Retailers who don't leverage social networking risk falling well behind the curve, says retail expert

Published 20th November 2009

Despite the fact that social networking websites are the Internet success story of the past 12 months; many retailers are eschewing a social networking strategy risk and risk consequently missing out on the biggest marketing opportunity in decades, according to Rajeev Gupta, retail consultant at MindTree, the global IT solutions company.

“Social networks will become the foundation for every online shopper and they are fast becoming the drivers of innovation among retailers,” says Gupta.

Enlightened retailers are building social commerce into their business model by creating conversations on various websites as they realise that a recommendation on a social networking site can be very powerful and the way in which many young consumers find out about them.

The start point, according to Gupta, is to first identify the right social media channel. Retailers should be analysing the various options such as Facebook, MySpace, Twitter, blogs, wikis etc to identify which ones are most visited or viewed by their own shopper community.

The ways retailers are starting to use social networking includes as a platform to communicate directly with customers. For example, Sears has launched a MySears community (www.mysears.com) to allow customers to share their experiences and product reviews thus creating a two-way dialogue between the retailer and its customers.

"Another innovation," says Gupta, "has seen retailers initiate alliances and partnerships with social networking sites to create brand awareness and increase website traffic." For exampe, a pharmacy chain has tied up with BzzScapes, a new social networking site specifically designed for discussions about brands. BzzScapes allows users to follow and interact with brands by creating "communities" and companies can respond back to consumers with pictures, comments, coupons and even private conversations.

MindTree’s retail expert Gupta also argues that social media also has a flip side to it as it can allow retailers to keep in touch with customers if it is facing controversy and needs to address issues in a speedy and effective manner.

“Social networking sites can offer information that advertising agencies can only dream about, says Gupta. "For example, Facebook knows where a person lives, who his/her friends are, what his/her interests are, where you go on holiday and which groups you belong to etc. From gathering this very transparent information, Retailers can target customers in a way that the world has never seen before.”