How many times have you purchased something or scored a good deal and felt the immediate urge to announce it to all your family members and friends? or how many times have you sought opinion from your friends before buying something? Well, most of us do it all the time, albeit offline.
Thanks to Social Networking technology, now it is quite easy to connect online with not only family and friends, but with other like minded “strangers” (whom we wouldn’t know otherwise) and exchange information, opinion and views, such that it is visible to all in our network. In other words, sharing and exchange of information or opinion about products or services is truly social in nature.
Startups like Groupon have leveraged not only the innate urge of people to share information about good deals with family and friends using online social networks, but also the potential of Social Media for collaboration among “strangers” for group buying discounts.
Contrast this with the fact that established retailers, both online and brick & mortar, have been slow in embracing Social Media despite the realization that it has the potential to disrupt traditional retailing model (for more, see my earlier post titled How Social Media will disrupt the traditional “Retailing” Model). Most initiatives so far by retailers were limited to either offering social sharing options on their websites or limited shopping cart functionality on their Facebook page.
J.C. Penny, the Plano, Texas based retailing giant took a great stride in this direction by moving their entire product catalog to Facebook, meaning one can buy all their products from their Facebook page just as on their website (for more, see this and this). Imagine number of clicks or free publicity this is likely to generate through Facebook sharing. I expect other retailers to follow J.C. Penny’s example in this direction.
Retailing industry as a whole has suffered over the past few years because of global recession. One of the ways retailers can improve their performance and make up for lost opportunity is to start using technology in innovative ways leveraging full potential of social media, location based tools, smart phones with high speed internet access and social gaming. Only those retailers who are successful in this will see their sales and margin grow at the cost of retailers who are slow to adopt new technological tools. In other words, success of retailers will be determined by their effectiveness in using new tech tools such as Social Networking.
I want to end this post by sharing this CNN video from National Retail Federation’s annual event, the NRF 100th Annual Convention & Expo that concluded earlier today in New York. Note the emphasis on Social Media in this year’s event.
Enjoy the video and do share your thoughts and comments: