Are consumers following retailers to social networks?
Kunz, Michelle B. ; Hackworth, Brittany A.
INTRODUCTION
The current economy poses many challenges for marketers and
retailers. A Yankelovich Partners study (2005) found almost sixty
percent of US customers find marketing to be irrelevant for them
personally, and seventy percent are interested in products and services
that would help block marketing attempts. Somewhat ironically, the same
study also found that customers respond more favorably to marketing when
they have control. Consumers are happier being a part of community,
rather than the target of a marketing campaign (Cocheo, 2009). Consumers
are more likely to buy something that is recommended to them, rather
than when it is "marketed" to them; this is even more likely
when the recommendation comes from someone that they trust.
Nielsen (2009) reported that global online video has grown 339%
since 2003 and time spent viewing has increased almost 2000% In addition
to the growth in the use of video, the number of online social media
users has grown 87% since 2003, and the time spent on these sites has
increased 883%. In the last year alone, (2008) time spent on social
networking sites increased 73%. A large percentage (85%) of social media
networking users want companies to interact with them using social media
applications (Nail, 2009). A 2006 comScore Media Metrix report (Trusov,
Bucklin, & Pauwels, 2009) indicated every second, online users in
the US had visited at least one of the top fifteen social networking
sites, and that approximately fifty social networking sites each had
more than one million registered users. In 2007 Oser and Adepiju
reported that 37 percent of the US adult internet population and 70
percent of teens used online social networking at least once per month.
Predictions show that the total US social networking audience will grow
to 105 million in 2011. According to Neilsen Online (2009) research, use
of social networks and blogs is now the fourth most popular online
category. Alex Burmaster, of Neilsen Online, stated "social
networking is not just growing rapidly, it's evolving in terms of a
broader audience, and compelling in functionality." One-third of
Internet users report comments by consumers provided on the social media
sites have been influential when they make a purchase decision,
(Deatsch, 2009a), but just 11% considered advertising to be as
effective. During the past year, almost half of Americans had consulted
social media while shopping, and more than one-third, (37%), had done so
in the past three months.
Based upon the usage rate and statistics, there is no question that
retailers are quickly incorporating the use of social networking sites
into their marketing communication strategy. The use of these sites
became even more advantageous as many retailers implemented the benefits
of the sites' applications during the holiday season in an effort
to generate revenue during this struggling economy. Many have recognized
that social networking is about linking people with common interests.
Companies such as American Eagle, Gap, Ice.com, Victoria's Secret,
Macy's and Nike have experimented and/or incorporated the use of
social networking, (Reda, 2008). The challenge for companies is learning
how to use social networks to the greatest benefit. Many retailers used
such social networking sites as Facebook.com, discussed later, to
utilize an application that the network labels "events".
Retailers such as JCPenney and Macy's, created events to encourage
customers to visit their online as well as brick-and-mortar sites in
order to take advantage of special promotions and sales during a
specified period of time.
Results of research conducted by a team of Fellows of the Society
for New Communication Research (Barnes, Cass, Getgood, Gillin, &
Goosieaux, 2008) found evidence to support the significance of social
networking to current promotional mix decisions. Consumers 25-55 years
old, college-educated, and earning $100,000 or more are among the most
savvy and sought after consumers. The same group is using social media
to research companies when making purchase decisions. While the economy
has changed the way consumers shop, and how they spend, what has not
changed is that consumers trust the opinions of friends and family, as
well as people they do not know, usually more than anything the retailer
has to say about the company or their products. Galeotti and Goyal
(2009) purport that companies who use social media networking see higher
sales and greater profits. Furthermore, Harridge-March and Quinton
(2009) suggest that not only does social media networking allow for
communications between consumers, but also allow retailers to develop a
relationship with their customers, and therefore reduce churn. According
to Mark Brohan (2009), while the economic downturn showed that online
retailers were not immune to slumping sales, online sales grew by only a
single digit rate last year. However, consumers remain loyal to online
shopping, and as such, social media marketing provides an opportunity
for retailers to develop a communication mix that is less costly, and
reach consumers via a channel they want. The challenge for retailers is
to identify how this digital word of mouth influences, as well as who
the influencers are.
SOCIAL MEDIA AND RETAIL MARKETING COMMUNICATION
Internet Retailer's 2009 Top 500 Guide (GettingSocial, 2009)
devoted an introduction to this year's report on the prevalence of
online retailers' participation and use of social media networks.
Approximately three-fourths of the Top 500 retailers had a presence on
at least one social network by early April 2009. Facebook was the most
popular, 57% participating; 41% having posted a video or commercial on
YouTube; 29% were on MySpace, while 20% were linked to followers in
Twitter. Finally, 10% were on the social shopping site, Kaboodle.
Facebook
Owyang (2008) reported that more than 120 million active users made
Facebook the fourth most-trafficked website in the world. It is visited
by 3 in 10 people monthly ("Two-thirds of the global online
population visit social networks and blogs," 2009) and has more
than 75 million members in more than 80 countries (Leader-Chivee,
Hamilton, & Cowan, 2008). Facebook reports that there are more than
28 million pieces of content (web links, news stories, blog posts,
notes, photos, etc) shared each month. With this level of activity, it
is no surprise that a recent study of social media ("Social Media
Study Shows 59 Percent of Retailers Now Using Facebook ", 2009)
found that up to 59% (59 of leading 100) of retailers are now using
Facebook through the use of fan pages. These retailers have recognized
the need to focus on what customers are looking for on a site, what the
company wants to communicate, and the role the fan page can play in
communicating their message. The actual number of retailers on Facebook
doubled in only five months (Wagner, 2009). The 2009 Internet
Retailer's Top 500 Guide shows that 56.8% of all retailers, or 284
companies, had a presence on the social networking site Facebook.com,
including 70 of the top 100 ("More than half of 2009 Top 500
e-retailers have a presence on Facebook," 2009).
