Role of Social in General Merchandise: To Each His Own

By Ashish Chaturvedi August 7, 2019

In Q1 2019, social media traffic contribution to leading general merchandise websites in the US was 4.09%. The number was 4.26% a year ago (for the same period). If one were to focus myopically on these numbers and these numbers alone, there isn’t much to write home about. However, it would be a big mistake to do so. The general merchandise retailers are no longer looking at social channels only to generate site traffic. The realm of social has expanded into something much bigger, broader, and more impactful. Over the years, certain categories under general merchandise (like beauty, music) that were previously commodities are now cults because consumers care more and more about environmental impact and sustainability. The purchase and consumption of everyday items become statements. Brand choice attests to the refined tastes, awareness of sustainability issues, and therefore the social status of the consumer.

Social media is primarily a vehicle for discovery, exploration, and engagement. Different retailers are leveraging social to accomplish different goals. They vary from growing brand loyalists to building/changing brand reputation, from product discovery to analyzing consumer behavior. To understand this paradigm shift, let’s look at how some leading general merchandise retailers are using social media.

Target leverages social to maintain its ‘Tar-Jay’ image. Target’s prime objective on social media is not selling. Instead, it’s about adding more brand loyalists and re-emphasizing brand positioning to the existing customer. This strategy is evident in the nature of its posts across social media channels, most of which reinforce the brand’s close, emotional association with its customers. And, the evidence says the “Tar-Jay” customer reciprocates. It’s not surprising to see that Target achieved the highest engagement—the sum of likes/shares/comments divided by the number of posts—across Facebook (5,346), Twitter (17,553) and Instagram (29,810) during Q1 2019. Source: [Retail Hive benchmark – general merchandise retailers]    

Amazon has its own Instagram-like social feed called ‘Amazon Spark’. Amazon does exceedingly well on mainstream social sites such as Facebook and Twitter. However, when it comes to lifestyle-driven status-oriented platforms such as Instagram, Amazon isn’t the most sought after player (details and complete analysis can be found in Retail Hive benchmark – general merchandise retailers. Most likely to overcome this challenge, Amazon has its own Instagram-like social feed site known as ‘Amazon Spark’. Spark is a collection of stories and photos posted by Amazon customers that mostly contain shoppable products. A user can access Spark within the Amazon mobile app, where stories and photos (e.g.: a woman in a swimsuit purchased from Amazon on a beach) are displayed based on the interest areas selected from an exhaustive list (like sports, travel, arts). If the picture has a shoppable product, the user can click on the product and gets re-directed to the product display page. Amazon benefits in multiple ways. First is rather than pushing a product directly, Amazon is selling a story. Second, through user posts and browsing history, it gets to better understand customer aspirations and social behaviors. It won’t be an overstatement to say that Amazon has a dedicated social channel for product discovery and promotions. However, there are no reports or findings hinting towards adoption or success of this offering.

Walmart utilizes social as a driver for branding. Walmart is looking for different gains through different social channels. Walmart has been extensively using Pinterest as a platform to change its brand perception of being a store for quotidian needs. Around 60% of Pinterest’s users believe that using the platform elevate their lives. In the eyes of the consumer, Pinterest is more a search engine for ideas rather than a social site. Therefore, Walmart ads on Pinterest are tweaked accordingly, where it’s less about pushing a product and more about suggesting it could be more than a staple – it could be a lifestyle brand. Walmart is still in early stages of this brand makeover but there’s enough evidence to suggest that it’s a vital part of Walmart’s future strategy. Some of the steps taken in this direction include bringing 145 luxury-oriented brands under the Walmart product umbrella through partnership with Lord & Taylor; establishing a new technology incubator Store No8 working on the future of retail; projecting the brand as an employee-first business by raising hourly wages, providing additional maternity benefits, partnering with Guild education and three more universities to offer a subsidized two- and four-year degree program in SCM to its employees. Interestingly, some of the most engaging posts by Walmart across leading social media channels including Facebook and Instagram showcased its employees’ photos, choices, and achievements.

Wish.com extensively use social media to not just sell but pin down the consumer requirement. Wish.com—a nine-year-old billion-dollar e-commerce company that works on a rock bottom pricing strategy predicated on importing unbranded products from China (and often drop shipping)— is a phenomenal social media spender. In Q2 2017, Wish.com was the biggest app advertiser on Facebook, the fourth-biggest advertiser on Pinterest, and the six-biggest advertiser on Google. It leverages social media not just to notch up website views but to study customer ad view history, customer browsing patterns, and social profiles to make specific product recommendations. Wish.com’s deep learning algorithm processes more than 17 billion different events each day. As Wish.com has a unique assortment of products (like GPS tracking device for mobile anti-theft), most purchases are on impulse. Therefore, it becomes imperative to understand consumer buying patterns.

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