Retailers and Social Media

Student Number: 2224030 RMKU9R4
 
1
Critically evaluate whether or not retailers
can use social media and mobile
technologies to alter
customer behaviour to their own beneﬁt?
Illustrate your answer with reference to
one retail sector.
WORD COUNT: 3538
STUDENT NUMBER: 2224030

Contents Page
• Introduction and Summary of methodology 3
• Social Media and Mobile Technologies 4
• Retailers and the Digital Era 5
• Organisations Analysis 7
- Missguided 7
- H&M 10
- Chanel 11
• Comparison 12
• Conclusions and Recommendations 14
• References 15
• Appendix 17
2

Introduction
The aim of this report is to critically evaluate whether or not retailers
can use social media and mobile technologies to alter customer
behaviour to their own benefit.
First of all, the definition of what is meant by social media and mobile technologies
will be provided along with a number of data concerning the use of this kind of
instruments by consumers.
Afterwards, some examples will be given of how retailing functions can be
performed through social media and mobile technologies and how retailing theories
can be adapted to these devices.
Moreover, three firms within the retail sector of ladies apparel will be analysed in
depth to better understand the impact of social media and mobile technologies
when used in retail marketing.
The organisations presented will be compared and contrasted to
examine whether the use of such tools represents a real
competitive advantage and, if so, the magnitude of this advantage.
In the end, some conclusions will be drawn in order to provide an
answer to the question asked at the beginning and some
recommendations will be made.
Summary of methodology
The methodology adopted to analyse the industries’ approach to social media
includes the employment of:
• Primary sources: personal knowledge of the stores
(online and physical), personal experience as a
consumer, interviews to managers and personnel,
experts journal articles.
• Secondary sources: analysis of the promotion
material, advertisements, web pages, financial
statements, forums, newspapers.
• Research methods: observation, study of analytics
and review of existing literature.
• Auxiliary means: pictures, screenshots from
websites and social media pages, tables.
3

Social Media and Mobile
Technologies
Social media are websites where people can create
their personal account and share contents with other
users, while mobile technologies are both used for more
basic means of communication such as calls and texts,
and as a support to access social media and the
internet. The aim of both tools is to connect people,
shrink the world and delete distances in order to make
everyone able to develop relationships with whoever in
the world and capable of expressing their idea on a
platform where someone will eventually listen to it.
Social media and mobile technologies have become an increasingly important part
of people’s lives in the last years. In fact, for example, Facebook accounts for
15.5% of total time spent on the Internet, Instagram has 150 million monthly active
users and 78% of Facebook users are mobile-only (MomentFeed, 2015) (Reed,
2013). Moreover, social media and mobile technologies seem to account even
more popularity than TV among US adults who spend 29% more time on digital
than on TV and usually use at least one other device while watching TV
(MomentFeed, 2015).
These data are extremely significant to retailers, who undoubtably need to adjust
their marketing strategies and make sure they provide information and promotion
through the right channels.
Evidence easily suggests that ads on TV are no longer the key influence on buyers.
Nowadays, 47% of americans say Facebook is their #1 influencer of purchases
(MomentFeed, 2015) and online
r e v i e w s h a v e b e c o m e
fundamental in the purchasing
decision.
Can retailers use this new trend
to gain competitive advantage?
If so, how?
4

Retailers and the Digital Era
In the Age of social media and mobile technologies, retailers need to adapt the
theories and concepts of retail to the new tools available and ﬁnd a way to perform
retailing functions through these new instruments.
Evidence shows that the majority of retailers at the moment are using social media
in the traditional one-way linear model of mass communication (Johansson, 2013),
in which there is no interaction between retailer and customer, consumers are
assumed to be passive and retailers simply transmit their promotional message to
them.
However, this model was developed in 1955 and it is no longer appropriate as
modern customers are interested in having a personal relationship with retailers
and prefer those who interact with them.
Some companies have understood this desire and are already using social media
and mobile technologies to improve their relationship with buyers.
The two retailing functions on which retailers are focusing more when involving
social media and mobile technologies are customer service and brand building,
here are some examples of how these digital tools are used by ﬁrms to improve the
business performance:
CUSTOMER SERVICE
Social media allow retailers to:
• Improve the quality and increase the amount of customer analytics: the more
retailers know about their customers, the better customer service they can
provide. Social media represent a great source of analytics: customers have the
chance to express what they like more about a certain retailer and what, instead,
is not satisfying their needs and wants. Consequently, retailers can adjust their
performance. Moreover, if a retailer has misunderstood the target audience, it is
possible to get to know it better by looking at the social media pages of the brand
and studying the people who liked it (or followed it) through the insights provided
by social media.
Mobile technologies can help retailers by:
• Allowing people to use social media everywhere: the amount of time spent on
social media has grown a lot since social media apps were developed and so did
the amount of data available to retailers, with the result of an overall
improvement in customer service in the last years.
5

