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Blurring the Lines Between Stores and the Web

Call it the Holiday Retailing Death Match: Team Black Friday versus Team Cyber Monday. Brick-and-mortar versus e-commerce sales. Physical stores pitted against the power of the internet.

So goes conventional wisdom. But for anyone seeking a deeper and more accurate picture of peak-season retailing, it might be wise to retire those convenient media hooks.

The concept of Cyber Monday – the supposed post-Thanksgiving kickoff to internet purchases for the Christmas shopping season – has become less relevant than in years past. Consumers are blurring the lines between stores and the Web. They’re shopping for bargains earlier, beginning on Thanksgiving Day or even earlier. (Much to the chagrin, it should be added, of retail clerks who must leave their families on Thanksgiving Day to go to work.)

Retailers, meanwhile, are offering bargains on both channels, even encouraging online shoppers to pick up merchandise in the stores, rather than wait for home delivery.

They never gave that much weight to Cyber Monday anyway, according to Walter Delph, chief executive officer of the advertising technology firm Adly. He doesn’t discount the modern-day role of the internet –Adly specializes in celebrity endorsements for its clients’ products via social media. It began with celebrity tweeting, then morphed into a provider of multiple services for marketing via platforms such as Facebook and Twitter. But Delph believes the media is overly focused on the Web as a stand-alone marketing channel, in competition with brick-and-mortar stores.

He sees continuing growth in online sales, but predicts that retailers will draw less of a distinction between stores and the Web in their marketing efforts in years to come. They’ll embrace a variety of creative strategies that employ all channels, especially those utilizing mobile devices.

That said, social media played a bigger role in merchandising during the 2013 Christmas season than in prior years. Many retailers were just waking up to the possibilities of reaching consumers on the most popular social sites.

It was more than a question of drawing shoppers to a website. Shoppers saw greater use of techniques such as sweepstakes, contests and promotions with a strict deadline. Such strategies “can get an audience to pay attention immediately,” says Delph.

Much of the activity this time around took place on Facebook and Twitter, with Instagram also stepping up as an important marketing channel for Adly. “It’s growing so fast,” says Delph. “Consumers are really flocking to it.”

Pioneers in the use of social media for marketing included some of the nation’s largest retailers, Wal-Mart Stores, Inc. and Target Brands, Inc. among them. They used photos and even short videos to show off items they were hoping to push.

“It’s really about creating more of a visual experience,” says Delph. “The difference between social media and other platforms is the ability to have a conversation.” In the process, merchandisers can quickly discover what’s working, and what’s not.

We’re long past the point when marketers have to guess about the makeup of their audience. Thanks to the willingness of consumers – especially young people – to share their lives over the Web, retailers have access to intimate details about individual shoppers. Generic, non-targeted ads are becoming a thing of the past.

“The amount of data that we generate in social and digital media enables marketers to understand exactly how to reach consumers,” Delph says.

Of course, social media channels carry a substantial downside for retailers and branded merchandise. A poor shopping experience – stock-out, technical glitch, missed delivery, bad customer support – can trigger an exponentially negative response. It doesn’t take much for a screw-up to go viral on the Web – far less than for a product to catch on with consumers.

Even a good experience on social media can prove to be a liability for retailers, if it results in a flood of unanticipated demand. Every Christmas season seems to come with at least one story of a merchandiser who didn’t anticipate the runaway success of a particular item. For all the sophistication of retail marketing today, it hasn’t completely been integrated with the supply chain that’s supposed to support it.

Given the massive level of activity generated by social media, it’s something of a surprise that a handful of platforms is dominating cyberspace. One up-and-coming player, according to Delph, is Snapchat, a photo-messaging app. “The growth in the amount of images created on that platform is pretty startling,” he says. For the most part, though, the conversation is still controlled by Facebook, followed by five others – Twitter, LinkedIn, Google+, Pinterest and Tumblr – with more than 100 million unique monthly visitors.

The future will bring even tighter integration of social media with retailing, especially during peak seasons. (Delph notes that many smaller entities have yet to embrace the channel in a meaningful way.) Expect marketing strategies to grow even more complex and individualized, as merchandisers battle one another on all channels. And the term “Cyber Monday” will quietly fade away.

Comment on This Article

Displaying results 1 to 4 out of 4
 

Caleb

Wednesday, 05-03-14 11:23

Through social media and advertising through newer, more innovated channels, companies are now able to segment their customers into more specific target groups. They do not have to be clueless about what their customers are like since they now can see full well what it is their customer base is made up of. Consumers share very detailed and personal feelings or needs on their choice of social media giving companies the ability to know more precisely exactly what to provide for their consumers. This allows companies to be able to come up with better relating designs of new products as well as more accurate forecasts on products and thus saves them unnecessary overage costs. This will also save them money on advertising since they don't have to be so broad on who to target and can address their marketing directly to their segmented target. However, I agree and think that the biggest downfall of social media for companies is all the negative publicity that can be shared for others to see when a bad experience or defective product comes about. An actual example of this that I saw was when a college organization ordered over 20 boxes of pizza from Dominoes. When delivered, at least half of the boxes were smashed in and in bad condition, making the pizzas looked deformed and smudged. Later that night a member of the organization posted on Twitter saying "Dominoes not coming in clutch" with a picture of the smashed pizzas. In order to fix the problem and avoid bad publicity, Dominoes promised the member free pizza next time the organization had a similar large sized order (in order for everyone that saw the bashing tweet to see their company responses as well). Companies should just be aware of the negative effects of social media as well as the many benefits that it can bring.

 

Mariana

Tuesday, 04-03-14 10:49

As sales peak and social media plays an important role, retailers are struggling to meet the demand of the consumers. Forecasting demand with data and analysis is essential. However, it is important for the retailer to have a very good relationship with their supplier, to be able to meet demand. Establishing a good relationship means the supplier can be asked in peak times for more than what was ordered. Usually companies don't like to overstock, as it might come with a lose; therefore, the supplier should have low lead times, helping the retail restock in peak sales. The supplier should be very responsive and flexible in their production process. Being responsive and providing the best quality will help the retailer meet demand. Due to the impact social media is making the supplier needs to be integrated with the retailer.

 

Mariana Masso

Tuesday, 04-03-14 10:30

As sales peak, the challenge of having inventory on stock becomes a problem for many companies. Marketing and social media has caused many customers to be aware of many products and to get feedback on them. It is substantial for the retails to forecast, accurately using data and analysis. It is also important for the retailer to have a good relationship with their supplier, and to have a low lead time to be able to stock up inventory as soon as possible. Establishing a good relationship with the supplier enables the retailer to meet the demand of their customers. The supplier should be responsive to meeting demand and flexible to the wishes of the retailer. The product should be at the best quality and delivered on time. Therefore, with these new trends in social media creating impact on demand, retailers should have reliable suppliers that can meet their needs in peak sales.

 

Sadaf

Monday, 03-02-14 14:16

This article provides an interesting take on the pros and cons of using the internet for retailers. Though retailers who are adept at using the internet to promote their products may have an upper-hand, there are many challenges in using such an unstable source for both data analysis and forecasting. The challenge lies most in integrating social media trends into the supply chain and using these trends to forecast demand. The article mentions the unanticipated success of a particular item, and the potential viral impact of a company's mess-up. Additionally, the use of online retail can provide excess store-front costs, which companies like Amazon avoid and have the upper hand. All in all, though social media can help stores if used correctly, it is a rapidly changing and highly volatile data source and can be hard for companies to integrate.

 
 



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