Nielsen Online Retailers Social Media Webinar Clients

Listening & Engaging: A Social Media Framework for Retailers July 15, 2009 Maya Swedowsky – Research Manager maya.swedowsky@nielsen.com

However, what is becoming abundantly clear is the influence of the Internet on offline purchasing • Site to stores: What impact does my Web site have on sales that are transacted in my stores? • Online advertising on offline sales: What impact does my online advertising have on offline sales? • Social media: What are people saying in social media about my brick and mortar business? What can I do about it? Key takeaway: What happens online does not stay online 3 © 2009 The Nielsen Company www.nielsen-online.com / www.nielsen.com

What does this mean? • Visibility into Internet behaviors is critical across the retail enterprise • Social media strategy cannot be relegated to the Internet team in the basement 4 © 2009 The Nielsen Company www.nielsen-online.com / www.nielsen.com

Key Findings • Consumer-Generated Media Overview Establishing relevancy for retailers • Listening Overview Private label case study • Engaging Overview Best Practices • Final Advice • Q&A 5 © 2009 The Nielsen Company www.nielsen-online.com / www.nielsen.com

Consumer-Generated Media

From early newsgroups to Twitter, consumer- Our CGM Dataset generated media (CGM) has come a long way and continues to grow rapidly Social Ratings & Co-creation networks Types of Consumer-Generated Media review sites Micro- community sites Twitter Video Feedback Consumer portals blogs Discussion forums Mobile Media Audio blogs blogs blogs Usenet newsgroups Groups Marketer Video blogs blogs Early-Stage Internet Today 7 © 2009 The Nielsen Company www.nielsen-online.com / www.nielsen.com

Twitter no longer just for techies - Visitation up almost 1500% YOY as celebs and gen pop jump on the bandwagon Change in CGM Stats, YOY Unique Audience (Millions) for Twitter, Facebook, YouTube and MySpace, May 2008 – May 2009 Metric May ‘08 vs. May ‘09 # unique visitors +9% 17% YOY Time per person +67% 190% YOY Who’s engaging in CGM? 10% YOY Demo Index Gender Male 98 Female 102 Age 12 – 34 103 35 – 49 115 1448% YOY 55+ 91 HH $25K –$50K 99 income $75K–$100K 99 $150K+ 105 8 Source: NetView, Home & Work, May 2009, May 2008 © 2009 The Nielsen Company www.nielsen-online.com / www.nielsen.com

So, why is Social Media so big? • Satisfies emotional need to be heard • Gives ability to connect with one another • Allows us to promote the things and people we love • Easy, low barriers to entry, technology 9 © 2009 The Nielsen Company www.nielsen-online.com / www.nielsen.com

Purchase consideration process has always been a social endeavor; CGM brings it to a whole new level • CGM expands a shopper’s personal network of just a handful of people to hundreds, if not thousands, of people • Advocacy has always existed, but social media has made this stage even more critical, amplifying the size of the audience reached Multiplier Effect 10 © 2009 The Nielsen Company www.nielsen-online.com / www.nielsen.com

CGM provides Retailers with two key opportunities: Listen and Engage 1. Listen – Observe naturally-occurring online discussion to understand consumer attitudes and needs, and answer key business questions ○ The promise of listening is compelling ○ Acts as barometer for passion ○ Provides early detection of risks, opportunities, happens in real- time – fast! ○ Enhances current research methods: “focus the focus group,” ask the right questions 2. Engage – Proactively and transparently encourage and take part in online conversations about you and the products you sell. 11 © 2009 The Nielsen Company www.nielsen-online.com / www.nielsen.com

Listening

Here’s how all companies should be thinking about listening… • Augment existing research, layer CGM into customer satisfaction tracking Customer Crowd- In-Sore Corporate .Com Service & Products Sourcing Experience Comm. Experience Checkout 13 © 2009 The Nielsen Company www.nielsen-online.com / www.nielsen.com

And here’s how you should be thinking about listening as a Retailer In-Store Experience .Com Experience • Customer service • Informational resource Products Crowd- Sourcing • Return/coupon policy • Transactions • Layout • Shipping charges • Merchandising • Weekly ads • Locations Products Marketing • Selection • Availability • Brand health – charity, • Pricing sustainability policies • Quality • Community relations • Private label • Coupons & circulars • Trial sizes 14 © 2009 The Nielsen Company www.nielsen-online.com / www.nielsen.com

