Ian Jindal

Leadership and transformation in multichannel retail and eCommerce

The Walpole Yearbook – article on Social Media

I recently contributed a piece to The Walpole Yearbook on Social Media. This is a publication reviewing the British luxury brands and the wider luxury market and I was pleased to be able to make a contribution. I’ve reproduced my article below since the original is in print only (and rather sumptuous, glossy print at that – as one would expect 😉 ).Here’s a copy of the article text:

Luxury retail is at the heart of a conversation, connecting products and service with a discerning clientele. Digital developments allow customers to initiate and sustain conversations amongst themselves without the permission, support or mediation of the brand.  Ian Jindal considers how and why the luxury sector might better engage with customers online and finds that the options have little to do with technology – rather a return to core values.

Social networks have always existed in luxury – just not in a digital form. Trunk shows and champagne evenings fêted select customers, and these exclusive events gained a wider circulation via key media titles.

‘Feedback’ outside these circles was limited to “letters to the editor”. Current web technology allows customers and readers (now interchangeable) to air their views directly– via comments, ratings and reviews, click-through sales or by creating their own blogs. This is the ‘social web’ – where customers can talk to each outside of the direct control of the brands they’re discussing.

It’s tempting to dismiss such customer feedback as irrelevant for the luxury sector: while it may be appropriate for commodities, surely a luxury brand needs no plebiscite!  As Tyler Brûlé, Editor in Chief of Monocle comments: “strong brands don’t win by consensus”. Brûlé’s challenge to brands is to lead, but not to ignore customers: feedback can improve a design, and early input (say on a prototype) from key influencers can improve a production model. For services in particular no amount of marketing hype can compare with sincere feedback from users.

Brûlé’s insight is resoundingly supported by recent research, specifically for the luxury sector. 71% of shoppers use reviews (Forrester), 91% of millionaires always or often check reviews before purchase (Advertising Age) and 84% of those earning $150k+ use  sites where customers review and rate products and services (Luxury Institute). Tellingly, 78% rank recommendation as the most credible form of advertising (Nielsen).

None of these findings will surprise luxury brands who will recognise in these findings the key components of “reputation” – favourable experienced amplified through repetition. The issue is that in 2009 many of the mechanisms used for amplification are tarnished or jaded – hence the interest in new tools.

Not your father’s old social media

It’s an easy misconception that to engage in social media a brand needs to have forums, ratings and blogs all enabled on their sites already. In reality, expert and experienced practitioners advocate a range of approaches, depending upon the brand’s position and their target customers’ behaviour.

One important tools is of course ‘Ratings and Reviews’, where customers can post their review of a product or service, along with a ‘star rating’. Justin Crandall, UK Managing Director of Bazaarvoice, the review system provider, notes that ratings are not a universal panacea. How can one be sure that customers are qualified to comment? How relevant are ‘star ratings’ to a complex luxury experience? Crandall cites their research into brand empathy as inspiring their new offering – “Stories”. These allow customers to relate a narrative experience with a brand or service. This echoes the use of editorial in magazines, allied to the power of the personal and specific. A trial last year with an upmarket, niche cosmetics brand found that 39% of all site visits started at a story, page views increased 81% and average order values increased 20%.

For luxury services in particular an amplified, inspiring experience is extremely powerful and resonates more than boilerplate marketing patter.
Crandall mentions other benefits of Stories, including improving Google ranking, understanding how your brand’s perceived, and identifying pockets of interest that might support a new store or retail operation. Relevant content can assist customers at every stage of the purchase consideration cycle.

DIY is not the only way

One does not have to manage social media tools oneself to benefit. Indeed, there’s a new category of retailers who are becoming ‘social intermediaries’. Companies like ThisNext.com have placed social network at the very heart of their business, rather than a bolt-on. In addition to the now-expected rating systems, ThisNext goes further by promoting style-setters and recommenders on their service, identifying them as “Mavens”, their place being secured by page views and click-throughs. Theirs is an empirical, modern take on a brand advocate or style-setter. Brands – whether on not sold via ThisNext – would do well to monitor the activities and recommendations of these Mavens. Asked about the importance of the ‘social’ aspects to their business, Jessyca Frederick, Director of Product Management at ThisNext comments that “social media, like every other marketing tool, has a purpose and a place within a well-balanced marketing campaign”.

All Customers Are Not Created Equal

As David Ogilvy noted some years ago, not all customers are equally profitable. Both Bazaarvoice and ThisNext offer brands, albeit in different ways, mechanisms to identify the segments or profiles of contributors and so respond appropriately.
Further selectivity comes from focusing one’s ‘social attention’ in places that chime with your brand’s values and form an ‘oasis’ at which your target customers congregate. One example is Suzanne Aaronson’s “Spire.com” which offers a distinctive, savvy perspective on luxury consumption with a surprising level of user-contributed insights and tips. Spire is in the tradition of insider, style-leading publications and so offers an opportunity to benefit from social media while remaining on familiar territory.

Rules of engagement

There’s no magic wand for social media – any more than there’s an instant answer to customer engagement in more traditional media. The key requirement is to develop and understanding an engage appropriately. Neither a blanket adoption nor wholesale rejection are likely to be successful.

The modes of engagement to consider are:

  • Awareness: monitor the more social activity of your retail channel or customer advocates and dedicate staff time to consider the implications for your brand and opportunities. Even though your responses may be via traditional publishing, marketing or retail channels you will at least be learning and gaining insights.
  • Engagement: use the platforms that others have built and contribute appropriately – whether adding information, posting comments or answering questions. If you’re minded to try direct social media tools then consider using them on a subset of your base as a trial – for example supporting a ‘VVIP’ group or around an event. Again, learning and experience are important outcomes.
  • Defensive: even if you choose to be inactive, do not ignore social media activity. Existing brand monitoring techniques and services should be used (from Google Alerts on key brand terms, to “buzz monitoring” services across all media). Social Media channels open new areas for protection, however, with many brands not in control of their terms on Twitter and as usernames. Consider the users “Prada” or “Chanel” on Twitter – not exactly as one might expect. Usernamecheck.com offers a free, instant check on 68 social media sites – if your brand is not registered yet then do so quickly. If it it, either congratulations or time to look up the name dispute resolution procedures!

Whether an advocate or sceptic, there’s no escaping the fact that our customers’ behaviour and expectations have changed as a result of new digital media. Commercial brand-owners will see these changes as an opportunity to connect afresh with consumers in the spirit of service and quality synonymous with the luxury market.