Social media strategy and risk management for retail companies

¶ … business2community.com/social-media/2012s-ten-worst-social-media-Disaster-0370309

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

Introduction

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, Ice.com, 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 work for social media and numerous social media platforms make the issue of managing social media complicated." This point is also made by McGriff (2012, p. 49) who writes, "The emergence of social media platforms has expanded the communications reach of consumers who have become increasingly vocal through boycotts about the misdeeds or malfeasance of companies that market products or retail brands." In the past, companies have enjoyed exclusivity over communications control to improve brand equity; the emergence of interactive two-way online communications such as social media sites have exploded in growth in recent years, and it remains unclear just how much more growth the medium will experience before saturation levels are reached (McGriff 2012). According to McGriff (2012, p. 50), "The growth of the social media platform poses immediate communications challenges in the management of brand image and reputation."

Furthermore, the relative newness of social media resources has resulted in some mixed reports from the field as to the effectiveness of this medium for building brand image and growing a company's customer base. According to Fluss (2012, p. 10), "There are so many misconceptions in the market about using social media, many of which are due to the newness of the solutions. We all have seen and read vendor claims that make their solutions sound too good to be true, and, more often than not, the promises do not match up with the actual performance." Likewise, De Laurentis (2012) cites the proliferation of social media sites and the growing hyperbole concerning the impact of social networking and social media on business. According to DeLaurentis (2012, p. 46), "Many organizations have been slow to adopt its use, doubting its practical value for business. And, among those who have adopted, many lack the strategy for leveraging the capabilities of these tools to elevate business results or for understanding how to measure success."

Another problem that has adversely affected the take-up rate and effectiveness of social media sites for many retailers is the manner in which retailers have applied the media for their own purposes which may ignore the real power of these media. In this regard, Liyakasa (2012, 45) reports that, "The fundamental issue in retail, still, is that most organizations don't really start with the customer experience and work backwards. They start with their own, internal perspective of a channel and they see the customer through individual customer lenses, which doesn't actually reflect how customers buy these days." Therefore, understanding how consumers actually go about making their purchase decision in a dynamic marketplace represents a timely and valuable enterprise. As Liyakasa (2012, p. 45) points out, "A top challenge for retail brands will be to connect the many dots that characterize their in-store, online, mobile, and social presence. There's a significant amount of consumer empowerment that results from new technologies, including social media and the smartphone that everybody has." Furthermore, there remains a lack of relevant studies concerning other aspects of social media use by retailers in this changing environment, particularly in an increasingly globalized marketplace where cross-cultural factors must be taken into account when formulating marketing plans,. As Liyakasa (2012, p. 46) emphasizes, "Then there are cultural and social factors, in particular, how consumers interact with each other, the brand, and the stores themselves. That is changing significantly."

Although the situation is dynamic, there are some constants that are involved that will inevitably influence how consumers use social media content presented by retailers. For instance, Kunz and Hackworth (2011, p. 2) report that "Results of research conducted by a team of Fellows of the Society for New Communication Research found evidence to support the significance of social networking to current promotional mix decisions." Perhaps the most compelling aspect of social media for retailers is the value consumers attribute to the recommendations and testimonials of their friends, colleagues, family members and members of communities of interest in formulating their purchase decisions. As Kunz and Hackworth (2012, p. 2) point out, "While the economy has changed the way consumers shop, and how they spend, what has not changed is that consumers trust the opinions of friends and family, as well as people they do not know, usually more than anything the retailer has to say about the company or their products."

In addition, Geho and Dangelo (2012, p. 62) also note that companies of all sizes and types face a number of challenges in their businesses operations, especially "maximizing the marketing potential of social media while at the same time being able to measure cost benefits." According to these authorities, "Traditional marketing methods can no longer sustain a business. Businesses have been aware for the past few years that social connectivity was becoming the key to marketing. However, the time, effort, usefulness and ability to measure outcomes made using social media for marketing impracticable" (Geho & Dangelo 2012, p. 62). The introduction of various analytical tools, though, has made projecting and measuring the effectiveness of social media sites more cost effective. In this regard, Geho and Dangelo (2012, p. 63) emphasize that, "Entrepreneurs are finding that they can now not only take advantage of social media as a marketing tool but use data to optimize their social media marketing campaigns." These are vitally important issues in a changing marketing landscape where growing numbers of consumers are doing their shopping online. In fact, fully 60% of consumers who use three or more digital methods for researching their product purchases report learning about a specific retailer or brand from a social networking site (Geho & Dangelo 2012). As Geho and Dangelo (2012, p. 62) emphasize, "This statistic, and a host of others, serves to prove that tried and true social networking sites like Twitter, Facebook, Foursquare, LinkedIn, and newcomers Google+ and Tumblr are here to stay. Furthermore, they are influencing the way consumers buy products and services." Therefore, identifying opportunities to achieve business goals using social media represents a timely and valuable enterprise as discussed further below.