Kaboodle
Kaboodle was launched in 2005 when Manish Chandra and his wife grew
frustrated trying to buy home improvement products (2009). Because they
believed shopping is a social process, the social shopping site Kaboodle
was developed, where consumers can find, recommend and share products,
sources for products, and other relative shopping experiences. As of
fall 2009, Kaboodle has over 14 million monthly visitors, and 900,000
registered users, who had added 10 million products to the site. In
mid-year 2006, Kaboodle simplified the process of adding products to the
website by creating an "Add to Kaboodle Wish List" button for
retailers to add to their respective web sites. Kaboodle launched a
holiday portal in 2008, Holiday Kit 'n Kaboodle (O'Grady,
2008). During the 2008 holiday season, Kaboodle boasted more than
260,000 vendors, and was considered one of the top 25 Networking media
companies.
MySpace
MySpace is a regular destination of approximately 55% of teens
(Maughan, 2007) and links 100 million users in more than 20 countries
(Leader-Chivee, et al., 2008). As more young people choose online
communication and social media, they want to share via text messaging,
email, and now social networks like MySpace, the things that are
important to them and their friends. According to Jeff Berman, (Newman,
2008) president of sales and marketing for MySpace, TJ Maxx and Target
have reached consumers effectively, based on an expressed interest in
fashion or a specific genre of music. These applications provided
increases of up to 300% when compared to standard demographic targeting.
Another example of company response to effectiveness of social media is
Wet Seal's addition of a community when it noticed 15% of its
traffic was coming directly from MySpace (Deatsch, 2009a).
While MySpace has been the largest social networking site with
regard to ad spending, things have changed drastically in the past few
months (Williamson, 2009). From October 2008 to March 2009, traffic fell
8%, to 70.1 million people, while Facebook's unique visitor numbers
grew 33%. Current indicators suggest Facebook is poised to replace
MySpace, however, demographic differences may be substantial enough on
MySpace for more targeted strategies to remain effective for some
retailers. By December 2009 ("MySpace Tumbles from the Top,"
2010), Facebook had garnered 47% of the social media market share, while
MySpace fell to just 18%.
Twitter
Twitter attracted 14 million unique visitors in March, 2009,
compared to only 1.1 million a year earlier (Deatsch, 2009b). This
social medium has exploded so quickly that online retailers have just
begun to consider how this medium could be used effectively to
communicate with millions of potential customers. The key to making
Twitter effective for a retailer is to get users to sign up and
"follow" the retailer. Retailers must learn how to entice
these followers by creating a 140-character statement that will be
displayed on the retailer's Twitter page. In order to make Twitter
a more successful tool for retailers, the website has introduced a guide
to doing business online (http://business.twitter.com/twitter101/).
Thus, updates on popular products, special sales or discount offers
might turn low volume Twitter traffic into a high-value communication
channel. For example, Delight.com reports a conversion rate 15% higher
than average, and order size that is 20% above average. This site had
100,000 unique monthly visitors generating about $1 million in sales
during 2008. Twitter Tweeters comprise about 8% of the US online
population (Bernoff, 2010), while another 4 percent are considered to be
lurkers. More importantly, a significant proportion (95%) of Tweeters
are members of other social networks such as Facebook. BestBuy has
established the Twelpforce for customer and technical support, not to
generate sales, and it is has been very effective to date.
Dell began using Twitter in March of 2007, and now has more than
11,000 followers. While most social network participation is about
brand-building, Dell has effectively used Twitter to generate sales and
revenue (Williamson, 2009). By using Twitter-only promotions, Dell
reports more than $1 million in sales over the past two years from the
network (Wagner, 2009). While the original intent was not to generate
immediate sales, this social network has proven to be a financial boost,
as well as providing Dell the opportunity to be part of consumer
conversations. Dell's strategy has been to be upfront about the
purpose of the Twitter account. It is important to get consumers'
interest before hitting them with marketing messages. Thus, it is
important to follow what is being said about the company. On Twitter,
they can offer consumers advice and generate good will, along with
generating publicity.
YouTube
Reda (2008) found YouTube participants to be engaged, capable of
influencing purchases of others, and seeking online opportunities that
offer rich entertaining experiences. Users of the social networking
sites actually control and determine what is the most popular. Jones
(Jones, 2009) found YouTube to have about 258 million users logging in
weekly. According to the YouTube site, the average user base is broad in
age range, 18-55, evenly divided between males and females, and spanning
all geographies. With such a large and diverse user base, YouTube offers
something for everyone (YouTube, 2009). Internet Retailer reports 41% of
top e-retailers have placed a video on YouTube or are mentioned in a
video posted by users ("More than half of 2009 Top 500 e-retailers
have a presence on Facebook," 2009). Sonia (Sonia, 2007) reported
online video through social media sites such as YouTube as the most used
social networking tool (65%).