• Providing in-store wifi and mobile apps: every retailer that provides in store wifi
can analyse the data collected through the buyers use of wifi, and afterwards,
through the retailer mobile app it is easy to offer coupons to shoppers based on
their preferences, give them the chance to share a purchase with a friend or
learn more about the products before buying (Accenture, 2013). All of these
features make the customers feel better about the company and help develop
loyalty towards the brand, i.e. shoppers like the customer service they get and
the attention the retailer pays to them and are willing to go back to the store.
BRAND BUILDING
Social media provide:
• Opinion leaders: customers want a personal relationship with the brand, they
want to be listened and understood and want to be advised on what to buy by
people they can trust, people just like them. Opinion leaders are individuals that
are more predisposed to receiving information and then reprocessing it to
influence others, they belong to the same peer group of consumers and, because
of that, they are more persuasive than the information received from mass media
(Baines and Fill, 2014). Bloggers are opinion leaders and operate through social
media. Usually firms send free products to them so that they wear or use the
goods and then review them — hopefully providing a positive feedback; once
bloggers have become famous, firms hire them and make sure they advertise
positively the brand. The influence that bloggers have on people (especially
young individuals) is huge and the wideness of the audience they can reach is
incredible, so companies get an effective highly-involving marketing campaign by
hiring only one person (or a few more).
• Feedback and reviews: social media give customers the opportunity to write what
they think of the product after purchasing it, i.e. the audience reactions to the
product or service are now public. The feedback and reviews process is similar to
the opinion leaders mechanisms, consumers trust what other shoppers think of
the products because they can identify themselves in the people who wrote the
review or feedback. A series of bad feedbacks can be fatal to a company, but if
the reviews are positive they become a great competitive advantage and source
of profit.
• Likes and followers: The number of likes on the retailer’s Facebook page or the
amount of followers on Twitter and Instagram are influencing the people’s attitude
towards the company. Creating the firm’s Facebook, Twitter and Instagram
accounts is the first step towards building the brand and making it grow.
Mobile technologies:
• allow customers to get all the information listed above whenever they want. So, if
the retailer is doing a good job in brand building on social media it is very difficult
not to notice as people can check what is happening on their mobile (and usually
do so quite often).
6

Three organisations within the sector of Ladies Apparel will be now analysed in
order to provide some practical examples of how retailers use social media and
mobile technologies to alter costumer behaviour to their own benefit.
a. MISSGUIDED
Missguided is an online fashion retailer born in 2009, from the initiative of the British
32 year-old entrepreneur Nitin Passi. The company started delivering products to
the UK and now, after only six years, it is expanding across the EU, the US and
Australia (at the moment it is active in 160 countries), it includes over 600
employees and has reached £51m revenue in
2014 (Loizou, 2015). Missguided owes its
success and quick growth to social media and
mobile technologies, and, of course, to a staff
able to make the most of these resources.
Since social media and mobile technologies
arose, the mass communication costs has
become incredibly low. However, the scene
for brand building has become more crowded
and organisations such as Missguided need
to differentiate from thousands of others to
succeed. Missguided’s competitive advantage is the consistency between their
brand identity, image and profile. The brand owner, Mr. Passi, wanted the brand to
have a core customer base of women between 16 and 35 years old (Sillitoe, 2014)
and to reflect in the products exactly what target customers feel and want.
Missguided made of the interaction between the brand and the customers the
biggest strenght of the organisation, as they say:
“We are Missguided. We are an empowering, bold and forward thinking online
fashion brand, inspired by real life. We design and create product informed by you,
our customers, our friends and global influences: Catwalk, celebrity, social media,
bloggers and street style, creating an online fashion destination that encompasses
and celebrates everything it means to be a girl in a digitally immersed world
today.” (Missguided, 2015)
In fact, this is exactly what they deliver designing clothes in line with the latest
trends, at affordable prices and having the former Pussycat Doll and X-Factor judge
Nicole Scherzinger as a brand ambassador.
Moreover, the customers —mostly composed by young women— have the feeling
to be understood and to have a personal relationship with the brand, thanks to the
7