Aims and Objectives

The overarching aim of this study was to develop a set of best practices for using social media for business applications in general and retail operations in particular. In support of this aim, the study was guided by several objectives as follows:

1. Deliver a comprehensive and critical analysis of the relevant secondary peer-reviewed and scholarly literature concerning the concept of social business in general and social business with retailers and their use of social media for business applications;

2. Provide an informed synthesis of the research that addresses the study's overarching aim; and,

3. Develop a series of recommendations concerning a set of best practices that business managers can use to guide their use of social media to achieve their organizational goals.

The final objective is congruent with the guidance provided by Vernon (2002, p. 21) who advises best practices are "ways of conducting business processes that are generally agreed to be the most efficient or effective. The argument is that best practice in processes is what delivers improvements in the most important business indicator, customer satisfaction."

Literature Review

Concept of Social Business

There is a growing trend towards the use of social businesses to achieve a specific social objective, but it differs from traditional for-profit enterprises such as retailers. For instance, according to Yunus, Ariail, Banik, et al. (2012), "While similar to the typical for-profit corporation, the social business has a different goal-instead of striving to maximize profits, the goal is to maximize the social good provided by the business" (p. 98). In contrast to conventional businesses where the main priority is on profit maximization, whereby shareholder return on investment is also maximized (Yunus et al., 2012). Because profit maximization is the overarching goal for conventional businesses, founders can select the business model that is most suitable for this purpose. Social businesses, though, are founded and operated in a different fashion. In this regard, Yunus et al. report that, "In a social business, you start out to solve a problem, and you design a business for that purpose" (2012, p. 99).

Another major difference between conventional businesses and social businesses is that shareholders are expected to be patient while the company becomes profitable. As Yunus and his associates point out, "Investors in a social business must have a space or time where they can wait for the return of their investment -- and finally it should break even" (2012, p. 99). Some retailers, though, have embraced the social business model and have leveraged it into increased profitability, including the Elvis & Kresse Organisation (EaKo) which takes industrial waste materials, turns them into stylish luggage and hand bags and gives half the profits to the UK Fire Fighters Charity (Ghalib & Hossain, 2009). Integrating social business into a retailing business model is more difficult that just slapping on a set of goals and principles and waiting for results to happen, and these issues are discussed further below.

Concept of Social Business with Retailers

Integrating social business goals into an existing business model or launching a new social business today inevitably involves the utilization of social media because of its law cost and widespread use. Generally speaking, social technologies include any type of technology that facilitates social interactions and a communications capability such as a mobile device or the Internet (Suby 2013). Although there is no universally accepted definition, Lafferman (2012, p. 199) defines social media as "referring to more typical social media platforms and features that are considered general characteristics of these widely used services."

Typical characteristics of social media include (a) a viewable profile listing; (b) personal characteristics and preferences, (c) some type of viewable list of contacts or "friends," and the capability of one social media user to post comments or statements on the profile of another user (Lafferman 2012). In addition, Lafferman (2012, p. 200) notes that, "Social media platforms may also include some more advanced characteristics, most notably video and photo sharing capabilities. The defining feature of social media is the fact that users can modify their privacy settings to allow or restrict public access to their pages."

Some examples of social software that can be used for social business applications include wikis, blogs, and social networks and communication capabilities as well as Web conferencing technologies that are used to facilitate social interactions (Suby 2013). Likewise, because the terms "social media" and "social networks" are frequency used interchangeably, it is important to distinguish between the two types of media. The definition provided by Edosomwan, Prakasan, Kouame, Watson and Seymour (2011, p. 79) states that social media are "forms of electronic communication (as Web sites for social networking and blogging) through which users create online communities to share information, ideas, personal messages, and other content (as videos)." By contrast, according to Edosomanwan and his associates (2011, p. 79), social networking is "the exchange of information or services among individuals, groups, or institutions; specifically: the cultivation of productive relationships for employment or business."

The main distinction, then, between social media and social network is the use of a computer-mediated forum of some type to facilitate communications by social media sites. Therefore, social networks may or may not also be social media, depending on whether these groups use the Internet or other telecommunications to communicate with fellow members; however, the overwhelming majority of social networks employ computer-media forums of some type so this distinction is less descriptive and appropriate (Edosomanwan et al. 2011). According to Edosomanwan et al. (2011, p. 79), "Social media can be called a strategy and an outlet for broadcasting, while social networking is a tool and a utility for connecting with others." Another difference between the social media and social networks concerns the manner in which communications are carried out. In the case of social media is "still a media which is primarily used to transmit or share information with a broad audience, while social networking is an act of engagement as people with common interests associate together and build relationships through community" (Edosomanwan et al. 2011, p. 79). In other words, a social media site is a venue where like-minded enthusiasts can visit and leave messages for each other, but this is not the same as social networking where two-way communications are the norm (Edosomanwan et al. 2011).

A final distinction between social media and social networks concerns the amount of time and investment required to operate them effectively. In this regard, Edosomanwan et al. (2011) emphasize that, "Social media is hard work, and it takes time in which you can't automate individual conversations; whereas, social networking is direct communication between the user and the people that he chooses to connect with."