PURPOSE OF RESEARCH
It seems that we are becoming a nation of social media users
(Patel, 2010), with 80% of online users reporting they had visited a
social site, and 59% calling themselves active social network users. The
search for information about new products, sales and discounts are the
primary reasons people follow brands, retailers, consumer packaged goods
and technology. Almost half (46%) of social media users had recommended
or talked about a product or brand on Facebook, and a similar number
(44%) had done so on Twitter (Palmer, 2009). A third of social media
users thought social networks were a good place to seek company and
product information. More than one fourth (27%) indicated they were
receptive to invitations to events, special offers or promotions
received through social media sites. Given the state of the economy
during late 2009, the researchers were particularly interested in
investigating just how successful retailers might be employing social
media marketing (SMM) in their marketing communication strategy, during
the all-important holiday season. Based upon the previous review of
literature and social media discussion, the following research questions
were developed:
1 What top retailers used social media during the Holiday 2009
season?
2 Which of the prominent social media networks did top retailers
employ during the Holiday 2009 season?
3 Which top retailers employed multiple social media networks in
their Holiday 2009 marketing activities?
4 Did multi-channel retailers use multiple social media networks?
5 Did the social media network employed by top retailers differ
based upon the merchandise category sold by the retailer?
6 Did top retailers increase activities or events on the social
media networks as the Holiday 2009 season progresses?
RESEARCH METHODOLOGY
Four sources of top-rated retailers were used to identify the
companies to review: Retailer's Top 500 Guide, Stores' Top
100, Hot 100 and Favorite 50 lists. The retailers that appeared on each
of these four lists included: Amazon Inc., Apple Inc., Barnes &
Noble.com, Best Buy Co., CVS Corporation, Dell Inc., Gap Inc. Direct,
Home Depot Inc., JCPenney Company, Staples Inc., Target Corporation, and
Wal-Mart.com. These 18 retailers were reviewed for participation on each
of the five social media networks. Five social media networks were
identified as the most prominent in the current retailing literature:
Facebook, Kaboodle, MySpace, Twitter, and YouTube. Means to measure the
degree of participation or consumer involvement with a retailer on each
of the social media networks varied across the different social media:
* Facebook included the number fans, discussions, notes, and events
* Kaboodle measures included fans, comments, products, and
promotions
* MySpace included friends and comments
* Twitter included followers and tweets
* YouTube measures included views and subscribers
Counts for each of the above measures were taken weekly from the
first week of September, 2009 through the first week of January 2010,
for each of the 18 retailers on the respective social networks where
they had presence.
RESULTS
All of the 18 retailers had a presence of Facebook. Only two,
JCPenney and Macy's participated on Kaboodle. Three retailers had a
presence on MySpace, Dell, Kohl's, and Lowe's. Best Buy, Dell,
Home Depot, JCPenney, QVC, Sears, Target, and Wal-Mart posted on
Twitter. Finally 10 of the 18 retailers had a presence on YouTube. These
were: Barnes & Noble, Home Depot, JCPenney, Lowe's,
Macy's, Neiman Marcus, QVC, Sears, Target, and Wal-Mart. (Table 1)
* Retailers present on only one social media network:
Facebook--Amazon, Apple, CVS, Gap, and Staples.
* Kaboodle: Macy's and JCPenney
* MySpace: Dell, Kohl's, and Lowe's
* Twitter: Best Buy, Dell, Home Depot, JCPenney, Lowe's,
Macy's, Neiman Marcus, QVC, Sears, Target, and Wal-Mart
* YouTube: Barnes & Noble, Home Depot, JCPenney, Lowe's,
Macy's, Neiman Marcus, QVC, Sears, Target, and Wal-Mart
Distribution across multiple social networks for individual
retailers:
* Dell: Facebook, MySpace, and Twitter
* Home Depot, QVC and Wal-Mart: Facebook, Twitter, and YouTube
* Macy's: Facebook, Kaboodle, and YouTube
* JCPenney: Facebook, Kaboodle, Twitter, and YouTube
Kaboodle
Only two of the eighteen retailers researched were active users of
Kaboodle: JCPenney and Macy's. The researchers expected to see an
increase in usage during the period tracked for the selected retailers
who utilized Kaboodle. The number of fans for each retailer ranged from
10,000 for JC Penney the first week, and almost 15,000 for Macy's,
to 17,000 the last week for JC Penney, and 21,400 for Macy's at the
conclusion of the review period. A positive percentage change was found
in the number of fans for each retailer during the time surveyed.
JCPenney increased the number of Kaboodle fans throughout the course of
the research by 71.5%, while Macy's noted an increase of 44.7%.
There was only one event, week 16, the week of Christmas, by JC Penney.
The number of products actually declined for JC Penney and remained
fairly constant for Macy's during the entire 18 week review period.
Only the future will tell if this social shopping network truly takes
hold with US retailers and shoppers alike. Table 2 shows the level of
activity for the two retailers on Kaboodle during the review period.
Overall, the lack of retailers present on Kaboodle precluded further
examination of this social network.
MySpace
The downward spiral of MySpace's popularity was evidenced in
data collected from MySpace activities. The researchers tracked such
MySpace elements as friends and friend comments. Only three of the
eighteen retailers had a presence on MySpace. As evidenced in Table 4,
Dell had garnered more than 10,000 fans on MySpace, while Lowe's
had approximate 1,200 fans, and Kohl's slightly less than 150 fans.
Other than Dell, these numbers would be of no significance in generating
significant sales impact. All the retailers saw a decrease in friends
and friend comments throughout the course of the study. Dell noted a
0.01% decrease in their amount of MySpace friends and a 3.8% decrease in
the number of friend comments. Kohl's Department Stores suffered
the same decrease in MySpace friends, by losing 4.1%. Lowe's saw a
5.6% decrease in MySpace friends and a 3.0% decrease in comments. These
results support the current literature indicating that MySpace is
falling out of favor with social networkers, and other social media are
taking hold in the market share. While there were only three of the
selected retailers with a presence on MySpace, it is also evident these
retailers were not attempting to build activity on this social network.
