Why Multi-Channel Retailers Must Become Social for the Holidays

The concept of "social shopping," a popular category of e-commerce that combines two favorite online activities (shopping and social networking) is transforming online retail and will be an important driver for retailers seeking to embrace an increasingly multi-channel world as they prepare for the 2010 holiday season.

Often many shoppers aren't sure what to buy, but they know they won't find it on the sites of mainstream retailers. As such, consumers often refer to views about shopping experiences and tips on what's hot, new and exciting or which stores to go to, on social networking sites like MySpace, Facebook, Twitter, etc.

For instance, Best Buy staffed its holiday "Twelpforce" with 2,500 employees who responded to client inquiries via Twitter; this was an extension of a broader-based effort that led to the answering some 20,000 questions during the 2009 pre-holiday season.

 

Social media is clearly a valuable mechanism that retailers can leverage in their multi-channel efforts to improve customer experience. Retailers can either to carve out their presence on popular networking sites or create their own social networking channel on their Web sites. Retailers creating their own presence should ensure that (1) they are linked to major social networking pages (2) have instructional/promotional videos on key video sites, and (3) have a provision for social bookmarking.

If retailers chose to create their own social networking sites they should ensure that their sites have two key capabilities: foundational and innovative. Foundational capabilities include the ability to research products, save research results, buy products and obtain basic services, while innovative capabilities include personalization, loyalty, stickiness, mobile enablement, and multi-channel functions.

Attracting consumers to your brands is one thing, but how do you generate enough interest so that consumers stick to your brands? Retailers can start with providing customers a platform/medium to share their opinions, reviews and feedback; in a way enabling social shopping along with social networking.

Customers like to interact and socialize with like-minded people; a capability for creating communities is therefore a must for all retailers to energize socially savvy customers with reviews and widgets. The next step to this should be to bring interactivity in social media, by designing for "browse," which will help gain stickiness e.g. some retailers provide customization of product features like product color, texture, etc. to be viewed online.

Social networks bring new elements into the online shopping experience and are potential springboards for lead generation and added revenue. Additionally, retailers can expect benefits through optimizations and improvements in:

(1) Store Operations by sharing best practices, prompt answers to questions, identifying and engaging top performers and getting management on the same page as a team.

(2) Customer Experience by capturing and sharing customer insights to store employees to serve customers, streamlining operations to create a customer focused culture.

(3) Customized merchandising and planning by understanding local markets and collaborating for successful program execution.

(4) Product development and innovating by sourcing new ideas, gaining feedback on new product concepts, improving supplier management and reviewing opinion polls/customer feedback for improved inventory management.

Nitin Saini handles Retail Practice responsibilities for Tata Consultancy Services.