If you are one of the 1 billion people on Facebook, or the 500 million people on Twitter, or the 27 million people on Pinterest, you may see some of these types of comments from consumers while engaging with retailers and manufacturers:
“What’s up with your web page??? I have tried to shop off a wish list & have been thrown off with an error 404. Two days of this. Someone please check.”
“[Brand] says they are now being carried in your stores. Please tell me you have them in your [store name]!!!! These are great for kids with nut allergies.”
“Per your customer service, they do not need to have an item in stock when they run a promotional ad…so if they run free item with purchase, they will run it while they knowingly DO NOT have the item in stock. I will be returning ALL of my purchases from you, not just the one I was scammed on.”
“I’ve been meaning to write this – why, oh why, did you ruin your (cake) recipe?? Sorry, but it’s true….I’ve been eating it since I was 6 – I’m 38 now. Please go back to your original recipe. The new one doesn’t compare with the original one.”
These are just a few of the many comments on social media channels. It is clear that consumers are taking to these channels to not only interact personally with friends, but also to discuss, share and interact with the retailers and brands they associate with. So, what are supply chain professionals doing with this information? Unfortunately, not much.
JDA recently surveyed 77 companies across all industries including manufacturing, retail, and wholesale/distribution, and the results show that most companies are leveraging key inputs into the demand plan such as marketing data, syndicated data, POS and ordering patterns; however, only one percent of these companies are doing anything with social media for supply chain planning. Is this response due to the fact that people don’t see the value, or are they simply not aware of the potential?
Social media comments about products, services, or companies offer very valuable information for the supply chain and associated processes. The challenge for any company is figuring out how to gather this data, consume it, respond to it, and leverage it to enhance their position in the market.
So, how can you leverage this information? It’s all about demand.
- Use social media insights as a predictor of demand. There are a slew of companies in the market that harvest, cleanse, and analyze social media indicators. Aligning these calculated indexes may reflect a correlation to the associated sales. For example, when an existing wine brand receives a positive critique by an influential wine connoisseur, the discussion about that brand goes up across Twitter and Facebook, and so do sales. Coincidence? While not all types of products may be applicable to this method of demand trend predicting, tracking these types of fluctuations in social chatter could be an indicator of future demand, enabling companies to adapt more quickly to the ever changing connected consumer.
Social media insights are also valuable for planning in an all-channel world. Take the example above of a customer complaining about not being able to place an order. Lost demand? You bet. Is it an an opportunity to get to know your customers and put processes in place to enhance their online experience with you? Absolutely! Leveraging social media data to understand demand fluctuations – or in this case the potential for lost sales – enables you to plan better for the future.
- Capturing consumer insights for more effective assortment planning. Consumers talk about what they like, what they don’t like, and what they would like to have in the future. Understanding consumer sentiment around brands and/or other attributes about a product can enable more efficient assortment planning up front. A better assortment leads to happier consumers, which leads to more sales. Consumers can tell you a lot about their in-store experience and issues so that you can plan more effectively. Retailers and manufacturers should localize that data to better serve the needs of your customers.
- Utilize intelligent product placement on the shelf. By analyzing keywords and sentiment tied to a particular product brand or attributes, companies can better determine placement on the shelf. For example, by analyzing the sentiment within the social media channels about flavors of a particular food or beverage item, decisions on placement of those flavors (already included in the assortment) on the shelf can improve based on the additional information.
While social media analysis is certainly gaining traction within organizations’ customer service and marketing departments, the jury is still out on how effectively the same information can be leveraged within the supply chain. Companies must find a way to not only harness that data but manage it from a central hub, sharing and utilizing the data across all groups.
We all know that the volume of social media data, and the insights it reveals, can be overwhelming. It’s also not a simple undertaking to move to the next step of data, aligning it to your supply chain, and making decisions based upon the insights it reveals. And while I understand why companies are skeptical,
I believe that the insights we can capture from the wealth of information that is now available can only aid in making better, more profitable decisions in the future.