Table 3 provides individual data trends for these three retailers on
MySpace.
Twitter
Among the 18 retailers, seven had a presence on Twitter. Followers
and tweets were recorded weekly. From week-to-week, most of the
retailers saw an increase in both their followers and tweets as the 2009
holiday season neared. Significant differences in the number of
followers and tweets are evidenced across the retailers in Table 4. By
far, Dell stands out from the group with over 1 million followers.
However, the number of tweets for Dell was rather low, 6-800 during the
entire review period. This when compared to Home Depot, which in week 3
garnered 13,000+ followers, and tweets jumped to almost 2,500,
Dell's level of actual activity remained basically steady. Best Buy
and QVC showed increases in both followers and tweets as the holiday
season progressed. Best Buy showed 103.2% increase (from September to
January) in followers and a 68.9% increase in tweets. Best Buy employed
Twitter to promoted current sales and upcoming new product releases to
drive consumers to their online and brick-and-mortar sites. One
stand-out statistic is the 209% increase in tweets for QVC. JC Penney
posted a 149% increase in Twitter followers, and a 27% increase in
tweets. WalMart also showed a significant increase, 259% in followers
but tweets actually declined by 81%. More modest gains were demonstrated
by Sears with a 92% increase in followers and 58% increase in the number
of tweets.
YouTube
The researchers tracked each retailer's views and
subscriptions on their respective YouTube page. Of the 18 retailers
observed during the time span of September to January, ten utilized
YouTube in some manner. As presented in Table 5, the most substantial
increase was JCPenney as their views increased by 293% and subscribers
rose by 44.%. JCPenney took advantage of YouTube by posting videos to
promote special promotions such as their partnership with Rascal Flatts
and their American Living Unstoppable tour (American Living is a
JCPenney clothing brand line). The video reported on the surprise visit
of the popular country band to a New Jersey store location. Other videos
included promotions of new products, as well as style experts explaining
what is new and what is popular now. Macy's posted a 147% increase
in YouTube views, and an amazing 1225% increase in subscribers. This
substantial increase might be attributed to videos posted on Macy's
YouTube promoting their Believe campaign. Such videos included a 31
second clip that summarized the goals of Macy's popular Believe
campaign with a little girl making the trip from her home to her local
Macy's store to deposit her letter with the help of Queen Latifah.
The retailer also created and posted a caption under the video that
further explained Macy's support of the Make-a-Wish Foundation[R].
Macy's committed to donating $1 for every letter that was deposited
in Macy's Santa Mail, up to $1 million. This video alone received
5,918 views on Macy's YouTube site. It should be noted however, the
overall numbers for Macy's were quite small, when compared to other
retailers, as Macy's had less than 5,000 views and just slightly
more than 100 subscribers the final week of review. The actual numbers
of views for Home Depot, Lowe's and Sears were relatively
impressive--ranging from more than 200,000 to slightly less than half a
million. WalMart posted an impressive 17+ million views during the
period, and about 1,500 subscribers, both numbers remaining fairly
constant through the eighteen weeks. Tables 6A and 6B provide the raw
data numbers for each of the retailers on YouTube discussed, while Table
2 presents the percentage changes for each retailer on YouTube.
Facebook
The results of the research showed a positive percentage change for
each tracked month in the number of Facebook fans for all retailers
(Table 6). The four retailers with the greatest increase on Facebook
were: Neiman Marcus, 628% increase, Sears, 532% increase, Wal-Mart with
a fan increase of 556.8%, and CVS with a 495% change from September to
December. Three other retailers also showed relatively large percentage
changes during the review period: Macy's with a 320% increase,
Staples a 170% increase, Barnes and Noble with a 127% increase, Home
Depot an increase of almost 118%, and Dell with an increase of 112%.
Amazon, Apple, CVS, Gap and Staples employed only Facebook during
the review period. Amazon, Apple and Staples had no events, and minimal
discussions or notes. The Gap however, did engage consumers with events.
CVS and Staples showed large increases in fans, almost 500% for CVS and
170% for Staples, even though they posted no special events (Table 7).
CVS and friends took advantage of the discussions application of the CVS
Facebook fan page. Such discussions included topics that concerned
consumers. For example, one customer discussed her trouble with being
overcharged for an online order before Christmas. She reported that the
retailer had charged her debit card for the amount purchased four times.
When she called a customer service hotline, she was informed that this
had happened to nearly 2,000 other customers as well. These discussions
allow consumers the opportunity to "vent" or be heard, and it
allows the retailer to listen to customer concerns and to make changes
where necessary. All this leads to better customer satisfaction and a
better company-consumer relationship. Staples' Facebook page
includes many unique tabs that can be accessed by Staples' fans.
These tabs include an application called "I Shred U!", where
fans can upload pictures and virtually shred them. Other tabs include a
"News" tab that informs all fans of their newest products and
offers links to videos that shows the consumer how these products work.
Fans can also download their own "Easy Button[R]" (a trademark
of Staples) that will appear on their computer's desktop. The
"Extras" tab of the Staples Facebook page educates fans about
Staples programs, including EcoEasy (Staples effort to be
environmentally friendly by offering consumers a variety of
eco-preferable products and services--www.staples.com/ecoeasy) and
Staples Foundation for Learning[R] (a program that provides job skills
and educational opportunities for everyone, especially disadvantaged
youth--www.StaplesFoundation.org). These exclusive tabs give Staples an
advantage on Facebook and provide fans much more than the typical
retailer. This appears to be an effective means of segmenting and
targeting Facebook applications to be more relevant for consumers.