Certainly, social networks are not new and have been manifest in guilds, unions, trade associations and so forth for millennia. Likewise, although not dating to antiquity, social media are also not a modern trend but rather date back to the introduction of telegraphs and subsequently radio and telephones that allowed communication over long distances (Edosomanwan et al. 2011). During the late 20th century, social media received a major boost with the introduction of the Internet but there was some use of computer technologies such as the bulletin board system and Usenet for social media prior to the Internet as well (Edosomanwan et al. 2011). By the 1990s, a number of social media sites had emerged, including Six Degrees, BlackPlanet, Asian Avenue, and MoveOn (Edosomanwan et al. 2011).

In addition, other social media sites have emerged during the 1990s that paved the way for today's leaders such as Facebook (discussed further below). For instance, Edosomanwan et al. (2011, p. 80) report that during the 1990s, "Blogging services such as Blogger and Epinions were created. Epinions is a site where consumers can read or create reviews of products. ThirdVoice and Napster were two software applications created in the 90s that have since been removed from the market." ThirdVoice in particular was found to be an objectionable social media platform because it allowed users to post comments on other Web pages and there was a high degree of slanderous and vulgar feedback (Edosomanwan et al. 2011).

By the fin de siecle, social media were experiencing truly explosive growth, with communities of interest being formed for a wide range of vocations and avocations. In this regard, Edosomanwan et al. (2011, p. 80) emphasize that, "This highly boosted and transformed the interaction of individuals and organizations who share common interest in music, education, movies, and friendship, based on social networking." During the early 2000s, social media sites that were launched included six degrees, LunarStorm, ryze, cyworld, and the open-source encyclopedia, Wikipedia (Edosomanwan et al. 2011).. In addition, sky blog, fotolog, and Friendster were launched in 2001 and MySpace, Linkedln, lastFM, tribe.net, Hi5 etc. appeared in 2003 (Edosomanwan et al. 2011). By 2004, Facebook, Dogster and Mixi had been launched and by 2005, Yahoo!360, YouTube, cyword, and Black planet were all attracting growing numbers of users (Edosomanwan et al. 2011).

Today, some of the most popular social media sites include MySpace, Facebook, and YouTube and others which are described further in Table 1 below.

Table 1

Current Popular Social Media Sites

Social Media Site

Description

MySpace

This is a social networking website with headquarters in Beverly Hills, California, where it shares a building with its owner, News Corporation. In 2006, MySpace became the most popular social networking website in the United States but was overtaken in 2008 by its competitor, Facebook, which became the most popular social networking site worldwide. Approximately 43.2 million users visit MySpace on a monthly basis. The company employs approximately 1,000 employees. A unique feature of MySpace is the ability for users to customize their profile information to give detailed information about themselves and what they are interested in. MySpace also has a special profile for musical artists were they can download their entire music into mp3 songs. According to this social media's Web site: "Myspace is a social networking service with a strong music emphasis owned by Specific Media LLC and pop music singer and actor Justin Timberlake" (About MySpace 2013, p. 2).

Facebook

Facebook is a social networking website launched in February 2004, and it is privately operated by Facebook, Inc. Facebook was founded by Mark Zuckerberg and others when he was a student at Harvard; though when the site was initially launched, it was restricted to Harvard students only. Later the privilege was extended to high school students and later to everyone that is 13 years or older. As of July 2010, Facebook has more than 500 million active users. In January 2009, Facebook was ranked as the most used social network worldwide. In May 2010, Google announced that more people visited Facebook than any other website in the world. It declares that this was discovered from findings on 1,000 sites across the world. Facebook users can create a personal profile; add other users as friends, and exchange messages, including automatic notifications, photos and comments when they update their profile. Additionally, Facebook users may join common interest user groups, organized by workplace, school, college, or other characteristics. Facebook allows anyone who is at least 13 years old to become a registered user of the website. On a daily basis, traffic to Facebook network is on the rise. Facebook also became the top social network across eight individual markets in Asia (the Philippines, Australia, Indonesia, Malaysia, Singapore, New Zealand, Hong Kong and Vietnam). On October 24, 2007, Microsoft announced that it had purchased a 1 .6% share of Facebook for $240 million, giving Facebook a total implied value of around $15 billion. Microsoft's purchase included rights to place international ads on Facebook; other companies have equally followed suit. For example, just during the 2010 FIFA football world cup, Nike placed an ad with Facebook, and within minutes, an average of 8 million viewers had registered with Facebook. In 2011, more than 120 million active users made Facebook the fourth most-trafficked website in the world and is currently visited by 3 in 10 people each month and has more than 75 million members in more than 80 countries. Facebook reports that there are more than 28 million pieces of content (web links, news stories, blog posts, notes, photos, etc.) shared each month. Up to 59% of leading the 100 retailers are now using Facebook through the use of fan pages. These retailers have recognized the need to focus on what customers are looking for on a site, what the company wants to communicate, and the role the fan page can play in communicating their message. The actual number of retailers on Facebook doubled in only five months. The 2009 Internet Retailer's Top 500 Guide shows that 56.8% of all retailers, or 284 companies, had a presence on the social networking site Facebook.com, including 70 of the top 100 (Kunz & Hackworth 2011, p. 3).

