The one who buys the most from you, the one who generates the most margins or the one who spends the most time in your stores?
Think the answer is “the ones who buy from you the most”? Well, think again…
According to Sudhir Holla, a consultant at Infosys, the answer to the above question has changed in the last couple of years, thanks to social media.
In his post on a Forbes, Holla claims that social media has altered the traditional controlled customer experience to one that is more similar to Multi-Level Marketing (or MLM).
Multi-Level Marketing is a marketing strategy in which the sales force is compensated not only for sales they personally generate, but also for the sales of others they recruit, creating a down line of distributors.
In social media terms, this means the consumer’s voice has the power to influence others, helping to generate sales further down the line. So even though a consumer may just be “just looking” or browsing for a service or product, the fact that social media enables that consumer to spread an opinion about these services or products could help to generate sales further down the line.
So how do you leverage this trend? Identify your key consumers based not on spend alone but also by those who exert the maximum positive influence among your sector, audience, market or region, or by those who are influential about convincing consumers to buy the products or services offered by you.
Today sees the US-based launch of Mashalot – a site that has been termed as the “the first online marketplace embedded in social media”.
Launched in beta today in Minneapolis St Paul, the plan is to launch Mashalot nationally in early March 2012 at the South by Southwest festival in Austin, Texas.
Fully integrated with Facebook, Mashalot helps businesses grow their fan base while allowing consumers to leverage their own social networks (Facebook in essence) to save money on products and services.
Aimed at businesses who want to cut their spend on advertising, or small businesses with limited advertising spend but a real need to drive word of mouth to build their customer base, Mashalot works by encouraging consumers (or “Mashers” as they are known) to use their social media influence to gain special pricing from participating Mashalot businesses. ”Mega-Mashers” are those who gain followers and can greatly influence pricing and promotions within the Mashalot marketplace.
A transaction in the marketplace is called a “Mash”. Mashes can be created by a business transaction that drives specific promotions, or with a consumer-driven price request from an individual or group of Mashers. Mashers may also request a competitive “Mash Your Price” from non-participating businesses; the business will then be contacted by Mashalot who will try to negotiate the transaction.
The Mashalot platform also allows businesses to advertise and each ad is available for five days. All promotions are pre-approved to meet Mashalot advertising guidelines. Businesses are charged no upfront fee to participate in Mashalot and revenue for the company is 100% commission-based.
Several Minneapolis-St Paul have already signed up to Mashalot, including restaurants, hotels and a local car dealership.
Having had a quick look around the site, it definitely still feels as though Mashalot is still in beta stage, as it’s quite sparse in terms of content and users. As a social commerce platform that claims to be fully integrated with Facebook’s social graph, while also using the group buying and influencers concept of other social media, it will be interesting to see if Mashalot can take off when rolled out nationally and then internationally.
‘Multichannel’ has become a ubiquitous term in retailing and there are sound business reasons for adopting an integrated multichannel strategy.
Not only does multichannel tie together the consumer’s off and online experience, but with real advantages like “click and collect”,(which allows the customer to check if a product is in stock, order it and receive it the same day before even leaving the house) multichannel can help bricks and mortar businesses improve how cost effective they are in terms of e-fulfilment, home delivery, returns etc.
So it comes as no suprise that Multichannel leader John Lewis has introduced wifi to their stores, making it easier for shoppers to price check and compare in-store.
And as social media is woven into the multichannel experience, the buying habits of ‘others like us’ is influencing consumer decision making. So it’s often the case that the savvy multichannel consumer is as knowledgeable as the store assistant, not just on comparable offers, but also the features, functionality and suitability of products on sale. US retailer Sears has combated this by equipping their staff with iPads to help their assistants meet the expectations of their product-aware customers.
Often held up as a pioneer of social commerce, Polyvore has been extremely successful in building a business based on creating an outfit or ‘look’ for others to purchase. This concept, until now, has been for e-businesses only but bricks and mortar retailers could use the concept to give a physical shopper access to choose from an expanded stock line, as well as helping the consumer match items they purchased in person to other items online.
Bricks and mortar shopping centre owner Westfield has actually taken this concept on board by developing a virtual mall. Westfield’s virtual mall gives online shoppers the experience of shopping in-store in an online environment. For instance, where you might buy several matching items from different retailers in a trip to a shopping centre or High Street, Westfield’s virtual mall allows you to look at and compare the goods of several retailers in an integrated, ecommerce shopping experience.
Retailers who ignore multichannel do so at their own peril as it is clearly a way to allow the traditional bricks and mortar retailer to bring their customers the best of both the on and offline worlds.
To celebrate the launch of their new AW11 Collection, Ted Baker recently ran a new social media campaign entitled ‘It’s Rutting Season’.
Customers were invited to visit the Ted Baker stores in Glasgow, Manchester and London on particular dates in order to have the chance to ‘strut their rutt’ in store. This involved having their photo taken in a magical woodland setting whilst wearing a nicely designed deer mask.
The photos were then uploaded to Ted Baker’s custom-made Facebook app where fans could share them with friends and vote for the “most adorable Doe and dominant Stag from each city’s herd”. The winner was rewarded with a £500 Ted Baker shopping spree.
