Listening & Engaging:
21st July, 2009
A Social Media Framework for Retailers
Maya Swedowsky – Research Manager - [email protected]
Alex Burmaster – Communications Director – [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: UK Office of National Statistics
0%
1%
2%
3%
4%
0
50
100
150
200
250
No
v-0
7
Dec-0
7
Ja
n-0
8
Feb
-08
Ma
r-0
8
Ap
r-0
8
Ma
y-0
8
Ju
n-0
8
Ju
l-0
8
Au
g-0
8
Se
p-0
8
Oct-
08
No
v-0
8
Dec-0
8
Ja
n-0
9
Feb
-09
Ma
r-0
9
Ap
r-0
9
Ma
y-0
9
Pe
rce
nt
of
UK
Re
tail
Sa
les
Po
un
ds
(M
illio
ns
)
Retail E-Commerce Sales % of Total Retail Sales
2
© 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 shops?
• 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
3
© 2009 The Nielsen Company
www.nielsen-online.com / www.nielsen.com
What does this mean?
• Visibility into Internet behaviours is critical across all levels
of the retail organisation
• Social media strategy cannot be relegated to the Internet
team in the basement
4
© 2009 The Nielsen Company
www.nielsen-online.com / www.nielsen.com
Key Findings
• Consumer-Generated Media
Overview
Establishing relevancy for retailers
• Listening
Overview
Private label case study
• Engaging
Overview
Best Practices
• Final Advice
• Q&A
5
Consumer-Generated Media
© 2009 The Nielsen Company
www.nielsen-online.com / www.nielsen.com
Our CGM Dataset
Early-Stage Internet Today
Audio
blogsUsenet
newsgroups
Discussion
forums
Consumer
blogs
Video blogs
Micro-
community
sites
Ratings &
review sites
Groups
Media
blogs
Marketer
blogs
Feedback
portals
Mobile
blogs
Social
networksCo-creation
Typ
es
of
Co
ns
um
er-
Ge
ne
rate
d M
ed
ia
From early newsgroups to Twitter, consumer-generated media (CGM) has come a long way and continues to grow rapidly
Video
7
© 2009 The Nielsen Company
www.nielsen-online.com / www.nielsen.com
Twitter no longer just for techies -
1,742% YOY
82% YOY
25% YOY
UK Unique Audience (Millions) for Twitter, Facebook,
YouTube and MySpace, June 2008 – June 2009
0
5
10
15
20
Ju
n-0
8
Ju
l-0
8
Au
g-0
8
Se
p-0
8
Oc
t-0
8
No
v-0
8
De
c-0
8
Ja
n-0
9
Fe
b-0
9
Ma
r-09
Ap
r-0
9
Ma
y-0
9
Ju
n-0
9
Un
iqu
e A
ud
ien
ce (
Mill
ion
s)
Twitter Facebook
YouTube MySpace
19% YOY
Who’s engaging in UK CGM?
Source: NetView, Home & Work, June 2008 – June 2009
Demo Index
Gender Male
Female
98
102
Age 12 – 17
18-34
35 – 49
50+
102
112
105
91
HH
income
£20K –£30K
£30K–£50K
£50K+
101
99
101
8
Metric June ‘08 vs.
June ‘09
# unique visitors
Time per person
+24%
+86%
Change in UK CGM Stats, YOY
Visitation up over 1,700% 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
• Need to create and make change
• Allows us to promote the things and people we love
• Easy, low barriers to entry, technology
9
© 2009 The Nielsen Company
www.nielsen-online.com / www.nielsen.com
Purchase consideration process has always been a social endeavour; 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
AwarenessResearch &
ConsiderationTrial /
PurchaseLoyalty Advocacy
Multiplier
Effect
10
© 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.
11
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
• Keep finger on pulse of consumer sentiment toward brand
Brand Health Tracking
• Delve into specific issues facing brand
• Identify opportunities, ideasConsumer Insight
• Assess impact of campaign; is marketing message resonating?