YouTube

YouTube, founded in 2005, is the world's most popular online video community, where millions of people can discover, watch and share originally-created videos. YouTube provides a forum for people to connect, inform, and inspire others across the globe and acts as a major distribution platform for original content creators and advertisers, large and small (About YouTube 2013). YouTube is based in San Bruno, California and uses Adobe Flash Video technology to display a wide variety of user-generated video content, including movie clips, TV clips, and music videos, as well as amateur content such as video blogging and short original videos. In November 2006, within a year of its launch, YouTube was purchased by Google Inc. In a high-profile acquisition. To date, YouTube has entered into a number of partnership relations with content providers such as CBS, BBC, Universal Music Group, Sony Music Group, Warner Music Group, NBA, The Sundance Channel and many others. YouTube offered the public a beta site of the site in May 2005, six months before the official launch in November 2005. The site grew rapidly, and in July 2006, the company announced that more than 65,000 new videos were being uploaded every day, and that the site was receiving 100 million video views per day.

Twitter

Twitter came into existence in 2006 just as Facebook began to open its doors to everyone. Twitter gained a lot of popularity first because it offered more different options such as micro blogging. It is important to note, though, that Twitter may have been overrated as evidenced by the plateau of tweets for most brands and companies on the site (Kunz & Hackworth 2011, p. 3). Although the jury is still out concerning the relative popularity of this social media site compared to the other major actors, the trends that were prevalent in 2012 indicate that Twitter is better suited for some applications than others for retailers. In this regard, Kunz and Hackworth (2011, p. 3) add that, "Rather, interest by followers and tweets seems to be focused on celebrities, rather than brands and companies. Twitter may be effective for mining what conversations and tweets are saying about the brand, but it is not terribly effective for marketing messages." The unique draw of Twitter may also limit the ability of major retailers to use this social media site for advantageously than, say, Facebook. According to Kunz and Hackworth (2011, p. 3), "While Dell and BestBuy have used Twitter effectively to improve customer service and offer especially hard-hitting deals and promotions, it appears that Twitter may be more effective for up-and-coming brands/companies, rather than well-established corporations."

Ping.fm

This site was created in 2008 and was defined as "the auto magic" micro blogging and networking web service that enables users to post to multiple social networks simultaneously. This social media site now operates through Twitter.

Net log

Formerly known as Facebox and Bingbox, this site was launched in 2009 and is a Belgian social networking website specifically targeted at the European youth demographic.

Google Buzz and Google Plus

Launched in 2009, Google buzz was a social networking and messaging tool that integrated a Web-based email program that worked through the popular Gmail service allowing users to post status updates, photos and links to members of their network, as well as pull in their activity on other sites like Twitter or Facebook. This original social media effort, though, was a failure. According to Harden and Sherry (2012, p. 207), "Even online giant Google experienced a failure with its initial entry into the social networking arena, Google Buzz. The company reached a settlement with the U.S. Federal Trade Commission in 2010 as a result of charges that Google was violating its own privacy policies and agreed to twenty years of privacy policy audits by the government. Undaunted, Google is trying again with Google+ and is experiencing a surging growth with its latest SNS offering, going from 40 million users in October 2011 to over 90 million in January 2012."

Pinterest

Headquartered in San Francisco, California, this social media site allows members to post and share pictures of mutual interest. According to Liyakasa (2012, p. 48), "Pinterest is a perfect case in point of [the melding of] personal relationship, engagement, emotional connection, and content. Why are people all fired up about it? Because it becomes meaningful for them and, by the way, it has credibility."

Kaboodle

Pinterest grew from just 5,000 users in August 2010 to 17 million in April 2012 (Carlson 2012), and more than 8 million of them use the site at least once a month (About Kaboodle 2013). According to this social media's Web site: "Over 8 million visitors are using Kaboodle.com each month to discover new trends, shop for their favorite products and share their unique style through personal styleboards, product lists, blogs and more. Launched in 2007, Kaboodle is the social shopping pioneer, a one-of-a-kind resource that gives users the ability to explore looks, play stylist, write blogs and create polls all while communicating with fellow friends and stylistas." Although Barnes & Noble, BestBuy, Dell, Home Depot, JC Penney, Kohl's, Lowe's, Macy's, Neiman Marcus, QVC, Sears, Target and Walmart all employed more than one social network in their marketing initiatives, only department stores JC Penney and Macy's participated on Kaboodle (Kunz & Hackworth 2011, p. 3). Kaboodle's Web site states that: (a) With 12 million products (and growing), and 1.9 million registered users curating, shopping and sharing their styleboards, blogs and polls, Kaboodle has become the premier destination for documenting, sharing and purchasing favorite looks, trends and merchandise online. (b) Kaboodle's interactive nature allows for users to design their own styleboards, write blogs, and create product lists as well as design personal polls for input on what to buy and what to wear. Best of all, everything is set up to be shopped, distributed and emailed through social media. "Kaboodlers" create and then share their ideas, blogs, styleboards and lists with other community members, creating a personalized, relevant and incomparable social shopping experience. (c) Inspire and be inspired with access to over 12 million products, turn-key creative tools, countless looks and innovative ideas that are continuously being updated. As an ever-evolving site, Kaboodle offers fresh, new perspectives on a daily basis. In addition to its curated blogs, styleboards, polls and product lists, 'Kaboodlers' also gain access to original content from sister site StyleSpot.com, providing them with additional images, style resources and trend-driven ideas. (d) Bridging the gap between social media and personal interest, 'Kaboodlers' can shop together using a simple video-chat tool; receive sales alerts when items from their lists and styleboards go on sale; and save items for later to review in their "Love it" section, as well click the 'Add it' button to bring something into their personal domain. There is no easier way to keep track of what you want to buy." Finally, Kaboodle's online guidance for retailers states that: "Kaboodle is the largest and fastest-growing social shopping community on the web. Kaboodle's powerful shopping tools allow people to organize their items through lists, discover new things from people with similar style, get discounts on popular products, and find best prices. At the heart of Kaboodle is a fun and engaging community of people who love to shop. Community members create and join groups, share advice, feedback and product suggestions, and personalize their profiles with polls and other widgets."

