Social Networking and Retail

Social networking is hot, and it's not just for teens. The fastest growing demographic on Facebook (according to the site) are those 25 and over. The company says it has more than 90 million active users and, according to Internet research company comScore, is the fourth most-trafficked website in the world. But social networking isn't limited to Facebook, although it and MySpace are often the first that come to mind. Any Web-based online community, typically built around shared interests, that allows users to interact and exchange information -- a comments section on a blog or website, a virtual world (with social shopping) such as SecondLife or YouTube -- can be a social network. They are all spaces created for users to share information. And boy do they share. How can retailers and brands use these sites to drive shoppers or grab interest in-store? Many interviewed believe this type of integration is in its infancy stages and not much of an in-store marketing tool. But for those gathering shopper insights, social networks are not to be overlooked.Guerilla Insights"There is an inordinate amount of data," says Gary Gilmer, principal at Chicago-based Clarity Consulting. "People document everything about themselves." He says the industry is headed toward finding ways to leverage what shoppers are putting on social networks and combine it with what retailers know about their shoppers through information gathered via loyalty cards. Think of it as gathering guerilla insights. Though sources stress being open and honest about collecting data, companies should avoid brand speak. "Customers are more savvy than marketing departments usually think," says Luis Carbajo, CFO, rSitez, Sparks, NV, and a former Amazon.com executive. Creating "human" interaction could be as simple as posting a question to a specific audience."This will give the marketing department 10 times more ideas than what they will be able to produce by themselves," Carbajo says. "The beauty of having a social community is that you have data that you can process and analyze to make your products and offerings better in hundreds of different ways."Chris Bragas, CEO of Eastwest Marketing Group in New York, tells retailers and brands to join social networks, sit back and observe, and try not to influence. He says social networks can be used as a shopper research tool "with a huge grain of salt.""If visitors to the social networking sites realize that their comments are being used to better the product or shopping experience, they will continue to embrace the dialog," Bragas says. "But, if they realize that their comments are simply being folded into a selling strategy, they will quickly shut down all conversation. It all boils down to trust. The social networks are perceived as authentic friends providing firsthand information. If corporations are inserted in the mix, the 'trusted friend' is no longer valid and it might as well be an ad."Bill Eager, president of bSocial Networks in Denver, says two types of data can be useful to brands and retailers: One is data that is transparent to the user, such as unique visitors, click-throughs and open-rate statistics; second is what is knowingly shared, like product reviews and commentaries.Monitoring what is being said about your brand or store -- both good and bad -- is one of the great benefits of social networks. Many interviewed for this article cited Comcast as a company that has employees solely dedicated to monitoring what is being said about it. When it's positive, they thank the posters. Negative comments are addressed and problems are resolved."Social networks are going to stick, you are going to have to participate," Gilmer says. "Don't let social networks evolve and you not evolve with them. Managing the message on the Internet will become more important than managing the message in the media."Retail Possibilities? So how do you tie these virtual conversations and findings into your in-store environment? It can be as simple as giving products better in-store displays or positions. bSocial Networks' Eager says if you learn that a baby stroller or fly-fishing rod is more popular than you thought, merchandise it more prominently. If you learn that red sells more than blue, you may want to update your in-store decor.In-store signage and packaging can drive shoppers to online communities in which you're participating, while online coupons in those virtual spaces can encourage consumers to visit the store.IconNicholson, working with fashion designer Nanette Lepore, is making the real-world store environment more virtual and social. The company's "Social Retailing" concept includes interactive dressing room mirrors combined with RFID-tagged clothing that allow shoppers to virtually try on clothes and then use their cell phones to text their friends for feedback. Those "remote" friends enter a URL and password on a Web browser to see you in the outfit in real time and can order online. Cross-sell and up-sell opportunities are also included, says Joseph Olewitz, senior vice president, client relations for IconNicholson, New York.Borders revamped its website into a social site that includes custom video content made in its stores, such as interviews with authors and live music performances. The videos are leaked to YouTube and other sites (fully branded as Borders), and clips run on its in-store TV network.In another example, Procter & Gamble utilized bloggers to spread word of mouth in support of its Crest Weekly Clean Intensive Cleaning Paste. P&G sent select bloggers the product and some responded with reviews, showing that, at its core, social networking is simply buzz, word-of-mouth marketing.Since cell phones are ubiquitous, many see further opportunities for in-store use. Gilmer envisions retailers eventually taking what they know about shoppers from loyalty cards and combining that with data from social networks to create shopping lists sent to your phone. He also sees a day when shoppers use their phones in-store to scan bar codes.The retailer, knowing that you care about environmentally friendly products, then sends you a message: Do you know about these other, more eco-friendly options? "It's not necessarily about influencing their buying decisions -- that could backfire -- but adding additional value and further building my brand," he says.Carbajo sees the possibilities of social networks and in-store converging through events. "Imagine Home Depot hosting a 'how to build your patio' event in one of its stores for all of the people in its social site that are in 'patio and gardening,'" he says. The retailer tapes the live event, posts it to its site and event attendees share with others, driving Web and possibly in-store traffic.Some also see the possibilities of social networks being used for employee training. A MySpace-type page where employees can learn from peers, share in-store experiences and watch training videos, Pulse and Circuit City announced in July that CityPulse, a "unified community and social network," would connect manufacturers and store associates. IconNicholson developed interactive mirrors for dressing rooms that allow shoppers to virtually try on clothes and send pictures of themselves to friends via a social site for feedback.