Mandee Taps Social Networks To Acquire Customer Intelligence, Build Connections With Shoppers

Social networking is staking a claim in retail as a tool for branding, community building, and gathering customer intelligence. Tapping into the growing trend, Mandee is diving in headfirst to connect with shoppers on a more personal level. The ever present question of what consumers want can leave retailers scratching their heads. Voluntary surveys and consumer profiling typically focuses only on information relevant to the shopping experience. Harvesting the power of new media tools, Mandee is leaving it up to the consumer to get personal.

Mandee has managed to find ways of reaching their customers at every channel—mobile, in store, online and via multiple social networks. By using widgets, Mandee creates multiple surveys which plug into all of their social network pages (Facebook, MySpace, Twitter, MyYearbook, etc), to find out about customer preferences, such as favorite color to wear for spring and what world issue customers are most concerned about. Ultimately, this gives customers the ability to sound off on what’s important to them, but it’s also a great way to get deep, personal insight into the consumer mindset and put it to work for promotional and merchandising decisions.

“Facebook is becoming the main portal—30% of the US now uses as their home page of their browser,” says Bob Phibbs, Founder & President, The Retail Doctor. “Being on Facebook is a secondary market that helps with influence and intent. That is different than Google or the other searches which usually are used to buy at once. Friends telling friends or word of mouth can be cultivated quite easily online and for free. Any widget you can create to drive customers’ eyeballs to will be the future.”

Last week Mandee asked fans to share their thoughts on being able to buy the season's hottest trends in Plus Size if it were available on Mandee.com. Several fans “liked” the idea, giving thumbs up, but others said it would make them shop more, and advised the retailer to also bring plus size items into stores. Capitalizing on the social tone of Facebook, Mandee is using the comment string on the “wall” to get rich, nearly instant feedback directly from shoppers. But the key factor here is that shoppers are immersed in the social networking scene, so they don’t necessarily feel like they are giving out any information—they are just commenting on a “friend’s” page.

“Connecting a customer's online and social media activity to their real purchases should be the goal of any new media program,” says Ben Sprecher, Founder & President, Incentive Targeting, Inc, a firm specialized in targeted marketing. Although the usage of social media as a marketing tool can advance customer intelligence, Sprecher says the efforts have to influence shopper behavior for optimal results. “Without the shopper-level purchase data, you will never be able to tell if you are really changing shopper behavior. Even if you can get users to download and use your widgets, follow your Twitter feeds, forward your viral video ads, and ‘friend’ your Facebook page, you need to know whether all that activity translates into more purchases or not.”

“Both self-reported information in people's social networking profiles and the implicit interests they express through their online activity can be excellent ways to hone in on the individuals with whom you are most likely to make a sale,” says Sprecher. “And by using unique coupon codes, text message numbers, microsites, widgets, and other tracking tools, you can often trace the online activity directly to the resulting purchase.”

Reaping the Benefits—For Free!
Analysts agree that one of the biggest treasures in social networking for retailers is the simple fact that they are free. “Retailers have a great opportunity to tap into the millions of users on Twitter and Facebook, both of which are free utilities,” says Nancy Hill, Consultant with RealTime Communications, a strategic marketing firm. “Twitter offers many benefits - in addition to communicating online or in-store sales and promotions to followers, Twitter is a great way to monitor and track what people are saying about the brand. Some companies also use Twitter to address customer service issues and internal company communications. With Facebook, retailers can create groups or fan pages, which have significant viral marketing benefits—and Facebook is another channel companies can use to communicate news, promotions and other items of interest to constituents.”

Hill notes the shift in demographics for social networkers. “Many baby boomers are flocking to Facebook to keep up with their friends and families around the country and see the latest family photos. There are also many social networking sites being created that target a particular demographic or hobby, like sites for pet owners, gardeners, knitters, wine enthusiasts, etc. Companies that target a range of demographics can leverage these sites to their marketing advantage.”

Which Retailers Are Winning In The Blogosphere? New Research Tracks Consumer Generated Buzz

By Amanda Ferrante

Value retailers such as Costco and BJ’s Wholesale Club with reputations for selling quality merchandise at low prices are benefitting from positive buzz in the blogosphere. The two wholesales clubs received the most favorable Consumer Generated Media (CGM) coverage across the retail industry, according to the conclusions of a recent study from CARMA International, a global media analyst firm.

