A few days ago Krystina Gustafson, an editor at CNBC, wrote a fascinating article on social media being used to predict revenue trends. This article was based on a study undertaken by Networked Insights, which monitors social conversations and determines customer satisfaction. What they found is a close correlation between customer’s comments on social media and retail revenues. While citing only one example, the following graph illustrates just how accurate their study was. The study was cond
ducted over a 15 month period and involved more than 500,000 entries.
“It found that as the online conversation about the retailer started to deteriorate – particularly surrounding customer loyalty – its same store sales, as reported by Goldman Sachs, moved in sympathy.”
This is powerful stuff. By monitoring social media retailers can pre-empt issues that may negatively impact turnover in the future.
The spinoff effect from this study is the importance of advertising on social media.
Not only that but the possibility that customers will be able to buy merchandise from Tweets. Both Twitter and Pinterest are looking closely at this.
Is this yet another challenge for bricks and mortar?
It all focuses on ease of use and time poor consumers. Forcing customers to do things they would rather not, has got to go. If the customer wants beer at the front of the bottle shop, give it to them. If they want the newspapers at the front of the newsagent, give it to them. Today’s customers are smart and know when they are being manipulated.
With yet another option to buy on line, it’s best not to irritate those who still visit your store.
Stuart Bennie is a retail consultant at Impact Retailing and can be contacted at stuart@impactretailing.com.au or 0414 631 702.
