Online commerce is changing — FAST! A strategy where tech weenies used to dominate is quickly changing as the importance of online and mobile sales increase dramatically. IS YOUR BRAND READY FOR THESE CHANGES ????
Not only are more customers shopping using their computers tablets, and smartphones, but digital influence dwarfs the voice of brands’ paid advertising. Frankly, I’m appalled that offline advertising still makes up the lion’s share of a brand’s marketing budget.
So, what’s driving this change? Well, a number of things. Let’s take a look, courtesy of IBM’s graphic.
Word of mouth is nothing new. We’ve always known the power of social influence on consumer purchase intentions is strong. Social media just provides a platform for social influence to spread like wildfire.
But, the importance of social media for marketing doesn’t end with encouraging amplification and positive sentiment about your brand. Possibly the most important aspect of social media is the customer insights provided by all that data about customers and their lifestyles, wants and needs, problems and triumphs, how they express themselves, what they like and hate, etc. This unstructured data is a gold mine of customer insights that’s hard to collect using standard market research tools.
Yet most firms ignore this rich vein because they lack the tools and skill to effectively manage unstructured data. Others ignore customer insights from social media because they’re uncomfortable with the touchy-feely nature of these sociological customer insights. I remember teaching some folks for a consumer packaged goods (CPG) company which shall remain nameless, but their initials are P and G. These entry level engineers managing consumer brands thought it was crazy to use this type of customer insight to guide management decisions. They needed hard numbers, not some squishy “emotional” stuff.
But, social media offers much more than just customer insights in terms of “emotional” stuff. Using tools designed to handle big data, such as IBM’s Big Insights, can convert unstructured data into structured customer insights used for predicting things like demand in real time. Customer insights from social media include segmentation by classifying consumers into behavioral groups and developing strategies for optimizing marketing ROI from each group. Social media provides additional customer insights such as geographic clusters to help guide location strategies, consumer hot buttons to guide promotional strategies and many other customer insights that give you a competitive advantage with your target market.
Cross-channel customer insights
We no longer live in a world where customers choose a single channel for their purchases. As you can see in the graphic, consumers combine in-store search with online purchase almost as much as they use the internet to help guide in-store purchases. These shoppers spend 400-500% more than more traditional shoppers — making them a fantastic opportunity for retailers.
So, what do these customer insights suggest? Why not make it easy for in-store shoppers to use their smartphones and increase sales?
For instance, ShopKick enables retailers to track customers through the store, offering incentives for purchase and offering information to stimulate buying. Even without the high cost of this technology, Macy’s effectively uses QR codes to promote purchase. Shoppers can access information throughout the store using QR codes to provide more information about products, suggest options for accessorizing or complementary items, or just giving shoppers insights from clothing designers.
And, consumers are perfectly comfortable using their smartphones to make purchases. So, why not reduce frustration and shorten lines (especially problematic during the Christmas season) by letting customers use their phones to buy products in your store. I recognize retailers fear theft, but look at the opportunity cost of NOT doing it. Grocery stores are ahead of the curve on this one. My Giant store offers scanners that allow customers to scan and bag items as they shop through the store. When they get to the register, customers simply upload the scanner data and swipe their credit cards. It’s only a short step from this to replacing the scanner and register with smartphone apps. As a bonus for consumers, smartphone grocery apps already provide coupons that could automatically reduce purchase price. Everyone wins.
But, don’t forget the wave of data available when consumers use these digital devices. Analyzed effectively, these customer insights further enhance the retailers marketing strategy.
Wanna learn more. I’ve got a lot more insights on social media analytics from my week with IBM. So, be sure to bookmark this site so you can come back tomorrow. Or, better, sign up for my email newsletter to learn more about social media analytics and marketing strategy. If I’ve whetted your appetite to use more analytics to optimize your marketing, let me show you how Hausman and Associates can help with our unique virtual agency model that provides cutting-edge social media at a reasonable cost.