Successful elements of “It’s Rutting Season” include:
Connecting online with the in-store experience
Ted Baker obviously put a lot of effort into making sure the “It’s Rutting Season” campaign delivered a fun, in-store experience. The setting, masks and Instagram filters gave customers an easy way to create some highly shareable, magical-looking images.
Creating a dedicated Facebook App
‘It’s Rutting Season’ had its own dedicated tab on the Ted Baker page on Facebook. This made the campaign easy to find, as well as giving Ted Baker a well-branded space in which to display the photos. Creating their own app also ensured that Ted Baker was operating within Facebook competition guidelines while still giving them the freedom to make the app look and feel on-brand.
Any good social media management team will tell you that in order to make a campaign successful you can’t just wait for online coverage to come to you. Ted Baker’s solution to this was to get key fashion bloggers involved by inviting them to be the official in-store photographers for the ‘Rutting Season’ event.
Ted Baker invited Les Garcon des Glasgow, Sara Luxe and Mademoiselle Robot to participate, which increased their chance of coverage in the fashion blogs. For the London event, Ted Baker invited Mike Kus (who took over Burberry’s Instagram account for London Fashion Week) to take some behind-the-scenes snaps to share with his 124,157 followers on Instagram – a smart move.
So what could have been improved?
Whilst the app was visually attractive and easy to use, it took a long time to load. Participants were invited to claim their photos and share them with their friends in order to generate votes, ensuring a certain amount buzz. However, once in the app, when fans ‘liked’ a photo, this was not shared back into the news feed or ticker on Facebook. This seems like a lost opportunity for reaching a larger audience on Facebook.
After a cursory search on Twitter and various blogs, it would appear that despite their outreach efforts, Ted Baker didn’t achieve an extensive amount of coverage online, so their social media management and outreach programme could probably have been developed further.
Despite these points, this was a fun campaign and it’s great to see brands engaging with online influencers in order to support their social media activity.
A recent report has revealed that social media adoption by the fashion industry has exploded over the last three years. The latest L2 Luxury Digital IQ Index report which was led by Scott Galloway, Professor of Marketing at NYU Stern, reveals that there is now widespread adoption of social media channels by fashion brands.
The 49 brands studied in the report were given a Digital IQ according to how they scored in four areas of digital; their websites, digital marketing, social media and mobile capacities. They were then ranked “genius”, “gifted”, “average”, “challenged” or “feeble”.
As you can see, there are some unsurprisingly big names in the top twenty. However, interestingly Kate Spade – ranked number 2 in the report – is a relative new-comer in the world of fashion.
As the report reveals, there is less correlation between Digital IQ class and the size of a brand’s offline business, suggesting that if you use digital and social media strategically, you could potentially have the same capacity for success as some of the main players in fashion.
So why has interest in digital increased?
Simple – because brands have discovered just how essential it is for their shareholder value. Have a listen to what Angela Ahrendts, CEO of Burberry (ranked with the highest Digital IQ) has to say:
“To any CEO who is sceptical at all: you have to be totally connected with everyone who touches your brand. You have to. You have to create a social enterprise today. If you don’t do that, I don’t know what your business model is in 5 years.” – Angela Ahrendts
More and more data is becoming available to support Angela Ahrendts’ statement. The Digital IQ report reveals that 67% of EU consumers and 50% of American consumers say that they research luxury items online before they buy them – which suggests that if you can influence that audience online, it can have a positive effect on your sales.
Which social platforms are luxury brands using?
Whilst many brands have established Facebook and Twitter accounts, it is interesting to note that a number of big names have been keen to adopt other platforms.
Only eight brands in the Index are on Tumblr, yet anecdotal evidence suggests that engagement rates surpass those on other social media platforms. Not only can it increase consumer awareness, but it is also a great way to establish and develop relationships with key fashion bloggers. Currently leading the way on Tumblr in terms of reblogs per post are Alexander McQueen with 520 and Oscar de la Renta with 313.
Instagram Instagram is perfect for an audience which is passionate about beautiful images. More than 20 percent of brands in the Index are use Instagram to filter and share photos from fashion events and editorial shoots. As with most other social networks, Burberry is currently leading the way in terms of numbers, with almost 85,000 followers.
Almost a quarter of the brands surveyed have an account on Polyvore (22%), although only 5 of the 11 are deemed to be active users.
Polyvore offers brands in-depth analytics, which enables detailed measurement of success. The platform is well suited for special events and contests – Michael Kors’ contest to create a holiday look generated 280,000 impressions, 46,391 likes and 2,921 created sets.
What’s next? E-commerce and further social integration
Interestingly, the report highlights that 20% of the studied brands still don’t sell online, and that brands who do offer e-commerce gain 19% more visits per user on average.
A key opportunity is for brands to offer sharing features on their individual product pages, as those that do register more than twice the traffic growth (year on year) than those who don’t.
FreshNetworks is a social media agency. We help global brands, including Telefonica, Jimmy Choo and American Express, use social media to achieve their key business goals. Latest news and press information