Social Media: New Golden Age for Retailers?

by Dan Hutson on June 8, 2009

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photo by army.arch

My wife and I owned a small bookstore in Charlotte, North Carolina, for a little over four years. We bought it from a woman who had started it more than 20 years earlier and was ready to retire. Without dredging up too much painful history, I quickly learned that I had let emotion trump logic and failed to do the due diligence that would have sent me running in the opposite direction.

I bring this up because, after swearing off ever again getting into any kind of bricks-and-mortar retail situation, I’m actually feeling the itch thanks to social media. (If my wife ever reads this, don’t worry honey … it’s a mild itch at best.)

The more time I spend using social media, the more I’m convinced that we are entering a new golden age for the independent local retailer. Yes, big boxes and category-killers have decimated the ranks of the indie retailer over the past few decades. But social media may help to level the playing field. Here’s how:

Relationship Building
No one does a better job getting to know their customers than a good local retailer. I learned my customers’ names, got to know their buying habits and learned what was happening in their lives during the short time they spent in my store. Social media offers the tools to extend that learning process beyond the store. Relationship building time can extend far beyond face time. Back in the ’90s Don Peppers and Martha Rogers called the use of increasingly affordable technology to capture customer data and develop a deeper understanding of individual prospects the one-to-one future. I wonder if they envisioned the degree to which the concepts they explored in their books have developed on the web.

Conversation

Many retailers get into their businesses because they have a passion for their product. I got into the bookstore business because I love books. And when I say I love books, I mean I LOVE BOOKS. My family still gives me grief about the the time we were cruising bookstores in Berkeley and I stumbled but managed to save the huge bag of books I was carrying while falling on my ass.

If you love something like that, then you love talking about it. You look for others who share that passion. Social media makes it easier than ever to find people who share your interests and engage them in conversation. Conversation builds relationships, and relationships built on a shared love of something can often lead to sales.

There’s nothing I enjoy more than talking books with people who know their stuff. That’s hard to find in a Barnes & Noble or a Borders where they’ve cut staff back so far that it’s difficult to find someone to ask where the restroom is, let alone talk books. And while there are certainly book lovers working in the chains, chances are slim they share your particular interests. When I walk into a genre store like Mysterious Galaxy in San Diego, I know someone there will know who I’m talking about when I ask about Christopher Fowler or Peter Straub or Graham Joyce. And when I walk into a large indie like Vroman’s in Pasadena, I know the staff will have more answers than down the street at Big Box.

Again, social media enables you to extend and deepen the conversation beyond store time. When I got a book in that I knew would interest a particular customer, I’d pick up the phone. Now it’s even easier with Twitter and e-newsletters and blogs. There’s no excuse NOT to be in an ongoing conversation with your best customers at a minimum.

Customer Service
I loved finding new books that I thought would excite a particular customer. I loved letting someone know that the latest issue of their favorite magazine had just arrived. If you’re in retail and you don’t get a kick out of discovery on behalf of your customers, then you’re probably in the wrong business.

The good news (or bad, if you’re the customer) is that great customer service is in the minority everywhere. If you already offer it, you’re already special. Imagine how phenomenal you can be by amplifying that level of service through social media.

Authority
If you really know your stuff, social media provides the platform for strutting it. You can be the invaluable go-to source for help and information. Identify your niche, figure out what those customers want in the way of information and share freely through social media. Your generosity of spirit and depth of knowledge will make themselves known if you work hard at it.

Most businesses have access to industry information that would also be of interest to your customers. Pass it along. Don’t assume your customers don’t care about the details of your sausage-making. Many are interested. In the democratization of information, you are an ambassador.

As more people use Twitter, join social networks and rely more on blogs for news and information, the opportunities for retailers to use social media to build stronger relationships with customers will multiply dramatically.

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{ 3 comments }

Loren A. Roberts June 16, 2009 at 11:52 am

Yep. You are absolutely right. Now I have to figure out how social media helps the service economy small business (like mine)! Got any ideas?

Loren A. Roberts June 9, 2009 at 9:22 am

Dan: The only thing I would add is that factors of scale play an increasing role in online social marketing. As the “big guys” get more savvy to all of these tools, they are going to enter the fray and outspend/outgun most small companies. It’s all well and good to say that authority and passion and customer service give the local retailer leverage. And it’s true — a mom-and-pop store can look and feel exactly like Amazon online, with the service/passion/relationships as a bonus. But it cuts both ways: because the two companies look the same but Amazon is an 800-pound gorilla with gobs of money to spend, Amazon might be too big to be personal, but it has can outspend any local shop, and in the process create a much more robust user experience, which leads to better customer service, more community, and a better chance at finding what I’m looking for. As much as I love Vroman’s Bookstore, 1) even they can’t cover all of my arcane subject-matter interests, and 2) you pay a premium at the cash register for their local store (which I happily do as often as I can because I want Vroman’s to stay here).

Here’s another case in point. In general I don’t really enjoy Kenneth Turan’s movie’s reviews. I subscribe to the L.A. Times, so I get them, but when I want to check out a movie, I automatically go to Rotten Tomatoes online, because reading the aggregate of dozens of reviews, plus user comments, always gives me a better insight into whether I will like a movie or not. (I could care less about the “tomatometer” percentage, but I like skimming all the written reviews.) Rotten Tomatoes can’t be done on a local level; in fact, I would posit that online communities like Rotten Tomatoes and the user comments on Amazon bring a much more targeted community to you than any local retailer can.

I believe you are saying that this new communication/community medium creates an opportunity for the independent local retailer. While I agree that this is true, it also means that the mega-multi-national online retailer is competing with you on a level it never has before. As I’m pushing myself further and further into the social networking/marketing stream, I’m always having to ask myself “am I trying to do something that the big companies are always going to be better at?” and “How can I distinguish myself from the bigger guys on the web in my field?” and maybe even “How can I team up with some of the bigger guys on the web in my field to create some mutual success?”

Dan Hutson June 9, 2009 at 11:34 pm

Good points, Loren. I agree that you can’t compete with an Amazon on its terms. In bookselling the indies have learned that they generally have two choices: go niche or go big. There’s no room anymore for the mid-size independent bookseller. You can either go deep into a subject and become the expert resource on it or you can build a store that can compete with the big boxes in terms of inventory (e.g., Powells, Tattered Cover). The niche store can build its community of like-minded readers both offline and online. Dark Delicacies in Burbank, for example, is one of the leading horror shops in the country. Can Amazon or Barnes & Noble match my experience with this store? No, nor do they wish to. A niche-focused store where the staff know their subject inside and out will always trump the big generalist, in my opinion.

But here’s the thing … there’s a huge segment of the market that has no interest in that kind of customer experience. For every customer who loves the great little local pizza joint down the block, there are a dozen others who are just as happy eating at Pizza Hut every time. The great local retailer can’t compete for those customers; his customers are the people who want deeper relationships, who value personalized customer service and understand what a great locally owned independent business does for a community. When I travel to another city, I don’t hit the local Borders; I look for the great indie. I don’t eat at McDonald’s, I seek out the best indie burger joint. I want to experience the culture of that city, and it isn’t the local branch of a national retailer.

Unfortunately, there are far more people who prefer the known quantity to the unknown. Indie retailers need to recognize where the greatest potential for business lies, and it isn’t with the masses. They’re headed for Wal-Mart.

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