Campaign Planning & Tracking
• Uncover and prioritize threats to brand image in real-time
Reputation Monitoring
• Identify customers in need of support and the issues they are discussing
Online Customer Relations
• Augment existing research, layer CGM into customer satisfaction tracking
13
© 2009 The Nielsen Company
www.nielsen-online.com / www.nielsen.com
• Customer service
• Return/voucher 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
• Delivery charges
• Weekly ads
• Selection
• Availability
• Pricing
• Quality
• Private label
• Trial sizes
• Brand health – charity,
sustainability policies
• Community relations
• Vouchers & circulars
14
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
16
© 2009 The Nielsen Company
www.nielsen-online.com / www.nielsen.comNote: Timeframe: last 90 days as of 8th May 2009
“Own brand” discussion driven by Baby categoryStore brands
deemed “cheaper” and “less
expensive,” but essentially the “same” as big
names (i.e. just as “good”)
Shoppers most closely associate own brands with
the Baby category
Organic grocery emerges as
potential opportunity
Kirkland is the only own brand
mentioned explicitly
17
Brand Association Map™
© 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”
18
© 2009 The Nielsen Company
www.nielsen-online.com / www.nielsen.com
Buzz Volume for the Own 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.
• Own 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 own brand competitors
19
© 2009 The Nielsen Company
www.nielsen-online.com / www.nielsen.com
Price, comparisons to big name brands drive club own brand discussion
BJ’s own 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 Own 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
20
A
A
A
B
B
© 2009 The Nielsen Company
www.nielsen-online.com / www.nielsen.com
Baby category dominates club own brand buzz, presenting a large opportunity, especially for BJ’s
Almost two-thirds of
discussion about
BJ’s own brands
focuses on nappies,
formula and baby
wipes
Product Categories Referenced in Discussion About the Own 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 mums are reticent 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??”
22
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*
• 31% 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 Research
24
© 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
• Drive awareness, attract new customersMarketing Campaigns
• Increase customer satisfaction through proactive outreach and timely response
Customer Service
• Give company a voice and personal touch
• Manage crises, promote transparency
Corporate Communication
• Take risk out of buying new products
• Promote transparencyProduct Reviews
• Leverage your customers’ ideas for product development
Crowd-Sourcing
• Increase employee satisfaction, service
• Product developmentInternal
Communication
25
© 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
WebsiteThird Party
Tools
Corporate
Blog Product
Reviews
Forum /
Community
Social
BookmarkingChat
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
26
© 2009 The Nielsen Company
www.nielsen-online.com / www.nielsen.com
Best Practices: Being Social
Community site containing employee blogs,
P2P help/answer section, seeks consumer
ideas, gossip
What is it?
Why we like it
ASOS’s Social Communities – ASOS Life
Integration – same log-in as e-commerce site
– just have to choose a username
Personal – gives ASOS a human element –
blogs/pictures
27
© 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 congregating
Personal – gives Zappos a human element
28
© 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 starsWhat is it?
Why we like it
Wal-Mart’s Product Reviews
Active – Wal-Mart reviews have accumulated
critical mass
Transparent – feedback is not censored; W-M
posts one star and five star reviews alike
Personal – allows customers to share photos of
themselves using the product
Easy to Share – ability to share review via Twitter,
Facebook, Digg and del.ici.ous
Connects 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 reviews
Expert Reviews – have industry experts share
professional reviews by video
29
© 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 development
Transparent - 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 input
Encourages Community - ability for customers
to talk to each other and Starbuck employees
30
© 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 internally
Highlights 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”
campaign
Enhances Employee Satisfaction -
allows engaged employees to share their
thoughts and make proactive contributions
to the company
31
© 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
32
© 2009 The Nielsen Company
www.nielsen-online.com / www.nielsen.com
Thank you.
For more information/questions contact:
Alex Burmaster
+44 (0) 20 7014 0597
Or
Maya Swedowsky
+1 646 654 7839