Source: Adapted from Edosomanwan et al. 2011, p. 81 unless otherwise indicated

Today, the types and uses of the foregoing social media and others remain highly dynamic. Currently, blogs, microblogs, and social networking sites are among the most popular social media tools that have emerged in recent years; however, other social media tools including photo sharing sites, virtual world games and information management sites are also commonly used (Kimball & Kim 2013). A brief description of these different types of social media content is set forth in Table 2 below.

Table 2

Different Types of Social Media Content

Social Media Type

Description

Blogs

Short for web logs, these are websites that are designed to facilitate users' entries in chronological order. The entries are then displayed in reverse chronological order and are usually archived on a periodic basis. Blogs are mostly used to express opinions on topical events such as sports or politics, but in the past few years they have emerged as established communication channels for businesses as well as individuals. Blogs are often distributed to other sites or readers using Really Simple Syndication

Bring your own device (BYOD)

This type of content represents a strategy allowing employees, business partners, and other users to employ personally selected and purchased client devices such as cell phones, tablets, and laptop computers to execute enterprise applications and access data.

Collaborative/peer editing

This type of content allows groups of people to edit the same document simultaneously. This can be done face-to-face or remotely using collaborative tools such as instant messaging (IM), breakout rooms, application sharing, and whiteboards. Collaborative editing can also be accomplished asynchronously via tools such as discussion boards, change-tracking, and e-mail. Collaborative / peer editing assignments can include projects, papers, presentations, and wikis.

Mashups

These are web-based aggregations of content from different online sources that leverage consumer-oriented sites to create a new service. Mashups rely partly on data and services from public websites, such as Google Maps, Craigslist, eBay, Amazon.com, and others. An example is a program that pulls job listings from one site and displays them on a Google map to show job locations

Microblogging

This is a form of multimedia blogging (such as Twitter) that allows users to send and publish brief text updates of up to 140 characters or micromedia such as photos or audio clips, either to be viewed by anyone or by a restricted group chosen by the user. Authors and journalists can use microblogs to drive awareness of new posts, articles, announcements, and so forth.

Source: Adapted from Suby (2013, p. 144)

Social Media and Retailing

At present, social media sites are being used in different ways by retailers to promote their brand and grow their market share. The types of social media business activities that are most common are set forth in Table 3 and depicted graphically in Figure 1 below.

Table 3

Most Common Social Media Business Activities

Activity

Percentage of Use

Marketing

76%

Customer service

63%

Corporate communications/Public relations

53%

Contact center

37%

Sales

34%

Executive communications

18%

Investor relations

17%

Crisis management

12%

Other

2%

Source: Fluss (2012, p. 11)

Figure 1. Most Common Social Media Business Activities

Source: Based on tabular data in Fluss (2012, p. 11)

The different types of information that consumers collect from their visits to social media sites include those set forth in Table 4 below.

Table 4

Information Gleaned from Social Media Interactions

Type of Information

Percentage

Positive/negative sentiment

77%

Issues with products or services

70%

Requests for more information regarding

company, products, services, or procedures

66%

Complaints or follow-ups regarding previous customer service interactions

60%

Issues with procedures

45%

Crisis identification

43%

Sales leads

42%

Number of fans/followers/likes*

38%

Complaints or questions regarding marketing campaigns

34%

Competitive information

34%

New product ideas

32%

Size and scope of various issues and concerns

32%

Volume trends regarding types and channels of comments and inquiries

28%

Other

12%

Source: Fluss (2012, p. 11)

*According to Brankin (2011, p. 6), "Social media websites can help to identify consumers' interests, such as which businesses and brands they follow. When consumers 'like' a product or company on Facebook, it can generate significant brand presence and strength. And that gives marketers an inside track to target those consumers." Taken together, it is clear that social media users have a wide array of services and content types to select from, each of which has its own respective benefits. As Kunz and Hackworth (2011, p. 3) point out, "The challenge for companies is learning how to use social networks to the greatest benefit."

