchases through social media channels like Twitter, Facebook and product ratings and reviews, retailers need to ensure they also tap into the social media as part of their multichannel strategy.

One approach to this could be to use Google Places Optimisation (GPO). GPO works for retailers because it returns results for location based searches. In excess of 43% of all Google searches return a local result and so the opportunity for businesses with multiple locations is phenomenal.

GPO also provides a great opportunity for multi-channel retailers as it can link to a retailers transactional website, and if that website allows it, the complete customer journey, from search to basket, can be tracked. It can also provide all other relevant information to the customer, including contact details, opening hours and even information like parking facilities or food outlets. Google Places will also contain that all-important consumer review and feedback information – a vital feature of the consumer decision making process in the age of social shopping.

Effective GPO will not only save SEO and PPC costs, but will also deliver more relevant impressions and enable retailers to leverage social media more effectively. And as most consumers searching the web for a product or service are often not brand loyal (yet), they do not have a destination store in mind. But by using GPO as part of your multichannel search strategy you will put all routes to market in front of shoppers who are actively looking to buy.

“Have you checked us out on Facebook?” As I queued to pay at Abercrombie & Fitch in London over the weekend I kept hearing this phrase over and over again. In fact as everybody paid for their purchases the sales assistants asked them this very same question. Some may have found this annoying, some may have found it forced, and some may have found it distracting. But it is actually a sign that Abercrombie & Fitch is taking its social media strategy seriously. And a great example of just how to embed social media across your customer touchpoints and with all your staff.

Developing a social media strategy and how you will use the various channels and tools at your disposal to engage your customers is only the first step. Now you need to actually engage people. And to do that people need to know where you are.

There are many ways that you can grow your social media channels. And it is often best to start small with a process of thorough seeding. Identify a small group of people in your target audience that you can work with – they may be brand loyalists, people you interact with already or those you know would be keen to work with you. You can then work with these people to start to build content and engagement in social media. You can create a starting point from which you can grow. But once you have begun to seed the site, and you are ready to open it up to your whole customer base you will want ways to increase the number of people you are engaging and how regularly you engage them. The question then comes: how do we engage more people in social media?

There are many ways to do this. Initial seeding with brand loyalists will help to spread the word about what you are doing. Outreach marketing in other social networks – such as Twitter – and engaging with bloggers and relevant forums will help you reach new audiences. And you also have the options of advertising, running competitions and other more traditional ways of promoting what you are doing. Of course, your aim may not be to reach large numbers through social media. But if it is, the best way to do it is simpler that any of these: use every existing customer touchpoint.

We’ve written before about how social media does not just take place online, and the best way of growing and embedding social media is to fit it in to your existing processes and customer touchpoints. Rather than social media begin something that is separate to the other ways you engage and interact with customers, it should complement and add to it. You should examine every customer touchpoint and talk about social media where relevant and where possible. If you mail out envelopes to customers, you should put your social media channels on the back. If you include telephone and other contact details in marketing material, you should put your social media channels there too. And if your staff actually meet or speak to your customers you should talk about social media with them.

Abercrombie & Fitch get it right. There are a few moments at the till when the assistant is usually quiet – the customer is finding their money or waiting for their bank to authorise their credit card. It uses these moments to talk about their social media activity – and in particular a campaign they are currently running on Facebook. And with 1.5 million people liking them on Facebook, they are clearly doing something right.

So if you want to grow and engage more customers in social media the best way is to embed it into your existing processes. You currently have many customer touchpoints so make the most of them. And let social media complement what you already do rather than sitting on its own.

We’ve written previously about the value of social shopping and how it can benefit online retailers,  and it seems that the issue of social commerce has risen to the forefront of e-commerce strategy discussions again.

Social commerce involves the use of social media, in the context of e-commerce, to assist with buying and selling products and services online. It includes features like customer ratings and reviews, user recommendations and referrals, social shopping tools and online communities.

While social commerce has existed for some time now, with brands like Dell claiming to have made $6.5m (£4.2m) from computer sales via Twitter since 2007, social commerce has become a major point of strategic discussion for online retailers again because of 2 reasons:

1. Facebook announced it will shut down the Facebook Gift Shop next month in order to prepare for the launch of its virtual currency,  Facebook Credits, possibly as early as September. Facebook Credits will initially allow users to pay for virtual goods such as games, but will eventually let them buy anything. It is expected that Facebook will take a 30% cut of all transactions.
2. FMCG giant Procter & Gamble (P&G) has started selling its Max Factor brand cosmetics through Facebook .

