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Trend Watch: Social Media

May 9, 2011
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Social media is changing how consumers interact with brands and retailers. That spells a huge opportunity for retailers to incorporate a social media strategy into their private label marketing.
More and more food retailers are actively embracing social media and using it to connect with customers and share information about products.


Social media is changing how consumers interact with brands and retailers. That spells a huge opportunity for retailers to incorporate a social media strategy into their private label marketing.
More and more food retailers are actively embracing social media and using it to connect with customers and share information about products. Supermarkets, specifically, are using social media to promote in-store events such as cooking classes, announce new products, offer discounts and promote budget or healthy-living initiatives. Because social media is instantaneous, retailers can put their brands out there and receive immediate feedback. Extending such efforts to private label promotions should become part of the marketing arsenal retailers increasingly are using to increase private label sales.
 
DETERMINING THE ROLE

The first thing retailers need to determine is what the role of social media should be for their private label brands.

“I think the first question you have to honestly ask yourself is, what does your store brand stand for, if anything,” says Paula Rosenblum, managing partner of Miami, Fla.-based Retail Systems Research (RSR). “If your private brand doesn’t have a lot of street cred, perhaps you can use social media to improve that reputation.”

“It is key for retailers to listen, meaning mining conversation about their brand so they can use this as a form of marketing research about what people really think,” says Joel Rubinson, president of New York-based marketing research firm Rubinson Partners, Inc. “Are consumers viewing your store and your store brand functionally, or are they talking about them more emotionally?”
 
TRICKY, TRICKY

It’s also important for retailers to figure out how their customers are using social media in order to engage them and build a connection to their private brands.

“There is an emerging market of analytics that can help retailers determine customer sentiment around their brand, the national brands they sell and the private label brands they are also selling,” says Rosenblum. “I think this is far more important than hiring interns to just find and eliminate the squeaky wheels of unhappy customers.”

Not everyone uses social media the same way, so trying to get customers to talk about private brands on social networks can be tricky, says Chris Douglas, interactive creative director of St. Louis, Mo.-based marketing firm Schupp Company, Inc.

“It’s important to remember how social networking works,” he says. “Social media is not much different than a modern day sewing circle. It’s a space in which groups of like-minded people hang out and converse. Just like any other conversation, consumers are engaged at various levels; some people like to participate and be heard, while others are just there to listen.”

Retailers need to define their customers’ level of involvement and where they spend their time online. Understanding this will allow them to find their access into a conversation with them.

For example, that access may come through a popular blogger whose angle is being budget-conscious. Some of the blogger’s readers, in turn, push out the article because it’s relevant to their lifestyle and they are looked to for advice by friends in their social media channels.
 
Other key things retailers can do with social media to help sell more private label include:
 
• Monitor interaction between their customers and brands to see if there are PL product offerings that are missing or price points that branded products are missing
• Allow customers to submit online product reviews
• Create contests or other interactive promotions
• Remember that private label brands are still brands and they have their own story to tell.
 
MAKING THE CONNECTION

Social media provides a way for retailers to have a direct conversation with their customers; however, many retailers have yet to realize its full potential.

“This year alone, companies such as Walmart, CVS, Walgreens, Spartan and Safeway had major private label launches, and I couldn’t find information on any of those launches in the social media environment,” says Steven Howell, managing director of The Austin Clark Group, an Alpharetta, Ga.-based consulting firm. “This tells me that all of these retailers are using social media to promote their stores in general, but not when it comes to their own brands. I think this is a great way for them to get their message out about these new products they just came out with.”

Retailers that have had success on the social media front include Whole Foods, Fresh & Easy and Trader Joe’s.

“Trader Joe’s allows its followers/fans to perform their own product reviews, share recipes, converse and participate in contests,” says Douglas. “Whole Foods does the same. Most of the product conversations revolve around their own private label products.”

Fresh & Easy has done a good job reaching out to its customers via Twitter, says Rosenblum.
 
WHAT’S TO COME?

Social media is and will continue to change how consumers interact with store brands and retailers. “Consumers will be able to interact with a brand or retailer on both a digital and physical level,” says Schupp’s Douglas. “Imagine being able to split up your shopping list with your kids and as they wander through the store retrieving items, they are checked off the digital list on your smart phone. Or as you enter the store, your smart phone detects your location and instantly shows you where your list items are on a map of the store with product reviews of each of the items, the possibilities are endless.” PLB
 

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