Listening & Engaging:
July 15, 2009
A Social Media Framework for Retailers
Maya Swedowsky – Research Manager [email protected]
© 2009 The Nielsen Company www.nielsen-online.com / www.nielsen.com
While online sales have grown steadily, the share of online sales remains relatively small
Source: U.S. Census Bureau2
© 2009 The Nielsen Company www.nielsen-online.com / www.nielsen.com
However, what is becoming abundantly clear is the influence of the Internet on offline purchasing• Site to stores: What impact does my Web site have on sales that are
transacted in my stores?
• Online advertising on offline sales: What impact does my online advertising have on offline sales?
• Social media: What are people saying in social media about my brick and mortar business? What can I do about it?
Key takeaway: What happens online does not stay online
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© 2009 The Nielsen Company www.nielsen-online.com / www.nielsen.com
What does this mean?
• Visibility into Internet behaviors is critical across the retailenterprise
• Social media strategy cannot be relegated to the Internet team in the basement
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© 2009 The Nielsen Company www.nielsen-online.com / www.nielsen.com
Key Findings • Consumer-Generated Media
OverviewEstablishing relevancy for retailers
• ListeningOverviewPrivate label case study
• Engaging OverviewBest Practices
• Final Advice
• Q&A
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Consumer-Generated Media
© 2009 The Nielsen Company www.nielsen-online.com / www.nielsen.com
Our CGM Dataset
Early-Stage Internet Today
Audio blogs
Usenet newsgroups
Discussionforums
Consumer blogs
Video blogs
Micro-community
sites
Ratings & review sites
Groups
Media blogs
Marketer blogs
Feedback portals
Mobileblogs
Social networksCo-creation
Type
s of
Con
sum
er-G
ener
ated
Med
ia
From early newsgroups to Twitter, consumer-generated media (CGM) has come a long way and continues to grow rapidly
Video
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© 2009 The Nielsen Company www.nielsen-online.com / www.nielsen.com
Twitter no longer just for techies -
1448% YOY
190% YOY
17% YOY
Unique Audience (Millions) for Twitter, Facebook, YouTube and MySpace, May 2008 – May 2009
10% YOYWho’s engaging in CGM?
Source: NetView, Home & Work, May 2009, May 2008
Demo IndexGender Male
Female98
102
Age 12 – 3435 – 4955+
10311591
HH income
$25K –$50K$75K–$100K$150K+
9999
105
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Metric May ‘08 vs. May ‘09
# unique visitorsTime per person
+9%+67%
Change in CGM Stats, YOY
Visitation up almost 1500% YOY as celebs and gen pop jump on the bandwagon
© 2009 The Nielsen Company www.nielsen-online.com / www.nielsen.com
So, why is Social Media so big?
• Satisfies emotional need to be heard
• Gives ability to connect with one another
• Allows us to promote the things and people we love
• Easy, low barriers to entry, technology
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© 2009 The Nielsen Company www.nielsen-online.com / www.nielsen.com
Purchase consideration process has always been a social endeavor; CGM brings it to a whole new level• CGM expands a shopper’s personal network of just a handful of
people to hundreds, if not thousands, of people
• Advocacy has always existed, but social media has made this stage even more critical, amplifying the size of the audience reached
MultiplierEffect
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© 2009 The Nielsen Company www.nielsen-online.com / www.nielsen.com
CGM provides Retailers with two key opportunities: Listen and Engage
1. Listen – Observe naturally-occurring online discussion to understand consumer attitudes and needs, and answer key business questions
○ The promise of listening is compelling
○ Acts as barometer for passion
○ Provides early detection of risks, opportunities, happens in real-time – fast!
○ Enhances current research methods: “focus the focus group,” ask the right questions
2. Engage – Proactively and transparently encourage and take part in online conversations about you and the products you sell.
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Listening
© 2009 The Nielsen Company www.nielsen-online.com / www.nielsen.com
Here’s how all companies should be thinking about listening…
Customer Service & Checkout
In-Sore Experience
Corporate Comm.
