BrainTrust Query: SoLoMo Is So Confusing For Merchants
Through a special arrangement, presented here for discussion is a summary of a current article from the Hanifin Loyalty blog.
Almost every day, there seems to be a new entrant on the radar of social loyalty. You’ve already tackled Facebook, Foursquare and Twitter but don’t feel that they are doing much for your business. Your Facebook page serves as a corporate billboard, your "official" location on Foursquare doesn’t produce much buzz, and the Twitter account is more a burden to maintain than a useful business tool. You’ve tried both Groupon and LivingSocial and are still amortizing those "free first visits" you promised to users while trying to connect the dots on a break-even analysis.
It’s not easy, is it?
Now, you hear about Belly, LevelUp, and Social Passport.
- Belly wants to place a consumer-facing iPad at point-of-sale and tells you that Consumer 2.0 will flock to enjoy the promotions that you can design with complete control. They quote CEO Logan LaHive as saying "in active locations, they’re [Belly merchants] surpassing all-time Foursquare check-ins in the first month."
- LevelUp tells you that you can get ahead of the curve in "mobile payment technology," which they define as solutions which actually let consumers use a phone to pay for a good or service in a physical location. They tell you this thing called NFC is about to become prevalent as a way to facilitate payment and that you will be prepared with a LevelUp terminal.
- Social Passport rewards customers according to the power of their social graph. They quote CEO David Merel as saying merchants "want more efficient ways of driving new customers into their stores, while taking advantage of social media influence." The solution comes with an NFC link and no commissions, fees or minimum discount requirements.
The abundance of choice can freeze even the most aggressive and marketing-minded business owner. In addition to cost and operational concerns, there are reputational risks associated with allowing your business to become a guinea pig for the latest fad. The bottom line is that none of us can definitively say who the winners will be. Some of the core benefits of these new systems could be incorporated as features of established social and location based platforms. And there are other options to consider which I haven’t mentioned here.
As we’ve seen in the aftermath of the Facebook IPO, there are no sure bets. For merchants of all sizes and types, it’s a good time to watch and to
wait.
Discussion Questions
Discussion Questions: How should retailers manage the abundance of social media and mobile options flooding the marketplace? Which of the newer social media options do you think shows the most promise for retail store operators?
I have always maintained that technology is of very little use unless it is “packaged” with content, and connected to the mainstream of the retailer’s business. Translated into retail speak, these new social iterations must be imbedded into holistic solutions at the point of sale and on back to the customer database architecture.
The emergence of all of these new social media and mobile options underscores the need for suppliers to “herd the cats,” form alliances, and present a single solution provider to the retailer. Easier said than done, but it’s time to pick the winners in this space, connect them to content, front-end systems, and build a customer database that recognizes all customer touch points in harmony.
Retailers need to follow what’s going on in social media, but don’t need to dive in. There are too many social ideas. Too many payment schemes.
Retailers should take a moment to look at the number of users and how the service is being utilized. Examine the cost of implementing the service. If the cost is low, it might be worth a try.
Over 80% of the companies that approach a retailer with the next big thing in web and mobile options won’t be here in a year. Another 10% will die off in two years.
This is just a piece of the jigsaw puzzle once we put together, we will realize that the cash register and existing point-of-sale systems are outdated and antiquated.
Let’s just get to the nuts and bolts, where everybody in tech wants the retail merchant to install iPads, install their NFC mobile payment terminal, install a box that connects to the cloud, use an iPad as a cash register and now integrate SoLoMo offerings into their transaction workflow.
Until we come to the conclusion that someone needs to develop and implement an integrated point-of-sale system which is open ended and still serves as the central nervous system, we are going to continue to see these disparate and awkward “retail 2.0” technology implementations and offerings only for technology’s sake.
How to manage: Hire a full time social media marketing person and give him/her a defined project with two goals: 1) Monitor trends and relevant chatter, and 2) Participate.