marketing strategy adopted by Missguided through social media and mobile
technologies.
Some examples of the company’s knowledge and expertise on how to use
conveniently digital tools are listed below:
• When customers ask for help on social media, Missguided answers informally so
that the shopper has the feeling to be talking to a modern young woman. This
shows the deep knowledge that the company has of its customers. In fact, most
Missguided customers are young ladies, that would answer in the exact same
way as Missguided staff do. In this way, the communication is quick and easy,
customers feel at ease and the relationship between retailer and buyers is
informal and relaxed, resulting in a generally positive attitude towards the brand.
• Missguided always retweets customers’ tweets (Twitter, 2015). This makes
customers feel important and part of the community, involvement is a key factor
to achieve customers loyalty. Moreover, seeing positive tweets wrote by normal
people on the company, those who are visiting Missguided twitter account for the
ﬁrst time have a better impression of the brand.
8
Example of conversation between retailer and
customers on Instagram

• Missguided’s campaigns involve customers. They frequently ask customers to
post pictures or thoughts about the theme of their campaign, then they nominate
a winner that usually gets a voucher to spend on Missguided clothes. This is
another mechanism to engage customers and bond them emotionally to the
company, so that they do not stop buying and spreading the positive feeling
about it.
• Missguided is advertised by many famous fashion bloggers (Instagram, 2015),
who have a lot of power over customers as explained before. Moreover, the
fashion bloggers involved in Missguided’s campaigns advertise important brands
such as Victoria’s Secret, Prada and Versace, which is a kind of guarantee of
quality and style in the view of customers.
• Missguided also has its
own mobile app, where
customers can buy, review
or simply gain information
a b o u t p r o d u c t s a n d
activities.
9

b. H&M
H&M was born in 1947 and it is known all over the world. This retailer has already
built its brand and created awareness. Its biggest challenge, however, is to keep on
satisfying customers’ needs, which is not easy considering the business
environment becoming more and more competitive, especially in the ladies apparel
sector.
H&M has 5.13million of followers on Twitter, 21m on Facebook and 5.7m on
Instagram. These are huge numbers, however it can easily be noticed that the
relationship with customers is very formal and most of the answers H&M gives on
social media are copied and pasted from previous ones.
In some cases, H&M manages to reassure customers and to maintain their loyalty
even with short, neutral answers.
However, in some other cases this seems not to be enough:
10

Social media allow new participants, other than the company, to tell stories and
express opinion about it. This situation can lead to positive and reassuring views of
the brand, but social media are also a channel for negative sentiment which is risky
and sometimes discourage ﬁrms to create accounts on them (PwC, 2013).
However, most of the times taking risks is fundamental to succeed.
The contents that H&M posts on social media are mainly generic advertising
photography being repurposed. This does not give a great sense of community and
special treatment to those who follow the brand or like its page.
c. CHANEL
Chanel is a worldwide known brand which was born in 1909. This brand is iconic
and certainly does not need brand building or awareness. Chanel does not even
need to keep customers engaged or involve them in activities or promotion to
maintain their loyalty. In fact, everybody loves Chanel. The legend and the stories
around the logo make women of all ages desire Chanel products, there is no
urgency to persuade them.
Chanel activity on social media is limited to repurposing advertisement and to
maintain through short and effective sentences the image of untouchable and
unreachable brand, which is not even a brand, but a whole lifestyle.
This retailer does not even use fashion bloggers or reviews.
The logo says everything that needs to be said and celebrities
wear Chanel clothes because they want to, and not because
the company gives them free products or pays them.
11