The study, “U.S. Retailers: Winners and Losers in the Blogosphere,” reflects research from a compilation of more than 3,700 blog posts and other consumer generated discussions about 17 of the largest US retailers in three sectors in the industry in the months of January and February. In contrast, traditional department stores (Macy’s and Sears) and mass merchants (Kmart) fared poorly.

Not surprisingly, another key quality of coverage was that the more a retailer was affected by today’s economic turmoil, the worse its coverage was. Macy’s exemplified this trend, as recurrent concentration on its poor earnings and store closings resulted in some of the worst coverage overall in the industry.

CGM coverage of the wholesale and club store sector was dominated by Costco, which appeared in 25.7% of all CGM reports analyzed, the second largest share of coverage behind retail giant Walmart (42.3% of posts analyzed). As a result of combining strong showing by share of coverage and its solid favorability performance, Costco by far has the best overall performance. It did, however, take second to BJ’s Wholesale Club in favorability.

Costco emerged along with Target to be the only two retailers that exceeded the industry’s share of voice and favorability averages. Overall, 89.6% of blog reporting on Costco focused on its offerings or visits to the store, with both receiving moderately favorable attention. 35% of stories consumers shared in the blogosphere were centered on Costco’s deliverability in the grocery sector, while 10.4% focused on the consumer electronics sector.

Quality, Not Quantity
Coverage of Walmart, which CARMA referred to as “the industry’s bright, shining financial light,” had a subpar overall performance, as it had frequent, but often negative, attention. Walmart received the most CGM reporting in the retail industry during the first two months of 2009, with more than 40% of stories analyzed mentioning the retailer. Due to its negative attention, however, Walmart’s overall rating was slightly unfavorable at 49.

“The more mentions a retailer gets they tend to be less substantive so it limits the ability to get good coverage,” says Chris Scully, VP, CARMA International, Inc. and author of the report. “Generally that’s the law companies run into, when they get a lot of coverage that at some point, they have favorability go down because instead of having a decent amount of in depth stories, they will have a lot more passing mentions. Costco avoided that…they got positive attention.”

Walmart has been called “evil” or “a shining example of American capitalism” in the blogosphere. Therefore, despite having a larger volume of favorable CGM reports (49 posts) than unfavorable CGM reports (43 posts), its overall favorability rating was 49. Although Walmart’s attention was negative overall, it did prevail as many posts noted the retailer excelling in such a poor economy—several blogs detailed its strong sales and earnings results.

“The reasons people were writing about Costco were different from the reasons they were writing about Walmart,” says Scully. “It’s a brand issue. For Walmart, a lot of the intensely negative blog posts we saw were people taking a political stance or writing about economic or community issues. The people writing about Costco were really talking about their visit to the store, and its offerings. It was more about individual shopping experience. Walmart had some of those stories, but a significant portion was unrelated to the shopping experience, which I think has a lot to do with the discrepancies in their performance in the study.”

Macy’s and Sears demonstrated the worst overall performances in CGM coverage –both retailers underperformed the industry average for coverage favorability while simultaneously seeing their volume of coverage exceeds the average. A large portion of negative attention highly visible across consumer generated media outlets is a worst case scenario for retailers, according to the report.

5% or more reports analyzed gave negative feedback on Macy’s, which gave the retailer a slightly unfavorable rating of 47. Macy’s was harmed by a considerable amount of reports focusing on its financial performance and store closings. Sears tied for the second worst favorability with a slightly favorable 48 rating. Qualms with Sears’ customer service were a main cause of its poor showing. Several of the posts analyzed showcased detailed complaints from consumers about their difficulty resolving problems with Sears.

The CARMA Favorability Rating System runs on a 0 to 10 scale, with 0 signifying the most unfavorable coverage possible; with 100 signifying the most favorable coverage possible; and with 50 signifying neutral coverage.