Efforts that show the most promise: Pinterest now and any number of local entities (e.g., Deal Chicken in Phoenix).
Retailers need to remember what the point of getting into social media is — two-way communication with their customers. Given the risk/reward, there will be new gadgets coming every week. The only thing that is clear is that the “old” forms of communication — newsprint, TV, and radio are losing their reach. What replaces them is still undecided. Bill’s advice is the best. Watch and wait.
Full-service SoLoMo solutions for merchants are not yet baked. Large agencies are helping the big firms navigate the landscape. But what about the small and mid-size retailers and brands? It will be imperative to have some capable and proven full-service shops presenting platforms for these companies to leverage. This will take time to develop.
Are there any good examples out there? Would love to see some if anyone knows of any.
I’m reminded of the Elbert Hubbard quote:
“The world is moving so fast these days that the man who says it can’t be done is generally interrupted by someone doing it.”
Consumer expectations for Social (and Local and Mobile) customer experiences are evolving rapidly and it is critical that that merchants anticipate (or at least respond) to those changes. But it’s easy to fall into the “Shiny Object Syndrome” and keep chancing the latest product/service/widget.
You MUST understand that your customers are using Mobile devices to pre-shop your merchandise, that customers require social proof to make purchase decisions, and that the majority of the product searches on Google are influenced by local factors. What you do with that understand is the true business strategy. I use the “Moneyball” analogy with our clients. In the early 1990s, the The New York Yankees were spending $120 million on 25 players while the Oakland A’s, were spending $30 million. In theory, the Yankees should have used their payroll to buy the best players and win the most games. Yet Oakland was winning as many games as the Yankees. Why? Because the Yankees (and many other teams) were misvaluing players.
In the same way many retailers use misguided success criteria (# of Facebook Fans, E-Com Conversion Rate, etc.) to evaluate and prioritize digital marketing tactics.
The key to developing a successful digital marketing road map is to understand the major consumer and market influences, develop appropriate key performance indicators, and properly evaluate ROI for the individual tactics. Then you can build a proper roadmap that likely has both Go Fast (quick wins for nominal investment) and Go Slow (building infrastructure that will be leveraged for multiple customer experiences) components.
The first and most basic is Mo. Mobile is the piece that can help you gain the most business if you don’t already have it in place. Two reasons:
1. Mobile sites help you get found
a. 40% of local searches on Google come via mobile devices
b. 77% contact a business (call, visit) and 44% make a purchase after a mobile search
2. Mobile sites help you convert customers
a. 70% increases in conversion occur with mobile optimized sites (mobile users dislike pinching and zooming)
b. 61% are unlikely to return to mobile sites they had trouble accessing from their phone, and 40% go to a competitor’s
1a, 1b and 2b are from Google’s surveys, while 2a is from Internet Retailer.
If you’re already a local business, “Lo” is easy. “So” is hard. Make sure you’ve got “Mo” to be sure you’re not missing out on customers.
Retailers should ask themselves “What has this got to do with my business?” The fact is that all of this is a distraction from what is really important and retailers who spend all their time chasing trends instead of running their business will end up bankrupt.
There is a reason Facebook’s stock is trending down and that is there is no business model. The Facebook crowd seems to be mostly made up of pre adolescents and adolescents who aren’t concerned with grocery shopping or retail in general (look it up). They might follow fads, but if a retailer doesn’t have the right line, it doesn’t make any difference. You can’t sell what you don’t have.
Retailers need to stick to providing a great customer experience. Hire right, train well and keep the store clean and organized. Leave the social media alone for the next 10 years and see what happens
Don’t even think about social media until you have a product and service worth delivering. If you have those things in place, social media will help you spread the word. But if your product or service is not up to par, social media is going to kill you if you use it.
If you are ready to make the plunge, pick one technology and master it rather than be just okay at a lot of technology.