Comparison
H&M is the retailer who has the biggest number of followers, but the lowest number
of new followers every week (see Tables in the Appendix). Also, it is the one using
social media and mobile technologies in the worst way, as it is not an iconic brand
that can afford to avoid having a relationship
with customers, neither is a friendly brand
connected with young people. In fact, H&M
target customers are almost the same as
Missguided and they clearly desire a
different approach from an affordable ladies
apparel brand. They want the brand to be
near to them, ready to answer when they
have a problem and present on social media
with new vouchers and competition every
day. Young women have demonstrated to
appreciate special contents to be posted on
social media, such as authentic, in-the-
moment pictures which have demonstrated
to perform best than the regular advertising
posted by H&M (Reed, 2013).
Nevertheless, H&M keeps its position as #31 in the list of the 100 most valued
brands in the world (Forbes, 2015). However, it has to be said that H&M comprises
more than ladies apparel and that this particular sector could probably fail if they
keep on managing badly social networks and mobile technologies, as the company
will lose their competitive advantage.
At the moment their competitive
advantage is given by the brand
awareness and the affordable
prices, but, as soon as companies
like Missguided will develop and
spread more, this won’t be an
advantage anymore. Thus, H&M
needs to provide added value to
customers or they will switch to
companies that give more
interesting services along with the
products.
Missguided is the company with
the smallest amount of followers and likes on social media. However, it is also the
youngest retailer— only six years old— and the only one that works online only.
12

Missguided was born right after the 2008 financial crisis, when nothing such as
starting a business seemed possible and has managed to grow at an increasingly
fast rate. Right from the beginning, this company has managed to master retail
marketing techniques through social media and mobile technologies and has
conquered a huge number of loyal customers. Numbers suggest Missguided is the
weakest retailer between the three presented, but it is still growing and it is not easy
for a business to grow during these years, so this company is probably stronger
than it seems and extremely prepared to face the future of retail.
Chanel is undoubtably the strongest brand and retailer between the ones analysed.
Regardless of the fact that it is the less active on social media and it does not offer
an app, it is by far the most followed on social media. Chanel is the proof that the
brand is the vital core of the company and that when the core value of the brand is
consistent with the representation of it and the associations people make when
thinking of it, the firm has reached the main objective (Johansson, 2013). In fact,
Chanel does not need to persuade people anymore, it has created the perfect
brand and transmitted to customers an incredibly effective message, at the point
that the desire to own a Chanel
product has become a kind of
underlying, natural feeling of
attraction that is part of our culture
and that every woman is brought to
experience.
To sum up, it can be said that in
certain cases, such as Chanel, the
competitive advantage is already in
the brand or in other parts of the
company. However, in most cases,
such as H&M and Missguided,
especially if the concerned sector is
overcrowded and extremely competitive, the relationship with customers is
fundamental as they are the only ones capable of convincing other potential buyers
that a firm is satisfying and able to deliver valuable products. The newest, fastest
and cheapest way to establish, develop and maintain a relationship with customers
are social media and mobile technologies. However, they do not always make firms
gain competitive advantage as they are a double-edged sword. In fact, social media
are channels of communication, which could be used as means to develop positive
exchanges between retailers and customers, as well as platforms where buyers
express and share negative thoughts, experiences and sentiments about retailers. 
13

Conclusions and
Recommendations
In conclusion, it can be said that retail communications have changed consistently
since social media and mobile technologies were introduced. In fact, businesses
have gone from simply transmitting a message to customers to interacting and
developing personal relationships with them.
To solve the dilemma purposed at the beginning, it can be stated that social media
and mobile technologies can actually be used by retailers to alter customer
behaviour in their own beneﬁt. In fact, the examples provided demonstrate that, in
the vibrant, highly competitive environment of the
ladies apparel retail sector, a company which
wishes to enter the market needs to be able to
use social media and engage with modern
customers to differentiate from the others and
gain customer loyalty. In fact, conquering the
people support and appreciation is the most
effective marketing strategy for organisations in
the ladies apparel sector, as well as in almost
every other sector.
However, old companies which have already
created a solid and effective brand and are
strongly differentiated from competitors, do not need to engage people through
social media and mobile technologies, as long as their strategy is successful.
Some recommendations on how to use social media and mobile technologies to
provide added value that retailers should follow in the future can be:
• retailers should create original brand content and curate
customer content on social media and brands’ apps (Reed,
2013).
• It is very important to show originality, but the consistency of
contents posted with the core value of the brand is essential.
• Improve mobile apps creating store-aware mobile apps which
can scan products found in the shop and provide all useful
information about it to customers, as well as giving retailers the
opportunity to collect data on what buyers scan to understand
shoppers’ tastes and preferences more in depth (EKN, 2013).
• Insert in the store mobile app the possibility to write a shopping
list so that, once customers have typed the products they need,
the app tells them where to ﬁnd the goods in the shop (EKN,
2013). 
14