Given their global reach and cost effectiveness, there are a number of benefits that business can achieve using social media that can help define best practices. For instance, Lafferman (2012, p. 202 reports that, "Social media provide an important benefit to society. For example, social media has played a pivotal role in political campaigns in the United States." Social media has also had global benefits. In this regard, Lafferman (2012, p. 203) adds that, "Social networks also had an important role in several political movements throughout the world, including most notably the Arab Spring. Most recently, social media use has helped proliferate information about the human rights violations in Syria."

Likewise, according to Suby (2011, p. 141), "The benefits of social media and social technologies have increased because emerging tools have extended the capacity of individuals and businesses to increase communication with peers, family, friends, colleagues, and customers." Moreover, the explosive growth in the use of social media has provided new opportunities for developing professional and personal relationships, expanding knowledge through participation in communities of interest and through the rapid dissemination of important issues of interest to develop best industry practices (Suby 2013). Indeed, Tertilis (2010, p. 57) emphasizes that, "It appears that every type of business has incorporated social media into its marketing plan. Social media has seen great progress, and it is very cheap." The results of a 2011 industry survey conducted by the Social Media Examiner of 3,342 marketers found that:

Overall, 90% of the marketers surveyed agreed with the statement "Is social media important to your business?" And 66% of small business owners strongly agreed with the statement.

80% of marketers indicated social media use generated more exposure for their business.

An increase in search engine rankings was seen by almost two-thirds of marketers.

Spending as little as six hours weekly generated leads for 52% of marketers, with small business owners more likely to strongly agree to the lead generation question.

59% of small business owners saw a reduction in marketing costs when social media were implemented.

Facebook, Twitter, Linkedln, and blogs dominated usage stats, with 92%, 84%, 71%, and 68%) respectively, with 78%> of small business owners indicating they were more likely to use Linkedln (Geho & Dangelo 2012, p. 37).

Likewise, a recent survey conducted by Verdict found that about half of consumers read others consumers' reviews while they are shopping online, and around 16% of these consumers have been influenced by these reviews to the extent that it affected their purchase decision (Subs 2010). According to Subs (2010, p. 8) "It is no longer about targeted email campaigns when brands are attempting to communicate with a younger audience - that is, those under the age of 35 [years]. It's about engendering loyalty through social media. Personalisation is becoming even more important. Getting people to join a Facebook page to get opinions, read reviews and learn about other shopper experiences is when the medium starts to get into its own."

A recent Nielsen survey that included 166 marketing professionals found that the majority of the respondents believed that the primary benefits of social media were (a) its ability to communicate directly with consumers, (b) to deliver knowledge about what customers want and (c) for increased brand engagement (Harnessing the Power of Social Media 2010). The Nielsen survey also found that more than a quarter (26%) of the respondents did not maintain a presence on social media Web sites. For those that did maintain a social media presence, the most popular site was Facebook (72), followed by YouTube (52), Twitter (50), and LinkedIn (44) as depicted graphically in Figure 2 below.

Figure 2. Most Popular Social Media Sites Identified by Niesen Survey

Source: Based on textual data in 'Harnessing the Power of Social Media' 2010

Particularly noteworthy was the finding of the Nielsen survey that more than 33% of the respondents reported that their companies did not have anyone assigned to oversee social media specifically, and a number of respondents reported their companies just used a single individual for this purpose with no coordination between other company departments (Harnessing the Power of Social Media 2010).

The results of a study by Skrhak (2010, p. 41) identified several benefits of social media for retailers, including the following:

1. Help establish brand;

2. Discuss a product personally;

3. Pitch products in a more human, two-way method;

4. Listen to customer opinion;

5. Answer customers directly;

6. Gather informal market research; and,

7. Garner trust by making business appear personal.

Taken together, these benefits are vitally important for companies of all sizes and types in an increasingly globalized marketplace, but these benefits do not just fall out of the sky but are rather the result of careful planning and oversight that takes into account the factors that must be considered as discussed further below.

Case Study Analysis and Discussion

The company selected for this case study was Gap, Inc. According to Wright (2007), Gap Inc. (hereinafter alternatively "the Gap" or "the company" is one of the largest specialty retailers in the world with more than 3,000 stores and revenues of $16 billion in fiscal year 2005. The company owns and operates four of the world's most recognizable apparel brands: Gap, Banana Republic, Old Navy, and Forth & Towne (Wright 2007). In addition, the Gap Inc. was awarded Business Ethics magazine's award for social reporting in 2003 (McCann & Wright 2007).

Today, the company is well situated to take advantage of its strong global brand as well. In this regard, Gregg and Gordon (2008, p. 84) emphasize that, "The brand-conscious children of today no longer wear hand-me down clothes and ask for a bicycle for Christmas. They want their own cellular phones and pagers, and designer jeans (preferably from Gap)."