Expansion Of MyMacy’s Puts Promise Of Localized Assortments To The Test

By Amanda Ferrante
Macy’s recent announcement that they will be expanding the MyMacy’s initiative across the U.S. is shaping up as a high profile litmus test of whether offering store and merchandise assortments based on local customer needs and preferences can differentiate the department store enough to grab market share and increase sales.

Originally piloted in 20 selected geographic markets starting in spring 2008, Macy’s now plans to roll out nationally to new local markets. “My Macy's is primarily about tailoring merchandise assortments in each store to the customer who shops there -- making sure each Macy's store has the sizes, colors, brands, fabric weights, home goods, etc. that are right for the local customer,” says Jim Sluzewski, spokesperson for Macy’s. “It also applies to visual merchandising that supports the merchandise and enhances the customer's shopping experience.”

While positive customer feedback and positive same-store sales within the pilot were key to accelerating the expansion of the MyMacy’s program, Sluzewski pointed out that the company has been preparing to offered tailored assortments for some time. “My Macy's is possible because our company over the past few years built several new proprietary systems for allocating assortments and assorting stores more robustly by location. These systems are now fully in place and provide a platform for My Macy's,” he said.

In order to concentrate more management talent in local markets, all Macy's stores nationwide will be grouped into 69 geographic districts that will average 10-12 stores each, effective in the second quarter. Of those, 49 will be newly created districts. The other 20 districts (in the Midwest, Upper Midwest and Pacific Northwest) were created as pilots in spring 2008 and will remain in place.

The 69 Macy's districts will be grouped into eight regions that will be based in the Chicago, Houston, Miami, Los Angeles, New York, Pittsburgh, San Francisco and Washington, D.C. areas. Each region will include an organization of 35 to 40 executives to oversee merchandising, planning and various support operations. Special events and marketing public relations staffs also will be located regionally around the country.

In all, a total of approximately 1,200 new district and regional positions will be created in 2009 as the My Macy's model is rolled out to the 49 new districts nationwide.

Beyond the geographic assortments, Sluzewski added that a cross-channel strategy is also critical to Macy’s strategy moving forward. “Shopping across channels is a core strategy at Macy's and Bloomingdale's.The stores and Internet are very closely aligned,” he said. “For example, a customer going to macys.com can see if a particular item is currently in stock in their nearby stores. This feature is called ‘Find It In Store.’ We also have a feature called ‘Search and Send’ in which store associates can access macys.com from the POS registers and have merchandise shipped directly to the customer, if it's not available or in-stock in that particular store location.”

Macy’s anticipates the nationwide district structure to enable the company to develop and implement more effective strategies for identifying and serving specific consumer needs location by location. This is consistent with ongoing development of customer-centric business initiatives to leverage knowledge of customer segments to drive same-store sales, profitability and customer loyalty. Macy's is working in partnership with consumer insight firm dunnhumbyUSA on these initiatives under an exclusive arrangement announced in 2008.

In each of the 49 new districts, an average of about 23 new positions - primarily in district merchandising and planning - will be created at the local city level to help central planning and buying executives to understand and act on the needs of local customers. In addition, district-based executives, including a district vice president, district merchants, district planners and individual store managers, will be empowered to make more and better decisions for their local customers.

Loyalty Lab Branches Into CPG

By John Gaffney

Loyalty Lab is stretching out into the consumer packaged goods business. After bringing on-demand loyalty programs to retailers, the company announced this week that Loyalty Lab Link will provide a "substantial" update of its existing code management capabilities. Loyalty Lab generates unique codes to be distributed with products or at events. These codes allow marketers to link transactions or activities with customers down to the SKU and channel level.

For CPG companies it provides an acid test to measure the "bounce" that quick hit promotions or trade efforts give a product. It's a win for retailers, too. Instead of relying on trade promotion management systems, or anecdotal sales figures, the codes provide a common ground for CPG companies and retailers. So when that FSI drops on Sunday, sales on Monday won't be a mystery.

Oh yeah. There's this little matter of the economy, too.

"With the current state of the economy, the long-standing relationships between marketers, their channels and consumers have fundamentally changed." notes Loyalty Lab President Matt Howland. "Campaigns are pretty ineffective at creating long-term customer value, so our solutions let strong brands have a real stake in the consumer relationship. Our job is to make that happen swiftly and economically."