Michael Nutley, editor-in-chief of New Media Age, rightly points out in his Marketing Week article that these two approaches to social commerce take social media a step further by bringing the ability to purchase what’s being talked about on the social network within the network itself.

Etailers are more than aware of the fact that every page they ask customers to click through to results in a drop-off in numbers of people who convert, so the strategy employed by P&G is a clever one in that it brings the checkout to the potential customer, rather than the other way round.

It’s this ease of purchase, in combination with the persuasive buzz and consumer-driven product discussions that will have been generated on the social networking site, that’s likely to increase sales.

So is social commerce the future of e-commerce? Will etailers move more towards using Facebook or their own branded online communities as a direct space for selling products? It would be interesting to hear your thoughts.

Matt Rhodes at the FreshNetworks Breakfast Briefing

Another successful FreshNetworks breakfast briefing has just come to a close. This time the topic was ‘social media and retail’. The two speakers were Naomi Paget (Head of Direct Marketing at TM Lewin) and our own Matt Rhodes.

The breakfast briefing was split into three main parts. First, Naomi talked about how TM Lewin has been using social media as part of their e-commerce site and then Matt presented the results of a recent campaign we ran with Jimmy Choo. He also discussed how to take the first steps towards looking at social media from a business perspective.

First up was Naomi. She is one of our clients here at FreshNetworks and has been working with us since spring 2009.

TM Lewin: the Off the Cuff online community

TM Lewin have a very clear strategy of what they want to achieve from social media (some of these aims include things like “educate and excite customers about the brand and product, Get customer insight into our product, marketing and services and be seen as an authority on business dress”) and they now have a presence on various social media platforms including a Facebook page, YouTube channel, Twitter account and their own community ‘Off the Cuff’. The strategy is performing well against their objectives (see #FreshNetworks tweets for some of the highlights) but one thing was clear from Naomi. Internal passion is the key to success.

TM Lewin has made the most of their community because the employees utilising it have a passion to proactively engage with community members. Because of this enthusiasm, community members have direct contact with the senior management team at TM Lewin, making them feel more valued and increasing loyalty. TM Lewin is using this engagement to help spread positive messages through its current (and prospective) customer bases, gaining valuable insight and feedback on their activities.

TM Lewin has also noticed that people who enter the ecommerce site via the community are more likely to convert on their first site visit and so the community is directly attributing to sales (we can’t share the exact numbers but they are not insignificant!). It was great to hear Naomi’s talk because it highlighted the fact that social media isn’t always about the £ sign – sometimes this comes second to the other benefits that engaging with social media can offer a business.

Jimmy Choo: CatchAChoo

Next up was Matt Rhodes talking about Jimmy Choo , the CatchAChoo campaign and the importance of having a solid strategy for the foundations or all your engagement.
We have just finished running a campaign for Jimmy Choo where we organised a treasure hunt around London using Foursquare to help promote the launch of their new trainer range. There were a number of clear objectives behind this campaign (full case study coming soon) but the main reason we used this approach was because learnt from working with Jimmy Choo on a previous project that the actual purchasing of the shoes is part of the appeal, therefore using Foursquare seemed like a perfect opportunity to bridge the gap between online and offline engagement.

Four steps to building a social media strategy

CatchAChoo, followed a process that was the basis of the second part of Matt Rhodes presentation – a four step guide to building social media strategy:

1. Understand what people are saying – Before you start any social media strategy you need to know who is talking, where they are talking and what they are talking about. This is an important step as it allows you to identify the needs of the people you are engaging with and how you should go about approaching them.
2. Know what you are trying to achieve – Matt used an appropriate analogy to sum up this point:“if you were going to the moon you would have a solid reason for doing so! You would just invest all your time and resources doing it for no reason”. Social media it is not as grand as flying to the moon but it does follow similar logic. If you’re going to be invest time and resources, have a clear strategy of what you want to achieve and how you will measure this.
3. Experiment – Social media tools are changing all the time so using your initial insight from step 1, keep your aims in mind but try different things out. There are no right or wrong ways to use different tools; it all depends on your audience and your business so try different things out until you are meeting your aims.
4. Ruthlessly measure the impact you are having – This is the most important stage. All your interactions however they are being undertaken should meet the aims of your initial strategy. Regular reporting will allow you to have a diverse strategy and understand what is working well (and what isn’t) so you can change your tactics to make them more beneficial to the business.

It was a great event with some really good questions and thoughts coming from the people that attended. Thanks to everyone that came and we hope that you all took something away with you (besides a load of chocolate muffins) and if you have any thoughts on what was discussed it would be great to hear your comments!