Furthermore, those merchants with greater than 100% increase in Facebook
included: Barnes & Noble, Dell, Home Depot, Macy's, Neiman
Marcus, QVC, Sears and WalMart. However, there is no correlation between
the number of events posted by the retailers, to the percentage increase
in the fan base. Barnes and Noble, Dell and Home Depot all had slightly
more than a 100% increase in fans. Macy's and QVC increased their
fan base more than 300%, and Neiman Marcus, Sears, and WalMart increased
by more than 500%. It appears apparel and multi-line retailers reaped
the benefits of increased fan base on Facebook.
Neiman Marcus also utilized their Facebook status by updating it on
a regular basis to inform customers of upcoming sales. On December 17,
2009, Neiman Marcus's status read,
"ONLINE ONLY through December 20. Save 25% off your online
purchase of four+ items from our Little Gems boutique. Click for details
and start saving now! http://www.neimanmarcus.com/fb/littlegems."
This status did a great job of directing customers to go to the
online site. Sears also used the status on their Facebook page to
communicate with their customers. Sears was very effective getting
customers to become involved on their Facebook page by posting a
question as their status and letting their customers to respond. This
will eventually help to create a strong relationship between Sears and
its customers, the prime object of social media networking for
retailers. On December 22, 2009 Sears' status read,
"You told us some of your favorite baked treats for Christmas,
we decided to offer you an easier way to make them! Today only, until
midnight, we're offering exclusively to our Facebook fans, a
Hamilton Beach stand mixer for the low price of $145.79. Check it out in
the Exclusives tab."
This offer to Facebook fans only demonstrated how Sears valued
their fans on Facebook. This entices more and more consumers to join the
retailer's fan page. The use of Facebook status for these three
retailers, is believed by the research to be the reason for the large
increases that were noticed in the population of fans on these
retailers' respective fan pages. In order to have a successful
Facebook page, retailers should take some advice from these retailers
and use their Facebook status to communicate with their customers and
create a strong relationship.
Wal-Mart's success can also be attributed to their use of
Facebook status. Wal-Mart updates their status frequently to let fans
know what is going on, and invite them to take advantage of upcoming
promotions. On December 23, 2009, Wal-Mart's status read,
"Look what fell out of Santa's sleigh - more holiday
savings! Whether you're looking for the perfect last-minute gift or
the makings of a delicious holiday meal, we've got you
covered."
Even though Wal-Mart is a huge corporation, it has learned how to
relate to consumers, as this status is extremely inviting and does a
great job of encouraging shoppers to use Wal-Mart for their holiday
needs. Customers have the ability to respond to this status by
commenting. Their December 23rd status generated 115 comments from
Wal-Mart's Facebook fans. Such comments included:
"Wal-Mart's prices are dropping all the time.." and
"... I wish they brought back layaway.."
Again these statements indicate that Wal-Mart was doing a good job
of reaching customers by updating their status. Clearly, Facebook is the
most popular social media platform for both retailers reviewed in this
study, and their respective consumer fans.
ANSWERS TO RESEARCH QUESTIONS
The purpose of this paper was to answer six questions posed by the
researchers. Now let us examine the answers to each of the reseach
questions posed in this paper.
Question 1: What top retailers used social media during the Holiday
2009 season? The answer to this question is that all of the eighteen
retailers identified participated in at least one social media network.
Question 2: Which of the prominent social media networks did top
retailers employ during the Holiday 2009 season? Primarily Facebook,
Twitter and YouTube. There was extremely limited use of MySpace (3
retailers) and Kaboodle (2 retailers).
Question 3: Which top retailers employed multiple social media
networks in their Holiday 2009 marketing activities? Barnes & Noble,
BestBuy, Dell, Home Depot, JC Penney, Kohl's, Lowe's,
Macy's, Neiman Marcus, QVC, Sears, Target and WalMart all employed
more than one social network. In other words, only five of the retailers
Amazon, Apple, CVS, Gap, and Staples used a single social network:
Facebook.
Question 4: Did multi-channel retailers use multiple social media
networks? The answer to this question is yes. Furthermore, Amazon, the
one online-only retailer was one of those using only Facebook.
Question 5: Did the social media network employed by top retailers
differ based upon the merchandise category sold by the retailer? The
answer is yes, but that is a qualified yes, in some cases. Only
department stores: JC Penney and Macy's participated on Kaboodle.
It also appears that department stores, discount stores, and home
improvement retailers were more likely to have a presence on YouTube.
Question 6: Did top retailers increase activities or events on the
social media networks as the Holiday 2009 season progresses? The answer
is again a qualified yes, for some of the retailers. Barnes & Noble,
Best Buy, Gap, Home Depot, JC Penney, Kohl's, and Macy's
showed an increase in the number of events they posted/held on Facebook.
Other social media data collected did not show an increase in the number
of promotional activities by the individual retailers, rather the
increases were in the number of consumers who signed in as fans,
followers, subscribers, or viewers on the individual retailers'
respective social networks. Results across the different social media
networks is presented in Table 7.
SUMMARY AND FUTURE RESEARCH SUGGESTIONS
To summarize these results and findings, it appears evident that as
the Holiday 2009 season progressed, consumers increased they
participation on social media, and for some retailers this appears to
have helped boost their seasonal sales. However, these top retailers
seemed to focus their attention on Facebook, with some activities on
YouTube. Facebook has been embraced by retailers and consumers alike.
