The social moment of truth
In recent years, brands have jumped on the social media bandwagon to further build their relationship with consumers. For fast moving consumer goods (FMCG) companies, it has been an opportunity to break away from the traditional power of retailers.
With the emergence of social media, it was thought that the retailer would be the main loser - brands would talk to their consumers directly and avoid the potential dilution of their communications.
However, retailers have strengthened their presence in social media in a practice that can be termed as ‘social private label relationship building’. While brands were busy building their presence, retailers were already counting their followers in the hundreds of thousands - and even tens of millions in Walmart’s case.
This has enabled retailers to further engage with consumers, shielding themselves from being removed from communication channels. They are now steadily heading towards domination of the social communication with consumers.
By dominating on social platforms, retailers will completely own the overall value chain, lessening the power of brands. The implications are as follows:
- Dilution of the brand’s communication with consumers.
- Dictating power on the retailer’s social platforms over brand selection and support.
- Social media platforms could become another ‘real-estate’ power similar to the physical store (retailers could start asking for high fees from brand owners for limited access to their social platform). This could be averted if this virtual channel is developed with the retailer in the current growing phase.
- Commoditisation of the social communication, devaluating the communications on brands’ social pages.
This would further blur the structure of social communications and the quantification of its effect on consumers. It will lead to difficulties in tracking consumers’ social media influenced buying decisions as information is based on an aggregate effect from the brand’s and retailer’s engagement strategies. It will also become difficult to assess the effect of a social campaign on consumers who are following both the brand and the retailer as the retailer could be promoting its own campaign.
On the retailer’s social page, the events and offers can extend from the physical store, focusing on driving store traffic, increasing the average basket size and repeat purchases. This will result in brands struggling on their social platforms due to the dictating power of the retailer and the jamming of the trade channel boundaries. This will compel brands to work with retailers to ensure that they are supported in conversations on social platforms.
Brands need to include social media as part of their trade marketing strategy and planning and focus on the ‘social moment of truth’ with consumers. The ‘social moment of truth’ is defined as the moment a consumer decides on a specific brand purchase based on their interaction with the social platform.
This leads to another form of integration between brands and retailers where consumer based go-to-market models are adopted into the social media realm and integrated marketing communication is focused on in the social retail environment.
Integration of retail social media through trade marketing would be based on:
- Horizontal integration of the retail channels’ strategies and communications.
- Increasing the awareness of the brand’s initiatives and customer specific plans.
- Integrated joint business planning with customers.
- Taking advantage of the fast developing trend of retail social media and be the first to exploit it.
- Leveraging social trade marketing to further improve the consumer based go-to-market models with retailers being part of one planning entity.
- Leverage the retailers’ followers in further endorsing the brand’s messages.
Social media platforms are proving that they can be a successful communication medium with consumers - whether directly linked with the brand or the retailer. To succeed in the ever changing social media landscape, there is a real need to leverage the social presence of retailers where the buying decision is actually being made.
Source: Research by Zahy Ramadan, Doctoral student at MBS