Ever since sites like Kaboodle and Zebo spearheaded “social shopping” (a mix of e-commerce and traditional shopping where consumers shop in a social networking environment) consumers now have the ability to swap ideas, share product reviews and discuss latest fashion trends with like-minded people before, during and after their decision making and purchasing journey.

Social shopping has certainly helped to personalise the sometimes faceless online shopping experience.  And with 67% of shoppers spending more money online after recommendations from an online community of friends or like-minded people (according to Internet Retailer) a key element of social shopping seems to be the ability to recommend and share additional items that shoppers are likely to want to purchase.

A recent social shopping survey by e- tailer PowerReviews has also shown that a retailer’s own e-commerce sites play an important role in the purchasing process.  Survey respondents rated customer reviews as being the most persuasive factor in making a purchase and nearly half of all respondents said they would leave a retailer’s site if user-generated reviews were lacking.

Online shoe and clothing shop Zappos has certainly taken this knowledge to heart.  Largely known for their successful use of Twitter, thanks to the CEO lending his personality to the company brand, Zappos was also one of the early adopters of social shopping. Their site has a comprehensive ratings and reviews section to advise people on what products they might like based on their purchase selection, aiding the shopping process and helping with the conversion rate. They also have a “notify me of new styles” button, as well as plenty of  “favourite” ratings options so that customers can formulate a shopping list based on selections made by customers who have viewed the same or similar products.

More recently, apparel company Levi Strauss and Co has turned their hand to  social shopping . Their new Levi’s friends store uses the recently-launched  Facebook “like” plugin  to allow shoppers to see the number of Facebookers who ‘like’ an  item. It also allows the shopper to cast a vote about a product, encouraging joint participation in what was previously an individual shopping experience.

Social shopping can benefit retailers in several ways, especially if it is integrated with a wider online sales strategy.  With this in mind, we’re running a free breakfast seminar for retailers on how to use social shopping to increase online profits.

The event runs from 8.30am-10.30am on Wednesday 19th May and will include useful tips and advice on social shopping from the likes of  Geoff Quinn, CEO of TM Lewin, as well as real-life case studies from high-end brands like Jimmy Choo.

While the event is free to attend we ask that you register for the event below or call us on 0207 692 4376 to attend.

Please note: As places are limited the event is reserved for retailers only.

• Location: FreshNetworks, 229 High Holborn, WC1V 7DA,  London (map)
• Date and time: Wednesday 19th May 2010, 08:30-10:30

Online retailers are doing relatively well in the current economic climate. Whilst spending is down across the board, online retailers are doing either significantly less badly than their traditional competitors, or they are actually performing strongly. Both ASOS and Vente-Privee are seeing relatively strong performances in a weak retail market. There are many reasons for this – online-only business models have lower overheads and are potentially easier to scale (up or down) depending on demand). They also allow the retailers to stock smaller amounts of more products, allowing them to have a larger portfolio and to cater for a wider range of goods.

But these structural reasons only tell part of the story. The real reason why online retailers should be, and in many cases are, performing better than their traditional counterparts is because of what online lets you do. It’s not just taking an offline concept online, it’s about doing completely new things in completely new ways.

One of the real benefits of online retail is the ability to personalise the shopping experience and to recommend additional items that an individual shopper is likely to want. In the offline world, this is possible with a well-trained and experienced assistant who will identify what a shopper is likely to want and what suits them. They can then help to guide and recommend items that they think might appeal to them. Online we can use something a lot more powerful: people like me.

We know that people trust people like them, will make purchase decisions on what they say and recommend. It’s why online ratings and reviews are a significant influence on purchases. In online retail there are a number of ways in which you can use ‘people like us’ to recommend other products to shoppers.

1. Use aggregate data from the shopping experience and from previous baskets to predict what people might want to buy. You can then present related items and other popular items based on previous purchase patterns.
2. Use ratings and reviews from other shoppers to advise people on what products they might like and what people think about them.

Both of these can be quite successful when offered as standalone elements in the e-commerce system. But they take on a significantly more powerful role when integrated with an online community. Rather than just recommending products based on previous shopping habits, you can show people who have bought that product before, the other things they buy, the discussions they take part in, the things we know about them or that they are willing to tell us. And rather than a set of isolated reviews from other shoppers, we can show these reviews as just part of the content that somebody has added to the community, alongside the questions they may have asked or answered in the forums and photos of them in the galleries.