Crowd-Sourcing
.Com Experience Products
• Augment existing research, layer CGM into customer satisfaction tracking
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© 2009 The Nielsen Company www.nielsen-online.com / www.nielsen.com
• Customer service• Return/coupon policy• Layout• Merchandising• Locations
And here’s how you should be thinking about listening as a Retailer
Crowd-SourcingProducts
.Com ExperienceIn-Store Experience
Products Marketing
• Informational resource• Transactions• Shipping charges• Weekly ads
• Selection• Availability• Pricing• Quality• Private label• Trial sizes
• Brand health – charity, sustainability policies
• Community relations• Coupons & circulars
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Listening: Private Label Case Study
© 2009 The Nielsen Company www.nielsen-online.com / www.nielsen.com
Nielsen Online captures and analyzes CGM to gain insight into consumer perception and needs
Nielsen Online Content Reservoir• Over 110M blogs• Tens of thousands of forums and
groups• Social networks (e.g. Facebook)
and micro-blogging (i.e. Twitter) platforms
Analyst Team
Social NetworksBlogs
Forums Twitter
• Over 10 years of social media expertise
• Industry-focused analysts
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© 2009 The Nielsen Company www.nielsen-online.com / www.nielsen.com
Note: Timeframe: last 90 days as of 5/8/09
“Store brand” discussion driven by Baby category
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© 2009 The Nielsen Company www.nielsen-online.com / www.nielsen.com
Passion for Costco’s products, service drive its disproportionately large share of voice
Market Share Based on 2008 Revenue Buzz Share
Buzz share is depicted as a percentage of 546,275 mentions of Costco, Sam’s Club and BJ’s in 2008
Source: United States Securities and Exchange Commission
• When fans and employees noticed that Costco did not have an official Facebook Page, they created multiple Pages, with some attracting more than 50,000 fans. To put this in perspective, the largest BJ’s Facebook Page has just over 200 fans.
“Going to costco = religious experience”
“I love Costco. :) It is one of my favorite places ever. Literally”
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© 2009 The Nielsen Company www.nielsen-online.com / www.nielsen.com
Buzz Volume for the Store Brands of Costco, BJ’s and Sam’s Club
Buzz volume is depicted as a percentage of 343,043,278 messages occurring between November 16, 2008 and May 9, 2009.
• Store brand discussion tends to account for less than 5% of club store buzz. More commonly discussed topics include:
• Prices• Membership fees• Name brand products
Costco’s private label line, Kirkland, maintains steady lead over club store brand competitors
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© 2009 The Nielsen Company www.nielsen-online.com / www.nielsen.com
Price, comparisons to big name brands drive club store brand discussion
BJ’s store brands yield greatest share of discussion about price as parents discuss saving money by purchasing Baby products in bulk; for BJ’s private label products, price trumps quality
Costco’s private label line yields the smallest share of comparisons to big name brands, pointing to the possibility that Kirkland could be on its way to being considered a brand with an independent identity
Topics Driving Discussion for the Store Brands of Costco, BJ’s and Sam’s Club
Note: n =100 messages for each retailer, timeframe = Q1 2009; topics accounting for less than 3% of discussion have been removed for ease of viewing
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A
A
A
B
B
© 2009 The Nielsen Company www.nielsen-online.com / www.nielsen.com
Baby category dominates club store brand buzz, presenting a large opportunity, especially for BJ’s
Almost two-thirds of discussion about BJ’s store brands focuses on diapers, formula and baby wipes
Product Categories Referenced in Discussion About the Store Brands of Costco, BJ’s and Sam’s Club
Note: n =100 messages for each retailer, timeframe = Q1 200921
A
A
© 2009 The Nielsen Company www.nielsen-online.com / www.nielsen.com
Despite FDA rules, some moms are too “gun shy” to use generic formula
“OK so now that Jenna is FF quite a bit, I realize just how expensive this stuff is! I have been using the Enfamil Lipil and she loves it. I know there are generic formulas and the Berkely & Jensen brand is SO much cheaper (BJ's Wholesale
brand). But, I am gun-shy to use it. Anyone else nervous to use generic formulas or is it just me??”
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Safety concerns, lack of awareness of FDA regulation
BARRIERS TO ENTRY
“Has anyone used the Sam's club brand diapers? Do you like them? I was thinking
about trying them, but it's such a huge box.Does anyone know who makes them? If they are sold at another store as their brand I
could buy a smaller package.”