According to Goldman (2013, p. 200), "Brands such Gap are increasingly collaborating with bloggers to develop new social marketing campaigns. For instance, a brand might invite a blogger to serve as a guest blogger or post a video of the blogger talking about the brand or using one of its products." It is important to note, though, that these initiatives can be expensive simply by virtue of the amount of time that is invested in them. In this regard, Goldman (2013, p. 200) adds that, "These sponsored campaigns can stretch over weeks or months. One of the more popular ways for brands to collaborate with bloggers has been to create limited-edition products." The success of the company's use of social media is attributable to their marketing initiatives that are closely aligned with the Gap's corporate goals. For instance, according to Goldman (2013, p. 157), "Targeted and subtlety are part of the allure of social marketing. If a traditional advertisement was a blind broadcast to the world about your product, then think of social media as a tap on your customer's shoulder."

Some analysts maintain that Gap is far ahead of its competitors in its use of social media. For example, following the decision by Gap to change its logo in October 2012, the company received 28,300,000 entries on Google for the "new gap logo" (Gap and Social Media -- A Perfect Fit? 2013). In fact, the response to the company's announcement was so strong that they cancelled the logo change plans (Gap and Social Media 2013).

Although the jury is still out concerning whether the media storm that followed their announcement was planned or not, what is known for certain is that Gap is using its social media presence for all it is worth. In this regard, the editors of New York Women in Communications point out that, "One thing is certain - people are engaged on an almost unprecedented level" (Gap and Social Media 2013, p. 2). It is especially noteworthy that the announcement concerning the proposed new logo for the company was posted on Gap's corporate Web site; however, the events that followed were all confined to social media resources. According to the editors, "What's interesting is that the new logo was debuted via Gap's website, the crowd-sourcing concept came via social media and finally, the official statement that they were retreating back to the classic blue box logo was also announced through social media platforms" (Gap and Social Media 2013, p. 3).

Some salient observations concerning Gap's proposed logo change and the social media response that resulted include the following:

1. "Say what you will about either logo, Gap's attempted rebranding has clearly re-energized its waning consumer base. It's a perfect storm that must be capitalized on. With consumers more attuned than ever to the brand, Gap now has a terrific opportunity to harness all their passion and engage them in a way that will drive sales. How Gap proceeds next will ultimately be the bigger story-whether or not they can translate this strong consumer connection to stores" -- Linda Kaplan Thaler, CEO & Chief Creative Officer, The Kaplan Thaler Group and President, New York Women In Communications.

2. "Gap is in a unique place to really leverage the organic conversations that are taking place through social media to crowd source ideas and designs for an updated consumer generated logo. It is admirable that they listened and made immediate changes, but in this case with such a vocal group of consumers the opportunity is to further engage them and create a series of conversations driving to a new design." -- Kendra Bracken-Ferguson, Partner, Digital Brand Architects and VP of Integrated Marketing Committee.

3. "In my view, it's not terrible that, after years in the doldrums, people are talking about the Gap. But, though listening to your customers is a sound PR strategy, it's not wise to give up control of your brand design. So, Gap's doing the right thing in moving away from a crowd sourced identity. Turning the classic blue logo red for the holidays, however, is an inspired idea." -- Dorothy Crenshaw, CEO and Creative Director, Crenshaw Communications.

These accolades were proffered even before the latest initiative by Gap to promote the use of its social media site in responsible ways. In this regard, Rudawsky (2012, p. 1) reports that "Gap, Inc., struggling to make its brands stand out in today's crowded marketplace, is turning its workforce loose on social media in an attempt to recreate some of the buzz for which it was known in the '80s and '90s." Recently, the company distributed corporate policy handbooks concerning the appropriate use of its social media resources to each of its more than 134,000 employees (Rudawsky 2012). According to Rudawksky (2012, p. 2), Gap's social media policy has three main categories: "Keep in mind," "How to be the best," and "Don't even think about it."

The guidelines, entitled "OMG you will never guess what happened at work today!," (see cover in Figure 3 below)

Figure 3. Cover of Gap, Inc.'s Social Media Policy, "OMG you will never guess what happened at work today!"

Source: Rudawksky (2012)

Although Gap's social media guidelines are not available to the public, some excerpts have been leaked that provide some indication of the tone and content. For instance, the brochure's introduction (2013, p. 2) stresses that, "These guidelines are important -- because if you don't follow them a few things could happen: your posts can get deleted, we could lose customers and investors, we could get in trouble, or, worst of all, you could even lose your job & #8230; So do the right thing, stick to the guidelines."

Some other representative excerpts from the social media brochure include the following wherein Gap employees are encouraged in "Keep in Mind":

1. There's really no such thing as "delete" on the Internet, so please -- think before you post.

2. Some subjects can invite a flame war. Be careful discussing things where emotions run high (e.g. politics and religion) and show respect for others' opinions.

3. It's a small world and we're a global company. Remember that what you say can be seen by customers and employees all over the world and something you say in one country might be inaccurate or offensive in another.

4. Respect other people's stuff. Just because something's online doesn't mean it's OK to copy it.

5. Your job comes first. Unless you are an authorized Social Media Manager, don't let social media affect your job performance.

With respect to "How to be the Best," Gap advises its employees:

1. Play nice. Be respectful and considerate, no trolling, troll baiting, or flaming anybody, even our competitors.

2. Be yourself. Be the first to out that you are a Gap Inc. employee -- and make it clear that you are not a company spokesperson.

