Social media sceptics need to revisit their thinking

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Brought to you by Retail Insider and K3 Retail

Retailers continue to grapple with social media. For every organisation that regards it as a distraction, there is one that fully embraces it and uses it as a key tool for engaging with customers.

The former camp will argue that it is it is difficult to put forward a business case for committing serious resources to social media because there are no easy metrics for calculating ROI (Return On Investment).

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Don’t be scared.

Maybe this is an old school view because others like AO World would argue that you don’t really need these measurements because social media should be seen as absolutely integral to a company’s overall brand.

For such companies there is a belief that engagement through social media channels ultimately brings its rewards through the lifetime of the customer. It’s not about quick hits, it’s more about the long game and engendering loyalty.

As these arguments rage it was interesting to see some research from Starcount – that has the two co-founders of Dunnhumby as directors and investors, which found a direct correlation between the success of the major supermarkets and an increase in their number of Twitter followers.

Over the Christmas period it analysed the seven large grocers – Aldi, Asda, Marks & Spencer, Morrison’s, Sainsbury’s, Tesco and Waitrose – and found a link between those that gained new followers and an increase in sales.

However, it was not simply about absolute numbers of followers but instead about analysing relevant clusters of these followers – namely, looking at the segment that has a ‘passion for food’ and the grouping that has a ‘passion for supermarkets’.

The Starcount data unearthed the finding that an increase in followers from these two segments resulted in an impressive festive period. Aldi had an 80% increase in such followers and it enjoyed a 13% uplift in sales. In contrast, Waitrose had a lesser increase in such followers of 39% and its sales decreased by 1.4%. Meanwhile M&S enjoyed an increase of 67% of foodie followers and this coincided with sales of food increasing by 0.4%.

Although these correlations could be regarded by sceptics as purely coincidental, the fact that they are supported by the Dunnhumby founders at Starcount suggests that there is plenty of credibility in these findings.

As such it is an interesting piece of evidence that adds to the argument that retailers who have not yet fully embraced social media maybe need to have a rethink about how they are engaging with their customers.

Glynn Davis, editor, Retail Insider

K3 Retail deliver multi-channel solutions that enable retailers to create joined up shopping experiences for their customers whether they choose to buy on-line, direct, in-store or via mobile. It has over 20 years’ experience delivering award winning solutions, to more than 175 internationally recognised retail brands.

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