References:
• Accenture, (2013). Inspiring Shoppers in a Connected Store Environment. 1st ed.
Accenture.
• Baines, P. and Fill, C. (2014). Marketing. 3rd ed. Oxford: Oxford University Press. 
• EKN, (2013). State of the Industry Research series: The Future of the Store. 1st
ed.
• Facebook, (2015). CHANEL. [online] Available at: https://www.facebook.com/
chanel?fref=ts [Accessed 22 Mar. 2015].
• Facebook, (2015). H&M. [online] Available at: https://www.facebook.com/
hmunitedkingdom?fref=ts [Accessed 19 Mar. 2015].
• Facebook, (2015). Missguided. [online] Available at: https://www.facebook.com/
Missguidedcouk?fref=ts [Accessed 26 Mar. 2015].
• Forbes, (2015). The World's Most Valuable Brands List - Forbes. [online]
Available at: http://www.forbes.com/powerful-brands/list/#page:1_sort:
0_direction:asc_search: [Accessed 11 Mar. 2015].
• Instagram.com, (2015). CHANEL (@chanelofﬁcial) • Instagram photos and
videos. [online] Available at: https://instagram.com/chanelofﬁcial/ [Accessed 24
Mar. 2015].
• Instagram.com, (2015). H&M (@hm) • Instagram photos and videos. [online]
Available at: https://instagram.com/hm/ [Accessed 30 Mar. 2015].
• Instagram.com, (2015). MISSGUIDED (@missguided) • Instagram photos and
videos. [online] Available at: https://instagram.com/missguided [Accessed 24 Mar.
2015].
• Johansson, U. (2013). Social media and brand building in food retailing - an
explorative study. Lund: Lund University.
• Loizou, K. (2015). How I Made It: Nitin Passi, founder of Missguided | The
Sunday Times. [online] Thesundaytimes.co.uk. Available at:
http:www.thesundaytimes.co.uk/sto/business/small_business/article1513460.ece
[Accessed 13 Mar. 2015].
15

• Missguided.co.uk, (2015). About Us. [online] Available at: http://
www.missguided.co.uk/about [Accessed 29 Mar. 2015].
• MomentFeed, (2015). MomentFeed - Localized Marketing at Scale. [online]
Available at: https://momentfeed.com/localizedmarketing/trends [Accessed 25
Mar. 2015]
• PwC, (2013). Demystifying the online shopper: 10 myths of multichannel retailing.
1st ed. PwC.
• Sillitoe, B. (2014). Big interview: Missguided managing director Nitin Passi -
Essential Retail. [online] Essential Retail. Available at: http://
www.essentialretail.com/news/article/53aa8962ee6e1-big-interview-missguided-
managing-director-nitin-passi [Accessed 8 Mar. 2015].
• Twitter.com, (2015). CHANEL (@CHANEL) | Twitter. [online] Available at: https://
twitter.com/CHANEL [Accessed 16 Mar. 2015].
• Twitter.com, (2015). H&M (@hm) | Twitter. [online] Available at: https://twitter.com/
hm [Accessed 24 Mar. 2015].
• Twitter.com, (2015). Missguided (@Missguided) | Twitter. [online] Available at:
https: twitter.com/Missguided [Accessed 17 Mar. 2015].
 
16

Appendix
17
followers TWITTER FACEBOOK INSTAGRAM
CHANEL 6.95M 14M 3.5M
MISSGUIDED 280K 758K 875K
H&M 5.13M 21M 5.7M
new page likers (per week)
CHANEL 53,382
MISSGUIDED 2,893
H&M 2,735
people talking about them
CHANEL 223,799
MISSGUIDED 3,856
H&M 297,116
Table 1. Companies’ number of followers on three types of social
Table 2. Companies’ number of new page likers per week on Facebook
Table 3. Number of people talking about the companies on Facebook

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