Strategies To Drive Spending, Customer Loyalty Take Center Stage At Marketing Conference

By Amanda Ferrante

Strategies to drive spending and increase customer loyalty took center stage at the recent Retail Advertising and Marketing Association (RAMA) 2009 conference in Las Vegas.

Go-forward strategies are clearly impacted by trends from the recent shopping season. In the session “Secrets of Driving Customer Response in a Challenging Market,” Robert Gordman, president of The Gordman Group, shared results of a recent National Shopping Behavior Study, which showed 50% of consumers gave more practical gifts; 30% gave more cash and 54% shopped closer to home. The study, which drew on insights from 815 consumers shared telephone interviews, showed that for the first time in the nine year history of the study, price became more important than selection as the reason why consumer shifted share of wallet to a different store.

Looking ahead to spending patterns this year, Gordman shared the results from a separate Shopping Intention Study, which indicated that 69% of all consumers plan to spend less in 2009. This drop in planned spending is expected despite the fact that 63% of consumers expect the economy to improve by the fourth quarter of 2009.

In another session at the conference titled “Boom and Bust: CRM as the Primary Tactic in Down Markets,” Amy Stevenson, AVP, customer marketing, Victoria’s Secret Stores, offered three key strategies Victoria’s Secret is employing now to optimize CRM and business during the recession, including:

1. Growing the database—this is the time to increase your share of voice (SOV). Stevenson suggested investing in building the customer file and adding new communication channels to garner more contacts. Victoria’s Secret is adding cell phone matching capabilities to identify more customers at POS.
2. Consider Alternative (less expensive) channels of delivery—Victoria’s Secret is planning to test inserts of their direct mail piece as FSIs in newspaper deliveries, as well as using concierges to deliver the CRM piece to high tourist areas. The retailer is also increasing the number of email contacts. to target high quantities of existing customers, including those not captured in the current CRM database.
3. Reward loyalty—For those customers who continue to be loyal and maintain their spending and trip frequency, it’s important to reward that behavior. Victoria’s Secret offered branded gifts valued at $40 each during the holiday season and saw significant increase in a 12 month period.

New IDC Research Shows Customer Centricity Tops Retail Priorities

Written by John Gaffney
First the good news: 75% of retailers believe customer-centricity is a “top three success factor” for 2009 and 80% of retailers expect an increased focus on consumer centricity this year, according to IDC’s new “The State of Customer Centricity” study. The reality check from the study, however, shows a gap in retailers’ ability to “walk the walk” on customer-centricity, as IDC found the limited availability of financial and human resources still blocks 37% of customer initiatives.

The study, sponsored by DemandTec and Precima, found that retailers need help with segmenting customers, identifying most profitable customers, and overall customer quality. The study found a significant difference between “high performers” and the rest of the pack when it comes to collecting the customer data that will inform key initiatives. The high performers use consumer insights more frequently in sales/merchandising (80%) compared to the norm (60%) and share data to strengthen trading partner relationships (53%) at double the average rate (24%).

“Customer-centricity can mean many different things to many different people,” says Leslie Hand, IDC Research Director, Global Retail Insights. “This study shows that the high performers have the clearest understanding of customer centricity, and the highest expectation from adopting it. They generally understand that customer-centricity will mean implementing the proper technology to produce good data and make good decisions from it.”

Hand’s comment begs the question: What do retailers mean by “customer-centric?” The report found that retailers want to make better decisions by cultivating and then disseminating customer data. Those decisions need to made on marketing, pricing, promotion, and space allotments. They measure success through increased sales (92% of respondents) total number of customers (92%) in-store promotional response (84%) and customer retention (84%).

Although it is not explicitly stated in the report, Hand expects technology to be a bridge between customer-centric expectation and execution for retailers. The key issues are finding the money for that technology and the personnel to manage it. “A lot of retailers are looking to host their own implementation, or at least outsource some of the technology as a way to offset capital requirements,” she says. “Most retailers can use store level customer data. They need to consider how they can synthesize different types of data inputs. They need to look at their ability to take data from suppliers, internal customer behavior, and market research and ask whether they’re able to do that on their own, or do they need to look for outside help.”

