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

While online sales have grown steadily, the
share of online sales remains relatively small

2
Source: U.S. Census Bureau © 2009 The Nielsen Company
www.nielsen-online.com / www.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

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

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

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

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

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

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

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

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

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

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

“Store brand” discussion driven by Baby category

17
Note: Timeframe: last 90 days as of 5/8/09 © 2009 The Nielsen Company

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
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
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

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

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

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

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

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

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

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

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

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

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


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