Greater affinity, or familiarity with this social network may be why
both groups show higher levels of activity on Facebook. The less
familiar Kaboodle has yet to take hold with retailers and consumers
alike. Viral video of any kind lends itself to the YouTube platform, so
for any visually enhanced promotion, this network may be effective, but
not necessarily for everyone. The fact that Twitter limits the tweet
communication to 140 characters may not be the best medium for retail
promotions, but given the recent growth in Twitter's popularity,
that is yet to be determined. Twitter appears to have reached a plateau,
as recent reports (Quenqua, 2010) indicate that while new users are
signing up to Twitter, they are not active. More than three-fourths
(80%) have sent less than 10 tweets after they sign up to the social
network, and 40% have never sent a tweet.
This paper provides the statistics that were collected by the
researchers over a 3-month time span that investigated how and what
social media was employed by top retailers through the financially
important holiday season. The researchers believe that the results of
this study could be applied to future promotional programs, and to
refine effective market segmentation and target marketing tactics.
Clearly, more in-depth data must be collected to determine what
consumers think about and communicate regarding retailers, special
promotions and offers, as well as customer service performance. Future
research should analyze the content of consumer posts and comments, as
well as responsiveness to specific posts and promotions by retailers.
Use of new online analytic tools should also be employed to provide more
detailed statistics regarding specific social media networks and
individual retailer's promotional content. Several new measures
have recently been added to the arsenal of online metrics. One of those
is the Facebook Fashion Index ("New Index Ranks Facebook Fans'
Fashion Choices," 2010) by Stylophane. This index shows the daily
percentage increase or decrease in the number of fans for a particular
brand. This company also posts the Fashion Popularity Index, tracking
the most searched brands online ("Fashion Popularity Index,"
2010).
CONCLUSION
Successful retailers will continue to employ social media
marketing, and consumers are expected to be responsive. Online retail
sales were up during Holiday 2009, at the expense of brick-and-mortar
sales (Coremetrics, 2010). Much of the increase is attributed to early
pre-promotions for Black Friday and Cyber Monday specials. Terry
Lundgren, CEO of Macy's supports the importance of the online
channel for multi-channel retailers, since every $1 consumers spend
online, they spend $5.77 in store. Thus, it is important for
multi-channel retailers to use the Internet to attract new customers and
strengthen their relationship with consumers to get them into the store.
Social media marketing is a significant tool in the
relationship-building arsenal. Social media continued to grow during
2009, as reported by ComScore (Radwanick, 2010), with four of five
Internet users visiting a social networking site during December of
2009. Social networking now accounts for 11% of all time spent online in
the United States.
While social media was about developing engagement and buzz, many
retailers did not generate that many sales from SMM in 2009 (McDaniel,
2010). It is predicted that marketers will move away from just garnering
followers, fans, and tweeters, to generating sales via online social
media marketing strategies and tactics. There is a fine line or balance
in order to successfully entice online consumers, without making they
feel they are being "sold to" on the social network. To do
this successfully, new metrics will need to be used to determine the
appropriate segmentation strategies to deliver relevant promotions to
consumers. One advantage of SMM promotions is that they do not cost a
great deal of money for paid placements; rather it is simple and quick
to post a promotion on Facebook, Twitter, YouTube, etc. The key is to
then monitor not just the "buzz" of pass-along messages, but
to analyze the content of the discussion: what consumers liked,
disliked, etc. McDaniel suggests that consumer might be enthusiastic
about the price of a specific promotion, but then complain the shipping
and handling costs were too high. This type of information provides a
simply opportunity for the retailer to capture consumer sentiment and
adjust promotions.
Twitter may have been overrated (Wasserman, 2010) as evidenced by
the plateau of tweets for most brands and companies on the site. Rather,
interest by followers and tweets seems to be focused on celebrities,
rather than brands and companies. Twitter may be effective for mining
what conversations and tweets are saying about the brand, but it is not
terribly effective for marketing messages. While Dell and BestBuy have
used Twitter effectively to improve customer service and offer
especially hard-hitting deals and promotions, it appears that Twitter
may be more effective for up-and-coming brands/companies, rather than
well-established corporations.
Effective cross-channel promotions, such as those using email,
Facebook and Twitter are not easy. It is important to coordinate
cross-channel promotions (Henrich, 2010). Email and post on the Facebook
Wall, as well as posts on Twitter was not possible simultaneously.
Furthermore each medium requires different metric and analytic tools. An
even more complicating factor: different platforms often require
different software to post to individual social media networks.
Retailers will need to plan across promotions as well as channels to
effectively implement social media marketing programs that garner
consumer engagement and generate sales in the coming year. Effective
timing and coordination across multiple social network platforms and
other online and interactive media will be a challenge in the coming
year.
