This is Part II of Retail TouchPoints’ multi-part feature investigating trends and developments in social media analytics and the business intelligence the technique provides. This segment focuses on insights from several leading retailers, based on their current, real-world social media analytics applications. It also includes a supplier-provided overview of basic analytics techniques. Starting with RTP’s June 12 newsletter, subsequent installments will reveal similar insights from other suppliers and retail leaders.
Social media marketing isn’t new, but the sophisticated analytical tools that reveal — from online conversations — what customers need, want and feel are becoming more granular and competitively necessary every day. From simple monitoring to retailers’ full-scale, co-created dialogue with brand advocates across social channels, the power of these solutions is transforming those who use it wisely from retailers to Me-Tailers.
“There is a treasure trove of useful information hidden in the hundreds of millions of social media conversations occurring online every day,” Tracy Chu, head of Walmart’s social media analytics efforts, told Retail TouchPoints. “Retailers who know how to listen to and gauge these conversations will get ahead of consumer trends in planning their product assortments, including new products to introduce and supply to secure.”
Chu said social media analytics helps retailers "know what they don't know." By listening intelligently to the collective social media conversation, “retailers can identify unexpected consumer trends, such as new products that are gaining traction; renewed demand in existing products, sparked by recent events; and even geographical interest developments. Trend discovery requires specialized social media data mining technology and a rich history of events and products to interpret these social media patterns,” Chu reported.
Monitor And Profile For Customer-Centric Decisions
Today’s approach to social analytics can be divided into two basic camps: monitoring ? listening to what’s being said; and profiling ? understanding who is saying it.
David Dorf, Senior Director of Technology Strategy for Oracle, provided this graphic to better illustrate the breakdown:
Monitoring tools comb social sites for key words including brand name, product, competition, sentiment and more. Marketing efforts can be gauged based on reactions to a recent sale, store opening, gift card promotion, product by region and other Key Performance Indicators (KPIs), as well as to recent customer service events ? all leveraged to turn casual shoppers into loyal ones.
While listening-in on social media has become fairly standard, profiling is in its infancy, according to Dorf, and is the key emerging trend for obtaining more granular consumer data for executing customer-centric product/brand decisions.
Profiling software reveals consumers’ psychographics ? their activities, interests and opinions ? as well as a brand’s influencers, or those with active, influential posts and reviews generating a strong following. “If I know from my analytics that Mary Ellen is an equestrian with many followers also interested in horses and who value her opinions, then Mary Ellen is a valuable brand influencer,” Dorf explained. “Rather than target my riding boots promotions randomly, I will target Mary Ellen, who pushes the promotions out to her like-minded friends and followers, making my marketing dollars much more effective.”
Once brand influencers are identified, rewarding them with points, coupons and more for posting or tweeting positively about the brand stimulates their posting activity and results in viral marketing, during which advocates are further amplified.
Crowdsourcing inspires ideation, the concept of encouraging ideas and productive criticisms from one’s best customers. Dorf pointed to Starbucks as a prime example: the coffee merchant actively collects and evaluates consumers’ social media comments and suggestions to improve its business ? such as the popular sleeve that surrounds its cups, ideation from customer feedback.
Smarter, customer-centric decisions regarding assortment, allocation and myriad other strategies are the end result of social media analytics.
“The vendor market for these tools had been characterized by the start-ups, but in the last 12 months, several larger, established tech companies such as IBM, Oracle, SAP, SAS and others have come out with more integrated and powerful drill-down solutions,” reported Dorf. “When the big guys get on board, it’s clear there will be ROI.”
Ice.com Optimizes Post Content
Ice.com, an online retailer of fine jewelry, uses several analytical approaches and tools, depending on its marketing goals and objectives. These tools include Google Analytics and its Social Reports features and Facebook Insights. It also includes third-party influence ranking tools such as Klout. Klout measures a user’s influence across his or her social networks and applies a Klout Score reflecting that influence.
“We constantly are tracking influence, reach, engagement and conversion results in our social initiatives to optimize towards understanding how to better target and fuse with our community members and their own social connections,” said Dave Haber, Senior Director of Social Media for Ice.com.
“Whether we’re analyzing the time at which we post or the type of content and creative execution, we always seem to be discovering something new,” he reported. “Among the things we’ve learned through social media analytics is to optimize our post content to include the specific copy and formatting that elicits the most engagement. We’ve also learned which specific types of content and creative are best suited for generating specific types of engagement; these insights give us better levers for generating either clicks, Likes, comments, replies or sharing.”
Haber remarked that measuring the success and efficiency of Ice.com’s social media marketing depends on what the company is trying to accomplish and the tactics deployed to reach those goals. But with any of its social initiatives, “we always start by clearly defining our marketing goals and objectives, and precisely identifying the key performance indicators that we’ll use to gauge success. If our entire team is aligned on those details, and we’re all watching the same ‘success meter,’ then social media analytics isn’t really that much different than any other form of web metrics.”
PacSun Gets the Touch Points It Needs
At Pacific Sunwear, monitoring, drill-downs to channel and key words, sentiment analyses, profiling, influencer identification and two-way dialogue “give me the touch points I need to provide details to our e-Commerce and marketing teams about what’s really happening in this massive internet space,” Michael Frank, Social Media Strategist at PacSun, told Retail TouchPoints. “Without analytics, campaign results are very abstract: we would not know where conversations are happening, where consumers are spending the most time, what they’re talking about, and their posting frequency. These benefits alone are worth the investment in analytics.”
PacSun has advanced its social media maturity to tapping wisdom from its most valued, target audiences. “Analytics helps us determine our key social media influencers ? through posts, user-generated YouTube videos and more ? then respond to discuss, if necessary,” noted Frank. “We can also apply consumer input and advice to quick and targeted social media marketing.”
Frank added that among the benefits of the company’s analytics tool ? Radian6 from Salesforce.com ? PacSun can see real-time responses to its advertising commercials ? while they are airing. The Radian6 solution applies metrics, measurement, sentiment and analytics reporting to help organizations understand and gain insights about social media.
Radian6 helps control even a single user’s negative sentiments before they go viral. For example, Frank explained: “After detecting a specific complaint on Facebook, I was able to reach out to the customer directly, solve the problem and put a lid on the grievance before it spiraled out of control. When people are frustrated, social media is the first place they go,” he stated, “so it’s easy to see how customer service will become a bigger part of the social analytics framework.”
PacSun “still has a way to go with all this, mostly due to time and resources,” Frank noted. “I am the only one dedicated to social, but hopefully someday we will have a community manager on board so we can extract all the rich data that Radian6 offers.”
The value of social media analytics going forward, both at PacSun and within the retail industry, according to Frank, “is making the consumer-to-brand relationship as strong as possible ? that’s what every retailer wants.”
Part III of Retail TouchPoints’ Social Media Analytics update will appear in the June 12 newsletter.
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