FreshNetworks Blog

You may’ve heard that supermarket behemoth Tesco has signed up for Foodie.fm – a service which has been dubbed by its backers as “the Facebook for grocers”.

Launched by technology firm Digital Foodie, Foodie.fm claims to be the first social network to offer a social shopping platform for grocers via a fully integrated checkout with www.tesco.com.

Having purchased social media company BzzAgent back in May last year,Tesco is certainly not shy about using social media as part of its wider business strategy, and their partnership with Foodie.fm looks like another way of embracing multichannel more effectively.

Foodie.fm, available as free app on iPhone, Android and Nokia applications, as well as via the Web and Facebook, enables users to make friends with other food lovers and to swap cooking tips and recipes. Visitors can create an editable shopping list, based around a meal, by clicking on photos of recipes. For example, if a user was to click on the recipe for beef burgers, the shopping list would consist of  mince meat, onions, salt, etc.

The Foodie.fm site then checks availability with Tesco before the order is placed, the customer pays and delivery is arranged.

At the core of Foodie.fm is a recommendation system that learns from a user’s eating and purchasing habits, and suggests recipes and groceries that match his or her ‘taste profile’. The system takes into account personal preferences like food allergies or intolerance, as well as any budgetary restrictions. This enables users to personalise their profile and allows the site to suggest recipes and groceries to match customer profiles. It is this customised shopping list that will help the consumer plan and budget for a week, or even month’s worth of meals, and the shopping that is needed for it, in one go.

Until now, food retailers and consumer packaged goods were somewhat sheltered from the toughening economy, with 40% of people spending more on groceries than 3 months ago (according to Deloitte) – a result not just determined by inflation, but the fact that the tough current economy means that people spending are more time at home cooking for themselves rather than eating out in bars and restaurants.

However, as Deloitte has pointed out in their recent Consumer Review,  40% of the value of all transactions in non-food retail are now digitally influenced, and it’s hard to believe this influence will not impact food and consumer packaged goods too moving forward.

With this in mind, food retailers would do well to explore options like Tesco’s partnership with Foodie.fm. Given the rise of the connected customer, retailers should look at strategies for integrating social and multichannel into their offering, and should look at ways at becoming an agile and fully engaged social business.

Whilst some big retailers are still sitting on the sidelines considering whether social media has a role in their business, one of our biggest retailers has acquired its own social media company.

Yesterday it was announced that Tesco has bought US word-of-mouth social media company BzzAgent for a reported $60 million.

Bzzagent, a Boston based start up, uses volunteers to sample FMCG products and then encourages them to describe these products through Facebook, Twitter and YouTube. The company has 800,000 volunteers, working across brands like Unilever and L’Oreal, who spend their time describing their product experience online.

By purchasing BzzAgent, Tesco clearly want to better connect social media with product marketing. With access to some on the most comprehensive consumer data collected from their loyalty card holders, the extra content and data gathered from Bzzagent can only serve to enrich this further.

Tesco clearly recognise the significance of social media in influencing buyer behaviour. None of the other major retailers has gone this far in using social media – most seem to be focusing their efforts on communities that already hold great influence, like Mumsnet, NetMums and the hugely popular Money Saving Expert.

Tesco’s move to buy BzzAgent is another example of how social media is becoming a mainstream staple in the retailer marketing mix and the opportunity it represents can no longer be ignored.

Adam Leyland’s description of new Tesco boss Philip Clarke’s use of Twitter in The Grocer this week made for an interesting read.

On 18th March Philip Clarke tweeted:  “in a social media and social commerce meeting”.

Good to hear that social media is on the radar of Britain’s top grocery boss.

However, the article then goes on to suggest that Philip Clarke’s Twitter silence last week was due to him grappling with a PR disaster at Tesco as their buy one get it free plus cash (BOGIFPC) “Double the Difference” campaign went into meltdown.

Using social media, consumers found they could exploit a huge loophole in the campaign by buying certain products at Tesco that were priced cheaper elsewhere and could actually make a cash profit. Pre-social media times, the effort to price check thousands of product lines simply wouldn’t have been worth the effort and this campaign would probably have been fine.

But social media is part of our daily lives. So when a simple site was created – www.pricechecklogicalinternetsolutions.com- allowing consumers to easily check which products they could buy and make a profit on, they used it in their thousands. As word spread on consumer forums and sites like Moneysavingexpert, Tesco were forced to pull the offer and face an inevitable furore on their Facebook page and elsewhere.

Tesco aren’t the first big brand to get caught like this and there are now lots of well documented case studies about how customers leveraging social media can force brands into taking action they would rather not have to.

While this was quite an unfortunate thing to happen to Tesco, what it would be interesting to know is if during the meeting about social media that Philip Clarke attended,  did  someone (like Tesco’s social media agency) not point out this could happen? Were they not briefed properly about future offline campaigns and how they could be impacted by the online world? We will never know for sure.

One thing’s for certain – unless agencies stop advising their clients that social media is just a channel, without looking at the wider business or brand strategy and  how social media can impact this strategy, situations like what happened at Tesco will happen again and again.

Social media has to inform and be informed by all other business initiatives; it does not happen in a vacuum and will ultimately fail if it does.

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)

Last year we wrote about the case of the Virgin Atlantic employees who were sacked for talking about customers (and indeed their employers) in social networks, and why you should be careful what you say on Facebook. At the time we wrote that:

…we’ve probably all talked about work gossip, probably with a small group of friends, privately in a bar or over dinner. What these Virgin employees did may have felt just like that – they were in a group with their friends sharing work gossip. The problem is that unlike that secluded table in the bar or restaurant, they were talking in a very public place. Perhaps the most public of places. This was their mistake.

This week had seen more cases in the UK of employees using social networks to talk about their employers and in particular their customers. With employees at supermarket chain Tesco posting reportedly abusive comments about customers in groups on Facebook. This raises a number of issues about how employers should react and when something stops being a personal or seemingly light-hearted discussion and starts being offensive in some real way.

Today I was interviewed by BBC Radio 4‘s You and Yours programme about this very issue. About what employers should do when their employees are talking about customers in social networks. About how they might set up their own online communities as both an outlet for these opinions and as a source of innovation and co-creation. And about why even if employees do talk about customers online, it’s not necessarily a bad thing.

If you didn’t catch the show then do listen to the segment below.

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Some more reading

• Social Networking Begins With You
• British Airways’ Staffers Ridicule Customers
• Why you should be careful what you say on Facebook
• Waitrose staff post abusive messages about customers on internet
• Facebook Now Nearly Twice The Size Of MySpace Worldwide
• Facebook message about night out ‘betrays’ man who phoned in sick for work