For the future, Hand is encouraged by the use of cross-channel data from many retailers. That data is improving customer experience through what she calls the “OmniChannel” approach that prioritizes consistent, seamless experiences for online and offline interactions, therefore raising the experience level for the entire brand. She also supports the personalized approach taken by retailers such as Best Buy and recently Macy’s.

“Retailer’s walk a fine line with customization because they don’t want to confuse or overcomplicate the customer experience,” she says. “Customization calls for different pricing structures and product assortments. It can really make the customers feel like the retailer understands them, but it will only work if it’s done right. For it to be done right, the technology has to be done right.”

Although the findings showed concerns about funding, Hand believed they were positive overall. That was echoed by Marc Dietz, vice president of marketing at DemandTec. ““This survey confirms that retailers and consumer products manufacturers have become more consumer-centric for several years and are serious about committing to this type of initiative,” he said. “ Given the difference between top-performing retailers and the rest of the pack, it is interesting to see the tremendous opportunity for additional investment and improvement.”

Sephora Glosses Up Mobile Web Offering With Debut of MobileVoice Reviews App

Written by John Gaffney
Mobile applications continuing to gain momentum in the retail sector as Sephora and Intuit recently debuted MobileVoice, a product review application from BazaarVoice specially designed to allow customers to access reviews at hosted mobile websites via product categories, keyword search and product pages. The new application will also provide mobile-specific analytics to retailers and suppliers.

“Everybody wants to do something with mobile,” says BazaarVoice CMO Sam Decker. “This application allows the voice of the customer to enter the store. It allows retailers to leverage their mobile ambitions as well as leverage their word-of-mouth initiatives.”

The BazaarVoice announcement taps into the mobile wave as well as the continuing concern with user generated content initiatives and capturing the voice of the customer (VOC). A report to be released in late January from the CMO Council shows that 2/3 of the companies it surveyed do not have a voice of customer program in place. Only 12.9% of companies have deployed real-time systems to collect, analyze and distribute customer feedback, according to the CMO Council data. With U.S. mobile adoption by all accounts now well north of 75%, and adoption of smartphones increase by 478% according to Gartner, MobileVoice is designed to provide a new avenue for VOC.

A leading pioneer in the area of cross channel retailing and also CRM initiatives, Sephora is trying to capitalize on the huge success it has had with customer reviews on its successful website. The leading beauty chain which sells through more than 515 stores in 14 countries, will post signage in all its locations encouraging customers to access the reviews at m.sephora.com, as well as promote the new initiative on its website.

“We wanted to reach the next level for ratings,” says Sephora SVP Julie Bornstein. “It is just the perfect category for us and we’ve had wild success with them. We believe our clients will love to have the added technology in the store and it will increase the voice of customer to a new level.”

Bornstein is justifiably enthusiastic. Sephora’s launch with BazaarVoice generated more than 100,000 reviews within days. Many Sephora products have been reviewed by more than 1,000 customers. The company’s average product rating is 4.5 out of five. She also said suppliers and internal executives gain a tremendous amount of knowledge from reading individual product reviews, as well as aggregate data.

Intuit launched mobile reviews for its Turbo Tax product at m.turbotax.com on December 26th, 2008. The software giant’s rollout spotlights the opportunity for mobile reviews to benefit both suppliers and retailers, Intuit plans to promote its mobile reviews via in-store signage at retailer chains such as Staples, Office Depot, OfficeMax, Wal-Mart and Best Buy.

Although Sephora and Intuit are the first to debut MobileVoice, BazzarVoice’s Decker says new functionality is already being explored. For example, it is possible to integrate quick response codes into the MobileVoice platform, which automatically present anything from like product reviews to like product pictures. He also believes iPhone applications, which saw light from Amazon and Target last Christmas, could easily include reviews.
“There’s a lot of practicality here,” he says. “The data generated will help supply-retail relationships and I believe it will also enable cross-channel behavior from customers. And if you have to compete with someone who has mobile capacity, I believe you either have to get your own or suffer a disadvantage.”