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Leveraging Social Media Analytics to Benefit the End Customer
Manoj Sharma
Founder & CEO-Forespire
Tuesday, October 1, 2013
The other day, my wife called me to pick up paneer on my way back from work. Usually, I do Indian food shopping at a specialty grocery store. This time, however, I stopped by at Costco and purchased paneer – and also rasmalai, stocked on the same shelf.
One out of every 75 people in California is an Indian, and most of them live in the Silicon Valley, so it may not strike you as very surprising that Costco, the 2nd largest retailer in the U.S, would stock paneer and rasmalai in its local stores.

However, Costco only recently started catering to local Indian preferences and till now left a lot of money on the table by not stocking such goods. What took it so long?

Generally, a company that wishes to introduce a product (such as paneer) in a new market through a retailer (such as Costco) would conduct surveys and focus groups to determine the viability of the business, and then make the proposal to the retailer. The retailer would verify through its own research and then the product would make it to the shelf. So, someone has to want to sell a product in a specific market first, and then the demand for it is verified (product first, then demand). This is backward – if Indians need paneer, Costco should learn about it and then seek companies that make paneer (demand first, then product). Those companies will gladly setup their side of the supply chain in order to meet this demand. Why is it not like that? How does one get to a more efficient process?
There is a new, already massive, and growing source of information that retailers can now harness to understand what people want and where they want it – social media.

This refers not only to well known services such as Facebook, Twitter, Youtube, Slideshare, Pinterest, Instagram and others, but also to communal information sources such as customer product ratings / reviews / comments, personal blogs, forums, special interest sites and public interesting formation such as search volume and trends. As an example, consider the search volume published by Google for paneer in the U.S, from 2006-2012. If Costco had seen this, they could have determined that search volume for paneer grown roughly 50 percent in the U.S, and California, New York, Seattle and Texas regions have the most interest. And by doing sentiment analysis on twitter (a technique used to determine public favorability towards a certain term), they would know that people absolutly love paneer. Going further, they could also determine that people who tweet about paneer are mostly Indians.

Another aspect of social information, not usually considered social is understanding competitive behavior through online content – in the case of Costco, it would be not only understanding what the other national retailers sell and how people perceive it, but also understanding the regional and local retailers (such as the Indian specialty grocery store) that operate at a much smaller scale but nevertheless compete with them for business. We should note, however, that the very fact that Costco did introduce paneer locally while other national retailers have not is a testament to their advance business acumen.

Retailers already use social media analytics. Typically, they use them to study reaction to new product introduction. For example, did people tweet favorably about the new perfume from Calvin Klein? How positive were the online customer reviews and their sentiments for J. K. Rowling’s new book? They also use them to react to and control Internet “flare-ups” – bad customer experience reports creating negative publicity. Companies, for example, issue apologies to customers and make amends by offering refunds or replacements on twitter so that others can notice. However, this is “inside-out” social engagement – taking an action and studying public response, or creating awareness about products or superior customer service. It is time for retailers to take their social story to the next level, and use social signals to find out what people want, and where they want it – that is, become more “outside-in”.

An example of a retailer that is doing so is Walmart. Among its many social media initiatives is “Get On the Shelf” – a program that gives entrepreneurs a chance to obtain Walmart’s distribution. Entrepreneurs create product concept profiles that include videos, and Walmart publishes them on their site http://getontheshelf.walmart.com. Users then review these product proposals and then vote for the ones they like. Behind the scenes, Walmart analyses demographic information on the people who vote. Bingo! In one swoop, not only does Walmart find out hot new products to stock, but also who wants it and where they live. And they help the entrepreneurs create a business in the process. If there is an example of socially driven retail business brilliance, this is it!

We all know that social media is transforming the way we interact with the world. The fact that we, as consumers, proactively convey our preferences, needs and desires socially creates tremendous new opportunities for retailers. The companies that react to this new wave transformatively will be the ones that have a chance of continued survival in the dog-eat-dog world of retail. I, for one, am waiting for the day when I could buy Toor Daal and Gram Flour at Safeway. Meanwhile, the local specialty store has my business.

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