Large package sizes
BARRIERS TO ENTRY- iVillage.com messageboards, 03/05/09
- Ovusoft.com, 02/24/09
Engaging
“With social media is it about a true authentic connection with an audience…It's a way to engage people and it's an augment for your product... Don't think of it as a substitute for traditional marketing…It's a great amplification to what you are already doing.”John Andrews, senior manager of emerging media for Wal-Mart
© 2009 The Nielsen Company www.nielsen-online.com / www.nielsen.com
Almost two-thirds of Retailers have already invested in CGM; another 22% plan to get involved within the next 12 months*
• 30.5% of Retailers say that social network presences will perform better as a marketing vehicle than paid search or search engine optimization in 2009 (Source: Internet Retailer survey)
• Not sure how to get involved? That’s why we’re here today!
*Source: Forrester Research24
© 2009 The Nielsen Company www.nielsen-online.com / www.nielsen.com
Use CGM to power your business by enhancing your website and leveraging 3rd party tools
Customer Service & Checkout
In-Sore Experience
Corporate Comm.
Crowd-Sourcing
.Com Experience Products
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© 2009 The Nielsen Company www.nielsen-online.com / www.nielsen.com
Give shoppers a reason to visit your website and keep them engaged, but focus majority of effort on expanding your footprint and reaching shoppers where they are already congregating
Retailer Website
Third Party Tools
Corporate Blog Product
Reviews
Forum / Community
SocialBookmarking
Chat Functionality Twitter
Social Networks
Video
Proactively and transparently encourage online conversations, participate and react quickly. All forms of engagement should support common goal/voice.
Blogs, Forums, Social Shopping & Product Review
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© 2009 The Nielsen Company www.nielsen-online.com / www.nielsen.com
Best Practices: Customer Service
Twitter as key platform for providing customer service, in addition to more traditional outlets (24/7 phone line, email)
What is it?
Why we like it
Zappos’s 360 Degree Customer Service
Immediate – reaches shoppers where they’re already congregatingPersonal – gives Zappos a human element
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© 2009 The Nielsen Company www.nielsen-online.com / www.nielsen.com
Best Practices: Product Reviews
Product review platform, includes free-form text as well as assigning # of stars
What is it?
Why we like it
Wal-Mart’s Product Reviews
Active – Wal-Mart reviews have accumulated critical massTransparent – feedback is not censored; W-M posts one star and five star reviews alikePersonal – allows customers to share photos of themselves using the productEasy to Share – ability to share review via Twitter, Facebook, Digg and del.ici.ousConnects Customers - customer Q&A Exchange gives customers the opportunity to ask each other very specific product-related questions before making a purchase
What’s next? Video – third party review sites (e.g. Expo TV) and a few retailers (e.g. Amazon) allow customers to post video reviewsExpert Reviews – have industry experts share professional reviews by video
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© 2009 The Nielsen Company www.nielsen-online.com / www.nielsen.com
Best Practices: Crowd-sourcing
Micro-site encourages customers to submit ideas related to Starbucks products, experience and community involvement
What is it?
Why we like it
Starbuck’s My Starbucks Idea
Different - one of the few companies proactively leveraging customers for product developmentTransparent - gives readers an ongoing sense of involvement by categorizing submitted ideas as “under review,” “reviewed,” “coming soon” and “launched”Socially Responsible - Starbucks isn’t just taking by asking customers for product ideas, it is also giving by making changes to its environmental practices and community involvement, based on customer inputEncourages Community - ability for customers to talk to each other and Starbuck employees
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© 2009 The Nielsen Company www.nielsen-online.com / www.nielsen.com
Best Practices: Internal Communication
Private social media platform for Best Buy’s 150,000 employees encourages communication and collaboration.
What is it?
Why we like it
Best Buy’s Blue Shirt Nation Mix
Different - one of the few retailers using social media internallyHighlights Importance of Customer Service – Best Buy believes that its employees are one of its best assets, as evidenced by its TV commercials, including its latest “True Stories”campaignEnhances Employee Satisfaction -allows engaged employees to share their thoughts and make proactive contributions to the company
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© 2009 The Nielsen Company www.nielsen-online.com / www.nielsen.com
Final Advice• What happens online does not stay online • Assume consumer control/power will grow – listen to your customers• Get the listening piece right – no short cuts• Engage, participate, sense & respond• Nurture and protect brand credibility by being honest, open and
transparent – introduce yourself!• Do not neglect your website, it is one of your best marketing vehicles…• But focus majority of effort on reaching customers where they’re already
congregating• Rethink the strategic role of customer service• Think beyond loyalty to “advocacy”• Learn from everyone in your organization
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© 2009 The Nielsen Company www.nielsen-online.com / www.nielsen.com
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