Words by Fiona Jenvey, CEO Mudpie. To connect with Fiona join her on Linkedin
The growth of the internet and social media is not just about marketing; increasingly it is driving a change from a market driven economy to a consumer driven economy. Now almost instantly consumers can browse, shop and purchase the latest trend-led garments through a multitude of devices, applications and social media sites. In order to meet this demand for instant gratification, supply chains will need to be revolutionised if they are to catch-up with their consumers. But what does this ‘real time’ world mean for the supply chain?
For brands the success of social media comes with problems. While marketing has now become completely real time, the supply chain lags behind. Brands are challenged to hold the consumer’s interest between seasons, resulting in a shortened lifespan for products in a world where the consumer expects an instant ‘status update’. This brings challenges to the traditional supply chain which now needs to focus on compressing the delivery time to as near to ‘real time’ as possible. In the future, it may be social media that drives a trend for rapid response onshore production, and not necessarily just the continuation of rising overseas labour costs.
Social media has shifted the apparel industry from being a market-driven economy to a consumer-driven economy, and a big part of this is the smart phone. Facebook reports that more than 50% of its activity now occurs via their mobile app. More importantly for business, social media has enabled them to leverage relationships with the consumer (B2C); as well as improve business to business (B2B) correspondence, helping companies build brand and product awareness, as well as drive value and revenue at every point in the supply chain.
From a business standpoint over 90% of organizations report higher revenues, better access to knowledge and lower costs of doing business by using social media. Moreover 81% of the US online population trust blogs as a source of product information.
Social Media Helps Strengthen Global Brands
In November last year a global viral campaign meant that the Versace collection created for H&M (Hennes & Mauritz) sold out in just 20 minutes; something that a traditional marketing campaign could never have achieved. Social Media means today’s designers can display their collections in real time.
New technology like live streaming and digital-only fashion shows have made the logistics of attending the international fashion weeks a lot easier. Buyers are now able to view a show on their tablet wherever they are in the world.
Social Media can also be globally local as well as international globally; for example Facebook is available in numerous languages and content is locally created giving a feeling of community. Facebook growth has peaked in the USA and parts of Europe, however it has grown by 318% in Brazil and 150% in India over the past 12 months; showing that for brands and retailers selling into these markets, Facebook is stilll an important platform.
However if your brand is selling internationally you need to be aware of ‘local networks’ such as Japan’s Mixi, the Netherlands’ Hyves and Germany’s business network Xing. China is an obvious gap on the Facebook map, but even if it is allowed to gain a foothold in the world’s most popular nation, there are already two hugely popular networks in the country; Qzone and Renren. Russia, another major market, is dominated by Vkontakte and Odnoklassniki, pushing Facebook into third place. Brazil and India are dominated by Orkut, which in both countries will be overtaken by Facebook in 2012.
Twitter is catching up with Facebook in the United States, predicted to grow four times as fast this year. The social media platform has also used crowdsourcing to add new languages at a rapid rate including Arabic, in order for the network to expand its reach.
From a B2B standpoint LinkedIn is widely used among professionals as a tool for international business networking. A similar network, Xing, has a large number of followers among users in Northern Europe. While Google +, a newcomer to the social media scene, allows users to distinguish between colleagues, friends and family by placing them into separate “circles”.
LinkedIn’s unique data is set with over 150+ million members, representing professionals from every country in the world, including several million in Africa and a strong presence in Asia and Latin America. What makes LinkedIn so powerful is the ability to download your connection’s personal contact details to your company database, which makes the service number one for the generation of leads.
Content as Commerce
For retailers a winning strategy is to blur the lines between traditional media content and commerce. Working with content to commerce sites such as Shopstyle and Lucky are one way of doing things. Retailers and brands are also making use of Pinterest, which has been very successful for brands that are creative with their product to avoid overt ‘advertising’.
Pinterest is a moodboard site entirely made of user generated content and has begun to leverage affiliate revenue from click-throughs. The site was launched in 2009, and in February 2012 it was reported on Mashable.com, that Pinterest had a 2,702.2% increase in unique visitors since May 2011. They are also working to expand the platform to the iPad.
Shopstyle is a magazine on style that brings all the stores you love into one place. Editorial moodboards are created and the shopper is guided to where the item can be purchased. This is guided shopping and not advertising. The US site Lucky which works on a similar principle are trying to leverage this content into a commerce opportunity; a simple algorithm can determine which partners are driving clicks and which partners are driving sales.
