Facebook isn't just for goofy pictures and silly chatter. Whether
shoppers know it or not, their actions online help dictate what's in
stores during this holiday season.
After polling customers on the
social media site, Macy's decided to carry denim jeans in bright neon
hues rather than pastels. Wal-Mart for the first time decided to let
customers vote on which toys they want discounted. And to better plan
orders for the decorative flags she sells, a small business owner in
Mississippi is running a contest that encourages customers to chime in
about how they're decorating their homes this winter.
of social media on a company's bottom line is tough to quantify, with no
hard data on how millions of Facebook fans and Twitter followers
translate into sales for stores. But during the holiday shopping season,
a roughly two-month period when retailers can make up to 40 percent of
their annual revenue, stores are uncovering a valuable use for all the
seemingly useless online muttering: market research.
The result is
that whenever folks press the "like" button to give their seal of
approval for a particular company's page or make a comment on how much
they like the leather boots they just bought, they're helping everyone
from independently-owned small shops to the nation's biggest retailers
make decisions about what products to stock up on, what to play up on
the sales floor and what promotions to offer online.
For the first
time this year, one of Macy's Inc.'s apparel buyers suggested the
company solicit feedback on Facebook on which colors it should stock for
"Else" brand jeans in the fall ahead of the holiday shopping season.
Several weeks later, with about 2,500 "likes" and 750 comments, "Very
Vivid" colors in bright blue, orange and red were declared the victor
over softer shades such as baby pink and baby blue.
which has more than 9 million "likes" on Facebook, followed up with
another poll in July on whether it should carry a "Kensie" brand dress
in a bird or floral print. About 4,000 people issued their verdicts
within 48 hours, and the department store plans to carry the floral
print this February.
Rather than simply using social media to tout
promotions and new products, companies are just now realizing the value
of making customers feel as though they're part of the decision making
process, said Jennifer Kasper, who heads digital media at Macy's. In
addition to making customers feel like insiders, she said it helps
businesses better tailor their offers as well.
Matt Cronin, a
founding partner of Web Liquid Group, a digital marketing agency, agreed
that companies are still in the early stages of figuring out how to put
their social media profiles to use. Until now, he noted that social
media strategies have primarily been about capturing as many followers
or fans as possible without really knowing where to go from there.
hurdle for major retailers is that it's difficult to take the
information they learn online and put it to use while the trends are
still relevant, said Nicolas Franchet, head of retail e-commerce at
That's one of the trickier aspects of Wal-Mart Store
Inc.'s new "Toyland Tuesday" contest, which lets fans vote on which of
two toys will be discounted on the following Tuesday. Once a winner is
declared on Thursday, the retailer acts quickly to inform its 4,000
stores of how to adjust pricing and displays, says Wanda Young, senior
director of social media for Wal-Mart, which has more than 25 million
likes on Facebook.
Although it's the first time Wal-Mart is
letting shoppers have a direct say in what merchandise gets discounted,
the retailer is learning to use social media in more discreet ways as
well. Last year, Wal-Mart, based in Bentonville, Ark., acquired an
analytics company called Kosmix that monitors online chatter to try and
predict what products might suddenly become popular.
The unit, now
called (at)Walmartlabs, suggested that the retailer give juicers
prominent display for the holidays last year, after a movie about an
obese man who lost weight on a juice diet started trending online.
Wal-Mart declined to give examples of how it used online chatter this
holiday season but said it's slowly playing a bigger role in product
That's critical because companies are realizing
shopping behavior is often more influenced by what's happening in pop
culture, rather than their own past shopping patterns, said Shernaz
Daver, a spokeswoman for (at)Walmartlabs.
"Social media has enabled us to understand intent," she said.
Vitale Shaw, owner of the two-store MeLinda's Fine Gifts in Picayune,
Miss., is using the same concepts as the world's biggest retailer. Since
setting up a Facebook page in 2010, she's used it as a sounding board
for what to stock in her stores.
In the south, for example, it's
common for people to change the decorative flags outside their homes
depending on the season or the holiday. To get a better sense of what
type of decorative flags might sell well next year, Vitale Shaw recently
asked fans to post about the designs they were currently flying, or
what they wished they were flying.
She was surprised to see
several comments about snowman flags, since it doesn't snow much in the
south. Even though Facebook sometimes proves her business instincts
wrong, she called the site "a true retailer's friend."
In a more
unusual case, the outdoor retailer Gander Mountain is handing the reins
over to fans on social media. The chain, based in St. Paul, Minn., is
running a promotion that lets customers determine the price of its
Every Thursday during the holiday season, customers can
push down the price on five selected items by sharing them on Facebook
or Twitter. The more shares an item gets, the lower the price goes;
discounts start at 10 percent but can go as high as 50 percent. Shoppers
can jump in and buy the items at any point, or wait for a lower
discount but risk that the store will run out of the items.
customer has to decide. Do I buy it at 25 percent off or do I risk that
Gander runs out of the jacket?" said Steve Uline, executive vice
president of marketing of Gander Mountain, which has more than 500,000
"likes" on Facebook. "It makes it interesting for the consumer."