3. If you #!%#@# up? Correct it immediately and be clear about what you've done to fix it. Contact the social media team if it's a real doozy.

4. Add value. Make sure your posts really add to the conversation. If it promotes Gap Inc.'s goals and values, supports our customers, improves or helps us sell products, or helps us do our jobs better, then you are adding value.

The brochure's final section, entitled "Don't even think about it…," includes the following guidance for Gap employees:

1. Talking about financial information, sales trends, strategies, forecasts, legal issues, future promotional activities.

2. Giving out personal information about customers or employees.

3. Posting confidential or non-public information.

4. Responding to an offensive or negative post by a customer. There's no winner in that game.

The personal and even chatty nature of the brochure makes the guidelines more accessible and understandable to all of the company's employees. These are important points since many smaller enterprises do not enjoy the same level of resources as Gap, but they can still formulate social media policies that are based on common sense and the Golden Rule. In this regard, Rudawsky (2012, p. 3) emphasizes that, "Gap Inc. has figured out a social media policy doesn't have to come from the legal department, and that a straightforward, conversational tone probably makes the greatest impact with employees. It covers everything, but it doesn't beat you over the head."

Currently, the company connects with consumers on a variety of social media sites, including Facebook, Twitter, YouTube and a corporate blog as set forth in Table 5 below.

Table 5

Gap's Social Media Presence and Goals

Medium

Goals

Facebook

• To build a community where customers and employees interact.

• To craft online identity, seed conversations, enhance reputation, and distribute exclusive marketing content.

Twitter

To talk to customers in real time, share content, answer questions, and lead followers to Facebook, corporate blogs, and YouTube.

YouTube

To showcase brand-appropriate video content and improve search engine results.

Corporate blog

• To enhance reputation with conversational posts linked to press releases, leader profiles, and relevant third-party content.

• To post leader messages, highlight corporate culture, and improve search engine results for positive content.

Source: Rudawsky (2012)

In reality, though, corporate executives at the Gap have not undertaken this heavy investment in social media without considering the long-term implications for the company's bottom line. For example, the executive vice president for Gap Inc. Direct, Ron Beegle, emphasizes that, "We talk about innovation a lot at the Gap. To keep up with some of the nimble startups, we had to change the way we do business. But we were still careful to play by the old rules: having structure, insisting on fiscal discipline, and developing a long-range plan ... Today we have a business that is built for the long haul, and one that is prepared to operate by the oldest business rule: Make money" (cited in Webber & Labarre 2009, p. 9).

To their credit, the company is in fact making money with their social media initiatives. For instance, an analysis of several major retailers' (Barnes & Noble, BestBuy, Dell, Home Depot, JC Penney, Kohl's, Lowe's, Macy's, Neiman Marcus, QVC, Sears, Target and WalMart) by Kunz and Hackworth (2011, p. 3) found that, "The use of Facebook status for these retailers is believed to be the reason for the large increases that were noticed in the population of fans on these retailers' respective fan pages. In order to have a successful Facebook page, retailers should take some advice from these retailers and use their Facebook status to communicate with their customers and create a strong relationship."

Conclusions

The research showed that Facebook, Google+, Linkedln, Twitter and YouTube are different types of social media that all facilitate real-time communications between people with shard interests in ways that were never before possible. The research also showed that growing numbers of consumers, perhaps even a majority, are turning to social media for conducting research concerning the projects and services they are interested in purchasing. Some of the benefits of social media for retailers included establishing their brand and trust with consumers; providing the ability to discuss products or services at the individual level; market products and services in a more casual, personal ways; gather customer feedback and other market research; as well as the ability to directly respond to consumers. One of the major constraints to launching and administering an effective social media site was shown to be the tendency for companies to consider a social media presence as simply an extension of their Web site, even to the point where the content on the Web site and social media site is identical with no regard for the interactive nature of the platform. Indeed, being able to gather feedback and respond to it in a timely fashion is one of the most powerful tools available through the use of social media resources. Social media sites are not intended to replace corporate Web sites but are rather intended to supplement them in strategic ways that are aligned with an organization's larger goals.

Recommendations

Based on the findings that emerged from the review of the relevant literature and the case study of Gap, inc., the following recommendations are provided:

1. Always be honest -- even if it hurts. If negative feedback on a company's social media site turns out to be substantiated, the company should admit its fault and describe what actions it is taking to remedy the situation and to preclude its recurrence in the future.

2. Assign a full-time staff member, preferably one from information technology, to oversee and respond to users' feedback on the social media site and pay him or her extra for the additional responsibility. Despite the recommendation from Gap, Inc. To not respond to negative feedback, timely responses for customer services purposes that solve the problem or address the issue are left on the social media site for all to see that the enterprise cares about its customers, what they have to say, and is eager to solve their problems.

3. Avoid tying marketing campaigns on social media sites to manmade and natural disasters or other inappropriate issues such as religion or cross-cultural differences at all costs.

4. Involve the company's customer service department in the development and administration of the social media site.

5. Provide clearly written guidelines for social media use for all employees who will be used these resources.