While the traditional printed fashion magazine dies a slow death, the tablet apps are bringing back the whole idea of ‘catalogues’ interactive e-reader style complete with tactile turning pages. Magazines take content into commerce, bringing a whole new way of online shopping without advertising direct to the consumer.
For retailers and brands the objective is to get consumers addicted to your content by making your site as ‘sticky’ as possible, and leverage this knowledge into a scalable program that drives specific business objectives by using consumer-centric content.
Polyvore teamed up with Procter & Gamble’s Cover Girl to produce Polyvore live for Mercedes Benz Fashion Week. The show was live streamed on their site and more than 25,000 people tuned in. Polyvore which ended its first profitable year in 2011 attracts 13 million unique visitors each month; a 114% increase since January 2011 and a reach beyond the traffic of any magazine.
Leveraging the consumer’s taste graph is rising in popularity. Bergdorf Goodman, for example, used Hunch to power its gift finding app during the holidays. Lyst hosted a collection making contest with Neiman Marcus, which resulted in driving shoppers to NeimanMarcus.com. As these platforms go mobile, they can help bridge the online and in-store experience.
Bergdorf Goodman smartly equips their in-store sales staff with iPhones so they are tapped into what’s happening with the brand online. This means that when a customer reads a blog article that features a specific product, the sales associate can pull it up on the spot to help locate it.
Luxury fashion designer Oscar de la Renta has also used social media to leverage the brands more affordable style options. Oscar de la Renta have started hosting Facebook sales allowing them to reach a new audience without alienating their traditional customers.
Dior also just launched a web magazine which combines content with commerce. One of the magazines’ first features was a live stream of its Paris Fashion Week presentation.
Michael Kors is experimenting with Pinterest under the strapline ‘Pins from the mind of Michael Kors’; giving the impression that this is the designer’s personal pinboard.
Brick and mortar retail uses solutions such as Foursquare to bring people into store. Louis Vuitton is the number one fashion brand using Foursquare. Location based social networking helps increase footfall by using mobile devices, such as smartphones. Foursquare users get sent text messages on brands and retailers that they might like to visit nearby to their current location. Foursquare utilizes GPS hardware in the mobile device.
Similar to Foursquare is SCVNGR; a social location-based gaming platform for mobile phones. The application has both a consumer and enterprise component. Organisations build challenges enabling players to earn points by going to sponsors’ outlets and completing challenges which they broadcast through Facebook and Twitter. By doing challenges, players can unlock real-world rewards and discounts.
Payment goes Social
The payment revolution is coming and soon both shopping and payment could both be mobile and Apple is leading the way with its iOS platform. The iPad, loaded with the new Square Register app, offers a number of business-friendly features that replace traditional card-processing services. Card companies receive roughly 3-20% per transaction. Square just takes a 2.75% cut of every transaction swiped through the iPad, a reduction in expenses for many retailers. PayPal recently announced that it is launching its own card reader and app for iOS. It joins a sector that also includes big players like VeriFone’s Payware and Intuit’s GoPayment. According to Forrester’s research, the target market for these products are small retailers; allowing businesses to capture revenue that previously could have been missed altogether if the consumer didn’t have cash.
Google also has entered the wireless-payment market by introducing Google Wallet; an Android app that makes your phone your wallet. It stores virtual versions of your existing plastic cards on your phone allowing the user to pay using near field communication technology. Social payment also enables Google to share offers and promotions with the user at the point of sale. LevelUp which markets itself as the better way to pay, works in a similar way and is operated by SCVNGR is a social location based gaming platform for mobile phones.
Some estimates put the annual value to companies in the mobile payments industry at a total of USD$44 billion by just 2015; making it a compelling area for investment.
Fiona is a panellist at the prestigious Primesource Forum in Hong Kong 28th-30th March 2012.
The power of the internet and social networking on branding and retailing
Moderator: Mr. Egidio ZARRELLA, Senior Partner, Advisory KPMG
Mr. Anthony CHOW, CEO, Otto Group China
Ms. Fiona JENVEY, CEO, Mudpie
Dr. Holger SCHNEIDER, Head of E-Commerce Programme,
FH Wedel – University of Applied Science; Otto Group Endowed Professor for E-Commerce
Mr. Thibault VILLET, Co-founder and CEO, Glamour Sales China