Listening: Private Label Case Study

Nielsen Online captures and analyzes CGM to gain insight into consumer perception and needs Social Blogs Networks Forums Twitter Nielsen Online Content Reservoir Analyst Team • Over 110M blogs • Over 10 years of social • Tens of thousands of forums and media expertise groups • Industry-focused • Social networks (e.g. Facebook) analysts and micro-blogging (i.e. Twitter) platforms 16 © 2009 The Nielsen Company www.nielsen-online.com / www.nielsen.com

Passion for Costco’s products, service drive its disproportionately large share of voice • When fans and employees noticed that Costco did not have an official Facebook Page, they created multiple Pages, with some attracting more than 50,000 fans. To put this in perspective, the largest BJ’s Facebook Page has just over 200 fans. “Going to costco = religious experience” “I love Costco. :) It is one of my favorite places ever. Literally” Market Share Based on 2008 Revenue Buzz Share Source: United States Securities and Exchange Commission 18 Buzz share is depicted as a percentage of 546,275 mentions of Costco, Sam’s © 2009 The Nielsen Company www.nielsen-online.com / www.nielsen.com Club and BJ’s in 2008

Costco’s private label line, Kirkland, maintains steady lead over club store brand competitors Buzz Volume for the Store Brands of Costco, BJ’s and Sam’s Club • Store brand discussion tends to account for less than 5% of club store buzz. More commonly discussed topics include: • Prices • Membership fees • Name brand products 19 Buzz volume is depicted as a percentage of 343,043,278 messages © 2009 The Nielsen Company occurring between November 16, 2008 and May 9, 2009. www.nielsen-online.com / www.nielsen.com

Price, comparisons to big name brands drive club store brand discussion Topics Driving Discussion for the Store Brands of Costco, BJ’s and Sam’s Club A A BJ’s store brands yield greatest share of discussion B about price as parents discuss saving money by purchasing A Baby products in bulk; for BJ’s private label products, price trumps quality B Costco’s private label line yields the smallest share of comparisons to big name brands, pointing to the possibility that Kirkland could be on its way to being considered a brand with an independent identity 20 Note: n =100 messages for each retailer, timeframe = Q1 2009; topics accounting © 2009 The Nielsen Company for less than 3% of discussion have been removed for ease of viewing www.nielsen-online.com / www.nielsen.com

Baby category dominates club store brand buzz, presenting a large opportunity, especially for BJ’s Product Categories Referenced in Discussion About the Store Brands of Costco, BJ’s and Sam’s Club A A Almost two-thirds of discussion about BJ’s store brands focuses on diapers, formula and baby wipes 21 Note: n =100 messages for each retailer, timeframe = Q1 2009 © 2009 The Nielsen Company www.nielsen-online.com / www.nielsen.com

Despite FDA rules, some moms are too “gun shy” to use generic formula BARRIERS TO ENTRY “OK so now that Jenna is FF quite a bit, I realize just how expensive this stuff is! I have been using the Enfamil Lipil and she loves it. I know there are Safety concerns, lack of generic formulas and the Berkely & Jensen awareness of FDA regulation brand is SO much cheaper (BJ's Wholesale brand). But, I am gun-shy to use it. Anyone else nervous to use generic formulas or is it just me??” - iVillage.com messageboards, 03/05/09 BARRIERS TO ENTRY “Has anyone used the Sam's club brand diapers? Do you like them? I was thinking about trying them, but it's such a huge box. Large package sizes Does anyone know who makes them? If they are sold at another store as their brand I could buy a smaller package.” - Ovusoft.com, 02/24/09 22 © 2009 The Nielsen Company www.nielsen-online.com / www.nielsen.com

Engaging “With social media is it about a true authentic connection with an audience…It's a way to engage people and it's an augment for your product... Don't think of it as a substitute for traditional marketing…It's a great amplification to what you are already doing.” John Andrews, senior manager of emerging media for Wal-Mart

Almost two-thirds of Retailers have already invested in CGM; another 22% plan to get involved within the next 12 months* • 30.5% of Retailers say that social network presences will perform better as a marketing vehicle than paid search or search engine optimization in 2009 (Source: Internet Retailer survey) • Not sure how to get involved? That’s why we’re here today! 24 *Source: Forrester Research © 2009 The Nielsen Company www.nielsen-online.com / www.nielsen.com

Use CGM to power your business by enhancing your website and leveraging 3rd party tools Customer Crowd- In-Sore Corporate .Com Service & Products Sourcing Experience Comm. Experience Checkout 25 © 2009 The Nielsen Company www.nielsen-online.com / www.nielsen.com