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Table 1: Distribution of participation across social networks
Retailer Facebook Kaboodle MySpace Twitter YouTube
Amazon X
Apple X
Barnes & X X
Noble
Best Buy X X
CVS X
Dell X X X
Gap X
Home Depot X X X
JC Penney X X X X
Kohls X X
Lowes X X X
Macys X X X
Neiman X X
Marcus
QVC X X X
Sears X X X
Staples X
Target X X
Wal-Mart X X
Table 2 Level of Activity for Kaboodle
JC Penney
Week Fans Comm Prod Promo
1 10,012
2 10,218
3 10,508
4 10,348
5 10,645 80 18,816 0
6 10,775 79 19,144 0
7 11,012 79 19,369 0
8 11,230 79 19,540 0
9 11,398 79 19,727 0
10 11,789 79 19,949 0
11 12,587 80 18,542 0
12 13,522 82 17,372 0
13 14,938 83 15,308 0
14 15,231 83 15,988 0
15 15,768 83 15,329 0
16 16,115 83 15,518 1
17 16,779 83 15,679 0
18 17,169 83 15,728 0
Macy's
Week Fans Comm Prod Promo
1 14,836
2 15,077
3 15,302
4 15,489
5 15,661 26 20,869 0
6 15,831 27 21,057 0
7 16,145 27 21,304 0
8 16,433 28 21,493 0
9 16,655 28 21,622 0
10 17,013 28 21,901 0
11 17,958 28 19,586 0
12 18,081 27 18,451 0
13 19,094 32 19,214 0
14 20,199 32 19,010 0
15 20,329 31 19,374 0
16 20,576 34 19,654 0
17 20,893 34 19,781 0
18 21,461 35 20,189 0
Table 3 Level of Activity on MySpace
Dell Kohls Lowes
Week Friends Comm Friends Comm Friends Comm
1 10,778 147 127 1,278 1,008
2 10,834 425 147 127 1,277 1,008
3 10,818 423 145 127 1,267 1,006
4 10,813 423 146 127 1,269 1,006
5 10,805 423 144 127 1,260 1,007
6 10,793 423 143 127 1,258 1,008
7 10,778 423 142 127 1,256 999
8 10,761 417 143 127 1,248 999
9 10,752 414 143 127 1,244 994
10 10,751 413 143 127 1,242 994
11 10,747 413 143 127 1,240 994
12 10,737 412 142 127 1,239 992
13 10,730 412 142 127 1,234 990
14 10,725 412 142 127 1,234 987
15 10,703 412 142 127 1,233 985
16 10,697 411 141 127 1,233 983
17 10,689 410 141 127 1,219 980
18 10,681 409 146 126 1,207 978
Table 4 Twitter Activity
Best Buy Dell Home Depot
Week Foll Tweets Foll Foll Tweets Foll
1 8,773 477 1,156,585 1,364 902 4,815
2 9,344 493 1,194,679 1,423 920 4,887
3 9,754 502 1,256,743 1,724 947 5,018
4 10,175 537 1,266,190 1,560 935 5,124
5 10,596 548 1,294,412 1,808 955 2,391
6 11,030 564 1,315,715 1,900 964 5,444
7 11,548 574 1,341,237 1,993 979 5,600
8 11,944 587 1,367,066 2,097 997 5,785
9 12,349 600 1,383,306 2,199 1,010 5,896
10 12,871 626 1,401,620 2,295 1,027 6,015
11 13,118 637 1,415,874 2,358 1,039 6,132
12 13,628 643 1,429,123 2,442 1,051 6,245
13 14,104 681 1,455,988 2,652 1,091 6,619
14 14,897 724 1,489,113 2,764 1,102 6,808
15 15,349 749 1,519,001 2,909 1,117 6,991
16 16,002 768 1,522,958 3,013 1,125 7,116
17 16,859 783 1,531,768 3,215 1,137 7,229
18 17,828 806 1,540,894 3,401 1,149 7,301
JC Penney QVC Sears
Week Tweets Foll Tweets Foll Tweets Tweets
1 697 2,170 215 2,323 2,822 680
2 862 2,170 215 2,345 2,940 685
3 891 2,259 221 2,361 2,941 699
4 976 2,340 238 2,431 2,941 715
5 241 2,391 241 2,560 3,010 735
6 1,073 2,459 244 4,082 374 752
7 1,119 2,529 247 4,097 375 761
8 1,186 2,593 250 4,183 375 779
9 1,238 2,646 250 4,284 395 784
10 1,320 2,768 256 4,491 404 789
11 1,389 2,910 269 5,601 436 791
12 1,449 3,122 280 6,783 458 794
13 1,636 3,398 309 7,322 471 798
14 1,860 3,510 319 7,570 487 801
15 1,902 3,766 322 7,839 492 804
16 1,978 3,897 327 8,120 503 808
17 2,037 4,014 334 8,208 516 812
18 2,152 4,177 339 8,333 525 815
WalMart
Week Foll Tweets
1 2,657 3
2 2,774 3
3 13,405 2,494
4 13,405 2,494
5 13,662 2,551
6 13,928 2,606
7 14,417 2,676
8 14,401 2,718
9 14,656 2,745
10 14,951 2,793
11 15,208 2,814
12 15,417 2,885
13 15,653 2,952
14 15,944 3,023
15 16,145 3,077
16 16,877 3,105
17 17,102 3,124
18 17,437 3,146
Table 5 YouTube Activity
Barnes & Noble Home Depot JC Penney
Week Views Subs Views Subs Views Subs
1 9,417 187 261,017 2,479 22,470 558
2 10,168 192 263,209 2,527 22,751 562
3 10,204 203 267,305 2,609 23,708 581
4 10,257 205 265,784 2,563 22,989 568
5 10,444 206 269,169 2,650 24,300 600
6 10,626 209 270,985 2,700 24,876 612
7 10,956 215 243,711 2,769 25,861 631