We know that people trust ‘people like me’, and that they are influenced heavily by people with whom they feel a connection, shared interest or other similarity. Online retail benefits most when it lets you see such people. You can find out not what people who may have bought one particular product have also bought, but, perhaps more importantly, what people who you feel an affinity with have bought. This doesn’t mean you will buy the product too, but it does increase your likelihood to do so. When you start to relate with people and identify with them you trust them and their choices more. You are influenced by them.

Online retail can do things that are just not possible offline. Whilst you might go to a store with a friend and get their advice, online you can tap into the thoughts, reviews and decisions of many thousands of people that you might identify as being people like you. Even if you don’t know them.

This is true social shopping. And online retailers can benefit from this in a way that is just not possible offline.

For the second in our series of Online Community Examples, we move on to look at online communities in the retail industry.

Online communities in the retail industry

In an economic downturn, we’re seeing a real shift in retail shopping  patterns. Here in the UK there are reports of people switching from their usual supermarket brand for what they believe to be a cheaper alternative (as shown by the current price war between competitors Tesco and Aldi). People are shopping around more and price is of even greater importance than it might have ever been in decision making. In this climate customer engagement is more important than ever, as is extending the customer experience by offering other services and support in addition to your core product. You need to keep your brand front-of-mind, so that when the customer next goes shopping they think of you first. This is where online communities can come in handy.

Wal-Mart’s Elevenmoms

Wal-Mart have a chaquered history with social media (the infamous Wal-Marting Across America campaign, for example), but they are doing some great things at the moment. One good example of building a small but powerful online community is Elevenmoms. The original concept was simple – get eleven moms to blog about their lives and in particular about their  money-saving tips. These blogs would be collected together in one space where others could read and comment on what was being discussed. Those eleven moms has now grown to 21 and includes a green-mom, among others.

This is another simple online community concept that really works. Communities don’t always have to be about engaging all your customers or providing discussions that they all want to join, sometimes getting a small number of people to blog and start a conversation is all you need. Others will read and gain benefit form what is being written, and with  time the number of people adding comments and interacting with the content will increase. You also have the benefit of not all content being from the brand itself – rather you are sponsoring and promoting user-generated content. Allowing your customers to speak for you. A difficult decision to make, but one that can offer real benefits to your brand.

Sainsbury’s Online Community

This is a relatively new online community from one of the major players in the UK supermarket market. It is yet to grow and mature and it will be interesting to see how it is managed in the future, but the initial signs are positive. The Sainsbury’s Online Community is a simple concept – a set of forums where people can share ideas and tips. This is really a user-generated version of the recipe and ideas cards you can get in store or download online. Rather than Sainsbury’s providing you with recipes and ideas, they are providing a means for their customers to share these things with each other. This should increase both time spent on site and the range of things people do once they are on the site. Sainsbury’s are also providing a new service to their customers, they are supporting them to make the most of the groceries they buy between shopping trips, thus keeping the brand front-of-mind.

Currently the community sits separately from the e-commerce part of the site. I think that this is a sensible idea, at least for now. People who are shopping on a grocery e-commerce site are typically going their with a set of specific items in mind that they want to buy. We would like them to buy all of these and checkout their basket, without any distraction to put them off doing so. Mixing in community content in this environment can be difficult – we want to enrich and enhance the experience (and so make people buy more or buy more expensive products) but we do not want to distract people from their core task. This will only really be possible once there is considerable content on the community and we can use it to tie together ideas and recipes (for example “you’re buying this item, how about these other items to make this recipe as recommended by…”). At the moment the concept is simple and needs to grow and develop, once it has done the opportunities are great.

MyStarbucksIdea

No overview of online communities in the retail industry would be complete without looking at MyStarbucksIdea. This site, launched in early 2008, has a simple community concept – you can submit an idea to Starbucks, comment on existing ideas or vote for them. As with many example of online communities, simple can be best. You need to establish how you want to engage your customers and, importantly, how they want to engage with you. Starbucks identified that they wanted to create a feeling that customers had input into and a say in the business; that anybody’s voice could be heard. This fits well with the open and friendly brand they have developed and so would reinforce their position in the market. It would also be a source of new ideas and innovation and allow them to co-create with their customers.

But what makes this community really work is also simple – Starbucks actually listen to and respond to the comments in the community. This closes the feedback loop, rewards those who take part in the community, encourages others to join, and reflects on them as a listening brand. It’s often easy to overlook the need to engage and respond to ideas in your online community. But taking part is the one thing you can do to maximise the benefits you will get from the community itself.

See all our Online Community Examples

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Some more reading

• Business media: trends for 2009 (businessmedia.co.uk)
• Now We’re All Poor People Who Shop at Wal-Mart (chrisabraham.com)