June 30, 2011, 10:38 AM

Retailers recognize they’ve got a lot to learn about social media

Retailers say they’re missing out on consumer sentiment available in social media.

Lead Photo

Many retailers know they must reach beyond their web sites to engage consumers in social media. Even so, many feel they have yet to figure out how to leverage social media—which includes consumer-generated product reviews, online forums and social networks—to help them learn what consumers want and how they feel about retail brands, a new report from Retail Systems Research LLC says.

“Retailers recognize the value and potential value social media holds, but that its impact and best uses are yet to be determined,” says the report, which was written by RSR managing partners Brian Kilcourse and Steve Rowen.

Their report, “Social Media’s Impact on Customer Engagement,” covers the concerns and opportunities regarding social media cited by respondents in a survey of 111 retail personnel from retailers ranging from under $50 million to over $5 billion in annual sales.

The report also splits out responses from retailers segmented by their sales growth in 2010 over 2009. Those with the strongest growth (as indicated by double-digit percentage increases) cited the following as their top concerns regarding social media, with the percentage citing each concern:

● There is already a lot of social media dialogue about us that we are not a part of, 42%

● We are being judged by our online/social presence, 42%

● A web site is no longer enough, 42%

● We’re missing out on customer sentiment, 42%

● The effectiveness of traditional marketing channels is diminishing, 42%

● We find out too late when we’ve made a mistake with product, price, etc., 25%

● Our offer is being commoditized; we need to find new ways to add value, 25%

● Competition is beating us to it, 17%

● Customers know more about our value proposition than our employees do, 17%

● Customer loyalty is difficult to maintain, 8%

The same group of strong-growth retailers cited the following social media applications they believe offer the best opportunities to engage consumers, with the percentage of respondents citing each:

● Social network marketing, 67%

● Social applications such as widgets, Facebook applications, mobile apps, 67%

● Managed online customer communities, 67%

● Enabling question-and-answer relationships between interested shoppers and past purchasers, 60%

● Enabling customers to share products and reviews with friends, 60%

● Customer care through social networks such as Twitter and Facebook, 56%

● Brand ambassador programs, 56%

● Word-of-mouth and social media marketing, 50%

● Consumer advisory panels to share insight, exchange ideas, get consumer feedback, 44%

● Store interactions through social media channels, 33%

● Employee and partner training programs, 20%

The strong-growth retailers also cited the following as the top steps and goals they need to address to meet the challenges of social media, with the percentage of respondents citing each:

● More directed and intimate conversations with customers through social media engagement, 89%

● Identifying customer needs helps us develop new approaches to satisfying them, 89%

● Providing more ways for consumers to connect with each other through our brand, 80%

● Getting customers to engage more with us online, 80%

● The effectiveness of our product marketing and services is more important than ever, 80%

● Better insight into demand through customer sentiment analysis, 78%

● Social media provides a new medium to bolster sales, 78%

● Getting feedback from social channels is a new demand signal, 78%

● We want to influence shopper decisions, 70%

● We want to be seen as an authority, 70%

● Gathering customer reviews and suggestions shows we care and helps build loyalty, 60%

● Social media provides a new way to validate assortment, 56%

● We want the ability to create viral promotions/offerings, 50%

● We want to interact directly with current and potential customers, provide information, resolve grievances, 50%

● Reaching a mass audience through “quick hit” programs, 40%

● Manage the uncertain consumer demand is difficult to anticipate or plan for, 33%

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