8 11,280 222 276,569 2,827 26,627 648
9 11,497 227 278,591 2,864 31,421 659
10 11,807 236 281,281 2,903 51,312 682
11 11,963 241 283,742 2,957 52,984 687
12 12,062 249 286,913 2,975 54,175 693
13 12,362 257 292,115 3,054 58,765 718
14 12,725 262 297,439 3,136 63,446 734
15 12,986 268 301,751 3,227 68,147 756
16 13,198 271 306,273 3,322 73,150 779
17 13,302 280 310,678 3,340 79,249 787
18 13,435 287 315,780 3,351 88,264 806
Lowes Macys Neiman Marcus
Week Views Subs Views Subs Views Subs
1 419,873 1,947 1,628 8 6,274 83
2 424,517 2,049 1,890 15 6,294 83
3 429,650 2,171 2,013 21 6,301 83
4 426,756 2,108 2,282 28 6,334 83
5 432,246 2,232 2,359 34 6,359 83
6 434,755 2,285 2,442 44 6,361 85
7 438,756 2,348 2,568 47 6,443 85
8 442,655 2,393 2,628 54 6,493 86
9 445,756 2,429 2,709 55 6,518 86
10 449,609 2,481 2,819 57 6,545 88
11 451,287 2,102 2,865 59 6,560 88
12 455,559 2,537 2,978 65 6,579 88
13 460,562 2,602 3,316 71 6,591 88
14 465,903 2,673 3,667 79 6,606 88
15 471,737 2,757 3,819 85 6,625 88
16 477,741 2,781 3,902 89 6,647 89
17 479,917 2,802 3,989 97 6,679 90
18 482,869 2,839 4,017 106 6,721 92
QVC Sears
Week Views Subs Views Subs
1 94,316 445 346,532 752
2 95,671 454 349,174 804
3 97,124 465 350,871 817
4 98,698 475 351,531 836
5 352,653 849 352,653 849
6 101,778 501 353,703 856
7 104,143 514 354,975 867
8 106,496 526 355,958 881
9 108,176 539 356,897 893
10 109,679 547 358,357 909
11 111,076 552 359,997 922
12 112,942 557 361,104 939
13 115,945 565 364,627 955
14 118,987 586 368,232 968
15 122,895 609 375,033 989
16 127,110 615 380,038 996
17 132,458 623 384,139 1010
18 137,087 630 386,990 1025
Target WalMart
Week Views Subs Views Subs
1 67,917 258 17,180,210 1,406
2 70,538 298 17,181,538 1,414
3 73,431 347 17,182,264 1,421
4 76,335 415 17,184,368 1,433
5 79,568 463 17,185,898 1,449
6 81,061 485 17,187,083 1,459
7 82,529 500 17,188,445 1,474
8 83,841 523 17,190,421 1,497
9 84,666 537 17,191,491 1,507
10 85,744 556 17,192,982 1,527
11 87,009 578 17,194,561 1,546
12 88,012 595 17,196,002 1,570
13 91,320 621 17,197,013 1,587
14 93,891 669 17,198,026 1,606
15 95,609 698 17,199,058 1,629
16 96,512 727 17,200,016 1,633
17 97,893 756 17,201,372 1,638
18 99,300 778 17,202,626 1,645
Table 6 Percentage Change from Week 1 to Week 18
Retailer FaceBook Kaboodle MS Twitter
Fans Fans Friends Followers
Amazon 26.70%
Apple 4.30%
Barnes & Noble 127.30%
BestBuy 36.50% 103.20%
CVS 495.10%
Dell 112.00% -0.50% 33.20%
Gap 27.00%
Home Depot 117.70% 27.60%
JC Penney 41.50% 71.00% 149%
Kohl's 28.40% 0.00%
Lowes 30.00% -5.60%
Macy's 320.70% 44.70%
NeimanMarcus 628.00%
QVC 304.80% 51.60%
Sears 531.80% 92.50%
Staples 169.50%
Target 38.10%
WalMart 556.80% 258.70%
Retailer Twitter YouTube YouTube
Tweets Views Subs
Amazon
Apple
Barnes & Noble 42.70% 53.50%
BestBuy 68.90%
CVS
Dell 19.90%
Gap
Home Depot 23.30% 21.00% 35.20%
JC Penney 27.40% 292.80% 44.40%
Kohl's
Lowes 15.00% 45.80%
Macy's 146.70% 1225.00%
NeimanMarcus 7.10% 10.80%
QVC 208.80% 45.30% 41.60%
Sears 57.70% 11.70% 36.30%
Staples
Target 46.20% 201.60%
WalMart -81.40% 0.13% 17.00%
Table 7 Percentage change for retailers only on Facebook
Amazon Apple
Week FBFans %Change FBFans %Change
1 15,558 1,377,557
2 15677 1,381,648
3 15734 1,385,675
4 15856 1.90% 1,388,285 0.80%
5 15959 1,390,836
6 16091 1,395,348
7 16290 1,397,490
8 16569 3.80% 1,399,974 0.60%
9 16824 1,402,716
10 17026 1,404,678
11 17321 1,406,794
12 17545 4.30% 1,408,563 0.40%
13 18337 1,411,418
14 18858 1,414,440
15 19003 1,417,491
16 19276 1,420,680
17 19513 6.40% 1,425,067 1.00%
18 19707 26.70% 1,436,369 4.30%
Gap Staples
Week FBFans FBFans %Change
1 395,678 28,528
2 428,057 28,963
3 434,179 28,858
4 462,361 28,883 1.20%
5 468,882 43,943
6 471,761 56,145
7 473,051 57,191
8 474,655 57,165 30.10%
9 476,173 57,141
10 477,741 57,914
11 479,182 58,241
12 482,992 59,159 3.50%
13 486,380 63,636
14 490,029 65,317
15 498,002 68,440
16 500,124 71,827
17 501,072 74,925 17.70%
18 502,641 76,886 169.50%
