Retail TouchPoints: Which Retailers Are Winning in the Blogosphere?
By Amanda Ferrante
Through a special arrangement, presented here for discussion is an excerpt of a current article from the Retail TouchPoints website.
Value retailers such as Costco and BJ's Wholesale Club with reputations for selling quality merchandise at low prices are benefiting from positive buzz in the blogosphere. The two wholesales clubs received the most favorable Consumer Generated Media (CGM) coverage across the retail industry, according to the conclusions of a recent study from CARMA International, a global media analyst firm. In contrast, traditional department stores (Macy's and Sears) and mass merchants (Kmart) fared poorly.
The study, U.S. Retailers: Winners and Losers in the Blogosphere, reflects research from a compilation of more than 3,700 blog posts and other consumer generated discussions about 17 of the largest U.S. retailers in three sectors in the industry in the months of January and February.
Not surprisingly, another key quality of coverage was that the more a retailer was affected by today's economic turmoil, the worse its coverage was. Macy's exemplified this trend, as recurrent concentration on its poor earnings and store closings resulted in some of the worst coverage overall in the industry.
CGM coverage of the wholesale and club store sector was dominated by Costco, which appeared in 25.7 percent of all CGM reports analyzed, the second largest share of coverage behind retail giant Walmart (42.3 percent of posts analyzed). As a result of combining strong showing by share of coverage and its solid favorability performance, Costco by far has the best overall performance. It did, however, take second to BJ's Wholesale Club in favorability.
Costco emerged along with Target to be the only two retailers that exceeded the industry's share of voice and favorability averages. Overall, 89.6 percent of blog reporting on Costco focused on its offerings or visits to the store, with both receiving moderately favorable attention. Thirty-five percent of stories consumers shared in the blogosphere were centered on Costco's deliverability in the grocery sector, while 10.4 percent focused on the consumer electronics sector.
Walmart has been called "evil" or "a shining example of American capitalism" in the blogosphere. Therefore, despite having a larger volume of favorable CGM reports (49 posts) than unfavorable CGM reports (43 posts), its overall favorability rating was 49. Although Walmart's attention was negative overall, it did prevail as many posts noted the retailer excelling in such a poor economy - several blogs detailed its strong sales and earnings results.
"The reasons people were writing about Costco were different from the reasons they were writing about Walmart," said Chris Scully, VP, CARMA International, Inc. and author of the report. "It's a brand issue. For Walmart, a lot of the intensely negative blog posts we saw were people taking a political stance or writing about economic or community issues. The people writing about Costco were really talking about their visit to the store, and its offerings. It was more about individual shopping experience. Walmart had some of those stories, but a significant portion was unrelated to the shopping experience, which I think has a lot to do with the discrepancies in their performance in the study."
Discussion Question: How much are blogs now influencing a retailer's reputation? Are corporate issues (earnings, layoffs, labor/environment stances, etc.) playing a bigger role in establishing a retailer's reputation with the emergence of blogs? What can retailers do to improve their reputations in the blogosphere?