Give shoppers a reason to visit your website and keep them engaged, but focus majority of effort on expanding your footprint and reaching shoppers where they are already congregating Retailer Third Party Website Tools Forum / Corporate Community Blog Social Blogs, Forums, Product Networks Social Shopping & Reviews Product Review Social Chat Bookmarking Functionality Twitter Video Proactively and transparently encourage online conversations, participate and react quickly. All forms of engagement should support common goal/voice. 26 © 2009 The Nielsen Company www.nielsen-online.com / www.nielsen.com

Best Practices: Customer Service Zappos’s 360 Degree Customer Service Twitter as key platform for providing customer What is it? service, in addition to more traditional outlets (24/7 phone line, email) Immediate – reaches shoppers where they’re Why we like it already congregating Personal – gives Zappos a human element 27 © 2009 The Nielsen Company www.nielsen-online.com / www.nielsen.com

Best Practices: Product Reviews Wal-Mart’s Product Reviews What is it? Product review platform, includes free-form text as well as assigning # of stars Why we like it Active – Wal-Mart reviews have accumulated critical mass Transparent – feedback is not censored; W-M posts one star and five star reviews alike Personal – allows customers to share photos of themselves using the product Easy to Share – ability to share review via Twitter, Facebook, Digg and del.ici.ous Connects Customers - customer Q&A Exchange gives customers the opportunity to ask each other very specific product-related questions before making a purchase What’s next? Video – third party review sites (e.g. Expo TV) and a few retailers (e.g. Amazon) allow customers to post video reviews Expert Reviews – have industry experts share professional reviews by video 28 © 2009 The Nielsen Company www.nielsen-online.com / www.nielsen.com

Best Practices: Crowd-sourcing Starbuck’s My Starbucks Idea What is it? Micro-site encourages customers to submit ideas related to Starbucks products, experience and community involvement Why we like it Different - one of the few companies proactively leveraging customers for product development Transparent - gives readers an ongoing sense of involvement by categorizing submitted ideas as “under review,” “reviewed,” “coming soon” and “launched” Socially Responsible - Starbucks isn’t just taking by asking customers for product ideas, it is also giving by making changes to its environmental practices and community involvement, based on customer input Encourages Community - ability for customers to talk to each other and Starbuck employees 29 © 2009 The Nielsen Company www.nielsen-online.com / www.nielsen.com

Best Practices: Internal Communication Best Buy’s Blue Shirt Nation Mix What is it? Private social media platform for Best Buy’s 150,000 employees encourages communication and collaboration. Why we like it Different - one of the few retailers using social media internally Highlights Importance of Customer Service – Best Buy believes that its employees are one of its best assets, as evidenced by its TV commercials, including its latest “True Stories” campaign Enhances Employee Satisfaction - allows engaged employees to share their thoughts and make proactive contributions to the company 30 © 2009 The Nielsen Company www.nielsen-online.com / www.nielsen.com

Final Advice • What happens online does not stay online • Assume consumer control/power will grow – listen to your customers • Get the listening piece right – no short cuts • Engage, participate, sense & respond • Nurture and protect brand credibility by being honest, open and transparent – introduce yourself! • Do not neglect your website, it is one of your best marketing vehicles… • But focus majority of effort on reaching customers where they’re already congregating • Rethink the strategic role of customer service • Think beyond loyalty to “advocacy” • Learn from everyone in your organization 31 © 2009 The Nielsen Company www.nielsen-online.com / www.nielsen.com

Thank you. About Nielsen Online Nielsen Online, a service of The Nielsen Company, delivers comprehensive, independent measurement and analysis of online and mobile audiences, advertising, video, consumer-generated media, word of mouth, commerce and consumer behavior, and includes products previously marketed under the Nielsen//NetRatings, Nielsen BuzzMetrics and Nielsen Mobile brands. With high quality, technology-driven products and services, Nielsen Online enables clients to make informed business decisions regarding their digital, mobile and marketing strategies. For more information, please visit www.nielsen-online.com. Also, visit our blog at www.nielsen-online.com/blog. About The Nielsen Company The Nielsen Company is a global information and media company with leading market positions in marketing and consumer information, television and other media measurement, online intelligence, mobile measurement, trade shows and business publications (Billboard, The Hollywood Reporter, Adweek). The privately held company is active in more than 100 countries, with headquarters in New York, USA. For more information, please visit, www.nielsen.com © 2009 The Nielsen Company www.nielsen-online.com / www.nielsen.com

Nielsen Online Retailers Social Media Webinar Clients

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