Social media success requires focus and consistency. Neither are possible if we dash around after the latest sexy online offering.
So here is what I recommend: much social media is sold through FUD (Fear, Uncertainty, Doubt). Rise above the FUD. There is little or no advantage in being the first to leverage some shiny new bauble. Instead, sit back and watch for those things that come together to deliver market power for you. Then you succeed with social media.
NONE of these channels are worth betting the farm on … including today’s leaders. Watch, participate in moderation, and wait. Life will settle down in 18 months. I can just feel it.
I believe it is in every retailer’s best interest to reassess their brands in the context of SoLoMo. Think about the experience they want their customers to have in order to fulfill the brand promise and then explore the options. And there are many….
Since we wrote this article, I’ve talked with several local merchants and the responses vary by their level of sophistication and familiarity with technology. At the high end of the scale, there is recognition of the many alternatives available, but knowing what to do with Facebook, Twitter, Foursquare, and Groupon/Living Social is enough to stunt any interest in further options.
There is clearly a need to provide clarity to local merchants to help them understand their options. Those behind the four mentioned above would be well served to make a more explicit and clear offer of merchant support (merchant portal) available to help business engage with their networks/services.
Social media is largely about entertainment and communication while on the go to friends and family. In fact, those who are tuned in are largely playing a game or text messaging to a friend or group. There is no denying that the opportunity to signal a company’s existence and solicit a visit to shop is tempting just because of the large number of participants present at any time.
But a cool-headed close review of what is going on here will bring the realization that this is not much more than an opportunity to place an electronic sign post for consumer awareness. Expanding the electronic sign post to create an entrance to the company’s site is very much worth wile. Making the entrance to the company’s web site a game of opportunity to find and collect tangible incentives is in concert with the desires of most users of social media, and may create a new customer. If the game is fun and the sale is perceived to be a good deal by the visitors, the company may earn the much coveted word of mouth reward. Retail executives must know that this is only an awareness venue and will never remove the necessity of a web site and or a physical location.
For the most part, social media applications are slaves to the devices they service. The vast majority of these companies will fail to evolve with the changing of IT device opportunities. More power in a smaller practical footprint which is more user friendly is the evolutionary mandate of the IT industry, making radical changes a normal way of life. I am therefore of the opinion that social media as we know it today, and the high rollers of the present day platforms will yield to the technologies of the near future. Retail companies should move in on these opportunities, but not all in.
How should retailers manage the abundance of social media and mobile options flooding the marketplace? By ignoring them. (ALL of them.)
Which of the newer social media options do you think shows the most promise for retail store operators? None.
The best advice I can offer is that merchants not worry so much about the various technologies and applications and focus more on the consumer behaviors they want to modify, amplify or change. Set clear objectives from a business standpoint and then sit down with someone who totally understands various platforms and their capabilities. The best technology is the one that achieves the customer behaviors and experience you need.
Dan Raftery has the best advice so far: Hire a social media head and get them going on learning and participating. Adding on to this, I recommend taking advantage of the social media itself, by utilizing crowdsourcing to determine the best fit to the retailer’s value proposition, DNA, and “voice.” One mistake many retailers and brand are making is diving into various platforms without strategic thought around aligning the platform’s intended audience and desired experience with their own intentions.
Ignoring this world is not an option. This is where more and more of the world’s population is communicating and “living” their lives. However, jumping into everything is silly too. Have your full time social media person or team focus on learning about each platform, and staying on top of new ones. See which platforms seem to align with your DNA and purpose. Participate, learn. Participate, learn. You will find the platforms that resonate with your consumer and align to your purpose.
Good article Bill! You could definitely spend a lot of time and energy getting nowhere seeking to try the next new thing.
Doug Stephens makes a great comment … although it’s hard to take this path if the retailer doesn’t have a vision and strategy for the future of their brand. In my view, too few retailers have a strategy or brand promise beyond operating parameters and guardrails.