Social Business and Retailer essay

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Using contemporary illustrative examples from academic literature and reputable business publications, discuss the concept of "Social Business" and the resultant opportunity and challenges that are currently being faced by the retail industry globally.

Concept of Social Business

Concept of Social Business with Retailers

Social Media and Retailing

Best Practices in Administering Social Media

There is a growing body of research that confirms that companies of all sizes and types can realize a wide array of benefits from the use of social media networks. While the types and applications of social media experience constant change, social media content such as blogs and microblogs have become some of the more popular social media tools that have emerged in recent years. Although there a number of benefits and advantages that can be achieved through the use of social media resources, there is a concomitant danger that inappropriate or misguided content can backfire on a company, sometimes in irreversible ways. Therefore, identifying opportunities to improve the ability of companies of all sizes and types to achieve their organizational goals through the use of social media has assumed new relevance and importance. To this end, this study provides a review of the relevant peer-reviewed and scholarly literature concerning social media applications in general and social media applications for retailers in particular, followed by a case study of Gap, Inc.'s social media usage and a summary of the research and important findings concerning the use of social media in the study's conclusion.

Identifying Opportunities for Achieving Business Goals Using Social Media


In the traditional Hindu marriage ceremony, it is a very important moment when the bride places a garland around the groom's neck because this signifies the permanent union. From the groom's perspective, then, this garland may actually resemble a noose that signifies a loss of freedom rather than the gain of a wife. In the same fashion, business relationships are often seen from different perspectives by managers and consumers. Today, business relationships are being affected in fundamental ways by the introduction of social media networks that are increasingly being used by companies to promote their products and services. In far too many cases, though, the corporate decisions that are made concerning how to use this relatively new platform by business managers are misguided or misinformed, and the results can be less than optimal and even disastrous. For example, in Morris's article, "2012's Ten Worst Social Media Disasters," the point is made that some things such as manmade or natural disasters are just taboo and should not be exploited for marketing purposes.

Indeed, when companies seek to take advantage of disasters or other inappropriate events, they run the risk of alienating their consumers or even worse, sending them packing to their competitors. For instance, Griffiths and Howard (2008, p. 69) emphasize that, "There appears to be a general consensus in the literature that retailers can ill afford to ignore the internet completely. According to a Microsoft survey, a staggering 5 per cent of major retailers do not have an operational website, even for informational purposes. Those retailers without an online strategy have struggled vs. their competitors." There is also a growing consensus that social media sites provide a valuable addition to the communications channels available to retailers, but the process is not automatic or without its challenges. In this regard, Suby (2013, p. 140) emphasizes that, "The use of social media and other electronic communication has exploded as the number of social media outlets and applications continue to increase. These are exciting and valuable tools when used wisely, but pose risks when inappropriately used." Likewise, Kwon, Min, Geringer and Lim (2013) also cite the growing popularity of social media sites among young and old alike, but the average time young people in particular spend on social media has been steadily increasing. For example, Brown (2011, p. 16) reports that, "The use of social networking, gaming and video sites is among the most common activity of today's children and adolescents. [Fully] 22% of teenagers log on to their favorite social media site more than 10 times a day, and more than half of adolescents log on to a social media site more than once a day."

In addition, three-quarters of adolescents currently own mobile phones and a quarter of these young people use them to access social media sites (Brown 2011). As Brown (2011, p. 16) concludes, "Needless to say, social media has drastically altered our means of communication, especially among our youth- and this trend is growing." Older adults, though, are also using social media in increasing numbers. For example, Elefant (2011, p. 75) reports that, "A Pew Research report released in August 2010 showed that social media use of sites like Facebook and LinkedIn by adults aged fifty to sixty-four grew by a whopping 88% between April 2009 and May 2010."

Other, more recent, surveys place these respective Internet usage rates even higher. Indeed, Kent and Capello (2013) report that nearly two-thirds (65%) of educated, middle-class American Internet users between the age of 18 and 49 years routinely use some type of social networking service. Likewise, researchers have determined that fully 91% of all adult Internet users consult some type of social media service regularly (Kent & Capello 2013). In fact, the research that follows will show that virtually all social media sites that have been launched within the past few years have experienced staggering growth rates, and several continue to vie for leading positions in the industry.

These impressive usage rates clearly point to the increasing use of social media by retailers as part of their marketing communication strategy. According to Kunz and Hackworth (2011, p. 2), "The use of these sites became even more advantageous as many retailers implemented the benefits of the sites' applications during the holiday season in an effort to generate revenue during this struggling economy." A growing number of companies have also determined that social media involves connecting their consumers with like-minded users (Kunz & Hackworth 2011). In this regard, Kunz and Hackworth (2011, p. 2) emphasize that, "Companies such as American Eagle, Gap,, Victoria's Secret, Macy's and Nike have experimented and/or incorporated the use of social networking." Certainly, these social media initiatives have not been restricted to the United States, but extend throughout the international community. For instance, in the UK, Burberry, ASOS and Topshop have attracted the largest social media following (Subs 2010). According to Subs (2010, p. 8), "it was particularly important for brands to engage with Facebook and Twitter in relation to online shopping, because of the increasingly important role that such sites play in influencing consumers' online purchasing decisions."

Not surprisingly, these trends have attracted the attention of academicians and business analysts alike. For instance, according to Kwon and her associates (2013, p. 109), "Organizations, public or private, have realized the importance of social media as a powerful tool for establishing relationships with citizens or consumers." Similarly, Kimball and Kim (2013, p. 185) report that, "People use social media tools to report information, present opinions, and solicit conversation through their own domains or dedicated websites." Just as thousands of unexpected opportunities to use these emerging technologies have been identified as more and more retailers gain experience in the use of social media sites, it is reasonable to suggest that this growing expertise will lead to countless additional applications of social media for retailers. One of the most significant outcomes of these recent trends in social media use has been the leveling of the playing field for smaller enterprises. For instance, Goldman (2013, p. 159) concludes that, "What the Internet has done is democratize targeting, making it relatively simple to target on a small budget. Even a small company has the opportunity to target, using tools like Facebook's advertising platform."

The results of KPMG's 2012 Retail Outlook Survey determined that 58% of retail executives reported that they were planning to increase their capital spending during the coming year, with the most money being spent on information technology, particularly data analytics and digital marketing (Liyakasa 2012). According to Liyakasa (2012, p. 45), "When surveyed about digital marketing channels, 59% of the executives credit online shopping; 58%, social media platforms; and 49%, email campaigns, as having the most significant impact on their businesses." These figures are particularly noteworthy because social media resources are still in their relative infancy compared to traditional marketing methods, suggesting that far more benefits can be realized through the judicious use of these powerful resources.

Although the potential benefits that can be derived from the use of social media for business purposes are significant, there are some constraints and challenges involved in their use that must be taken into account or companies run the risk of being included on this year's list of "Social Media Disasters." In this regard, Kwon et al. (2013, p. 110) emphasize that, "Organizations face a big challenge in taking advantage of social media, since the old way of managing traditional media does not…[continue]

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