In the past few years, brands jumped on the social media bandwagon to further build their relationship with consumers. For fast moving consumer goods (FMCG) companies, this was an opportunity to break away from the traditional power of retailers. With the advent of social media, it was thought that the middle-man will be the main loser as brands will be talking directly to their consumers where they will be able to showcase their often bypassed equities thoroughly.
Nevertheless, these same retailers had strengthened their presence in social media with shoppers in what can be termed as a social private label relationship building practice. Indeed, while brands were busy building their presence on social networking sites, retailers were already counting in the hundreds of thousands and even tens of millions – in Walmart’s case – of followers there. Through this, retailers increased their social presence and engaged further with their shoppers, shielding themselves from being obsolete or removed from the communication with consumers.
With this, retailers are currently steadily headed to dominating the social platform’s communication with shoppers. With a dominating power on the social platform, retailers would completely own the overall value chain which would lessen the brands’ power. The implications are listed as per the following points:
1. Owning the full value chain and diluting the overall brand’s communication with consumers.
2. Dictating power over brand selection and support in the retailer’s social page.
3. Online social media could become another “real-estate” power as in the physical store (i.e. retailers could start asking for high budgets to give a limited access to brand owners to their social platform). This could be averted if this virtual channel is developed with the retailer in its current nascent phase.
4. Commoditization of the social communication which would devaluate the communication happening in the brands’ social pages.
This will blur even further the structure of the social communication and the quantification of its effect on consumers. Companies would not be able to track shoppers’ buying decisions that were influenced through social media, as it would be based on an aggregate effect from the brand’s and retailer’s engagement strategies. Through this, it will become very difficult to assess the effect from a social campaign on consumers who are following or “liking” both the brand and the retailer, whereby the retailer could be promoting another campaign on its own.
In the retailer’s social page, the events and offers are extended from the physical store to achieve further reach. As retailers are focused on driving store traffic, increasing shoppers’ average basket size, and repeat purchases (store loyalty), brands will struggle again on the online social platform with the dictating power of the retailer and the jamming of the trade channels boundaries. With this, brands are compelled once again in this social dimension to work with retailers to make sure they are supported and driven in the conversation.
Today, retailers are building heavily their social presence to increase their own social distribution as a white space reach extension of their physical shelves. To face this emerging disruption on the online social platform, brands would have to integrate it as part of their trade marketing strategy and planning. Through this, brand owners and marketers should start focusing on the social moment of truth with shoppers. The Social Moment of Truth would be defined as being the moment the shopper decides on a specific brand purchase based on a set of determining factors in the social network encounter. This encounter is formed on the retailers’ pages in social networking sites where they become the arena where shoppers’ buying decisions are being influenced.
This will lead to another form of integration between brands and retailers where shoppers’ based design toolkits are adopted into the social media realm and integrated marketing communication is first and foremost focused on in the retail (social) environment. The scope of the retail social media integration through trade marketing would be based on the following key points:
1. Horizontal integration of the retail channels’ strategies and communication.
2. Increase the impression rate / awareness of the brand’s initiatives and customer specific plans.
3. Integrated joint business planning with customers.
4. Take advantage of the fast developing trend of retail social media and be the first to exploit it (advantage of the first comer).
5. Leverage social trade marketing to further improve the shopper based design toolkits with retailers as being part of one planning entity.
6. Leverage the retailers’ number of followers in further endorsing the brand’s messages.
With the sheer amount of followers, the social media platform is proving that it could be a successful communication medium with consumers whether it is directly linked with the brand itself or the middleman. Nonetheless, to win in today’s changing landscape, there is a dire need to leverage the retailers’ social presence to be featured in the social conversation where the buying decision is actually being made.