October 05, 2010

Digital Profiles Part L: Social Shoppers

There are two directions that marketers are taking with Social Media.

Direction #1 = Counting followers, engaging users, creating conversations.

Direction #2 = Looking for actionable outcomes that drive sales increases and profit improvement.

Having been a VP at an eight billion dollar a year apparel/shoe department store, I have a feeling that most Executives are looking for you to head down "Direction #2".

If that's the direction you're heading down, then you want to analyze what I call the "Social Shopper". This is a customer that purchases because of your social presence, or because of a social media reference from another individual. These customers are not difficult to track, heck, you have the referring URL information in your web analytics platform to do this ... it just takes a little work, doesn't it?

Once you've done the work, you can review your "Social Shoppers" via the Digital Profiles framework. Let's count the number of "Social Shoppers" in the past year, by Digital Profile:
  • Gold Mine! = 1,079 customers.
  • Multi-Channel Mavens = 683 customers.
  • The Digerati = 397 customers.
  • A Long Drive = 516 customers.
  • Shop Online, Buy In Store = 241 customers.
  • Direct Newbies Looking For Eight = 219 customers.
  • Online One/Twos = 294 customers.
  • Ship It To Me = 66 customers.
  • Retail Fanatics = 0 customers.
  • Retail 4/5/6 = 0 customers.
  • Retail 1/2/4 = 0 customers.
  • In And Out = 0 customers.
  • Retail 1/2/3 = 0 customers.
  • Retail Newbies Looking For Eight = 0 customers.
  • Retail 1/2 = 0 customers.
  • Rotary Phone = 0 customers.
Oh oh, what do we see here? There's those darn "Gold Mine!" customers once again, followed by "Multi-Channel Mavens". In other words, the Social Shopper, predictably, is an online individual (duh) with an affinity for shopping in stores. Ask Kohl's if that's the case!

We can look at where next month's social shoppers will come from ... here, we freeze Digital Profile assignments at the end of a month, and then in the next 30 days, we measure the probability of a customer purchasing via Social Shopping, by Digital Profile. Take a look!
  • Gold Mine! = 0.81% response rate.
  • Multi-Channel Mavens = 0.79% response rate.
  • The Digerati = 0.44% response rate.
  • A Long Drive = 0.39% response rate.
  • Shop Online, Buy In Store = 0.32% response rate.
  • Direct Newbies Looking For Eight = 0.26% response rate.
  • Online One/Twos = 0.26% response rate.
  • Ship It To Me = 0.16% response rate.
  • Retail Fanatics = 0.05% response rate.
  • Retail 4/5/6 = 0.05% response rate.
  • Retail 1/2/4 = 0.02% response rate.
  • In And Out = 0.05% response rate.
  • Retail 1/2/3 = 0.00% response rate.
  • Retail Newbies Looking For Eight = 0.01% response rate.
  • Retail 1/2 = 0.02% response rate.
  • Rotary Phone = 0.00% response rate.
In other words, the most responsive customers to "Social Shopping" are the customers with an online presence, coupled with an affinity for store purchases.

Here's another thing we can do. Let's dig into our "Gold Mine!" segment, and for the past three years, count the number of customers with a Social Shopping purchase, and the number of customers without a Social Shopping purchase.
  • 2008 = 8,773 with no Social Shopping, 576 with Social Shopping.
  • 2009 = 8,235 with no Social Shopping, 720 with Social Shopping.
  • 2010 = 7,544 with no Social Shopping, 1,079 with Social Shopping.
Notice that the "Gold Mine!" segment isn't growing ... in fact, it is shrinking. Just as important, it is being overrun with Social Shopping. It does appear that Social Shopping is becoming more important, but it isn't necessarily causing the overall customer base to become "more valuable", because if it caused the overall database to become more valuable, there would be more "Gold Mine!" customers, right?

Here's what the counts look like for "Multi-Channel Mavens" ... you'll see the same story here as well:
  • 2008 = 7,000 with no Social Shopping, 393 with Social Shopping.
  • 2009 = 6,399 with no Social Shopping, 506 with Social Shopping.
  • 2010 = 5,541 with no Social Shopping, 683 with Social Shopping.
If you are a marketer, responsible for growing your Social Shopping presence, you have a unique opportunity to see if your activities are truly improving the overall customer file. In this case, for this business, it appears that Social Shopping is inevitable, and is becoming a preferred channel for a minority of customers, but isn't causing more customers to be populated in the best Digital Profiles.

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