It’s hardly news that consumer behaviour is changing fast – digital activities are growing rapidly in every sphere.
Today, more than half of the Australian population has a Facebook account, that’s 12,400,000 people and over 2 million Australians have publicly expressed their interest in fashion on their social graph search.
Two thirds of video views in Australia take place in ways that barely existed a generation ago and are either time shifted (e.g. video on demand) or device shifted (laptop, tablet, or mobile and smart phones). For music, upward of two-thirds of usage involves digital streaming services, MP3 files, or satellite radio. Mobile phone usage has overtaken landline voice among every age group.
These numbers have attracted a large number of fashion brands into social media. After all, Facebook and Twitter could help the retailers engage with their customers, right?
The fashion industry knows better than any other industry that within broad consumer movements, small groups of users actually drive the economics and behaviour.
Achieving a more refined understanding of who is doing what requires a considerate segmentation that incorporates data about consumer demographics, household characteristics, usage patterns, spending, attitudes, and needs all underpinned by “big data” analytics.
Together, the largest 20 retail fashion brands on Facebook in Australia aggregate over 5 million people and engaged close to 200,000 people in a typical week of June. The numbers are there, but how about the market intelligence. Who are these people? Why they are following your brand? Can you segment them? Where are they on your buying cycle or life cycle?
Understanding the different types of Facebook users is the first step to effectively communicating with them and providing appropriate features.
For example, Online Circle Digital’s recent Facebook Performance Report utilised psychographic segmentation to identify four kinds of Australian Facebook users in fashion and their usage patterns.
Analysing the habits of over 195,000 active fans of the top 20 fashion brands in Australia, we detected some distinct user profiles (averages taken over 7 days between May and June, 2013).
We identified Brand Traditionalists as digital followers who regularly engage with their favourite retail and fashion brands. Offer Practicals are after special offers or deals and are not necessarily loyal to one brand but respond to offers. Data Entertainers seek out entertainment content and Social Trendsetters are the super users that expand content and drive behaviour.
While the Offer Practicals and Data Entertainers collectively represent about 85% of all fashion brand followers in Australia, they are less loyal and consume less from a specific brand or retailer compared to the Brand Traditionalist and Social Trendsetter, however they require almost double the investment to please and to service.
Traditional retailers have for years been criticised for failing to prepare for the online onslaught. Last year, Myer chief Bernie Brookes predicted many newcomer pure-players would struggle as traditional retailers improved their own online offerings.
“They’ve all had their time in the sun [and] in my view that time in the sun will come to an end and is coming to an end now,” Brookes told an American Chamber of Commerce in Australia.
Let’s consider the internal structure of traditional retailers and their market intelligence departments. If they import their customer analysis and segmentation models and apply it to social media, they will have a strong competitive advantage and a tangible real usage for social media beyond entertaining followers and offering coupons for bargain hunters.
Segmenting and understanding your social following is the first step to provide a suite of values like customer relationship, trust and intimacy all of it highly related to purchase intentions.
Let me give an example by comparing Sportsgirl and Jay Jays.
Both brands are active on Facebook, have a high following and somehow present a healthy engagement rate. The graph demonstrates the engagement of their fans on Facebook, between 15 April to 08th July, with red representing Sportsgirl and blue representing Jay Jays.
For both brands the most engaging content is targeted to Data Entertainers and Social Trendsetters, however, when you analyse the top 200 most active users for both brands you notice a difference. While Sportsgirl’s top active users are mainly composed of Data Entertainers while JayJays has a good number of Social Trendsetters.
How about Myer and David Jones?
Social media for a luxury brand is comprised of five properties: entertainment, customization, interaction, word of mouth, and trend. When evaluating social media impact on customer relationships and purchase intention, entertainment and word of mouth have a significant positive influence on intimacy. Trust is influenced by entertainment, customization, and trend, while purchase intention is influenced by entertainment, interaction, and word of mouth.
Both brands offer similar numbers at Macro level with close numbers for social media audience, reach and impact, however when one starts to analyse the micro data differences become apparent.
After analysing the top 100 most active fans for both brands, the difference in audience quality becomes more obvious.
While the most active Facebook fans for Myer give the brand more reach via their expanded social connections and therefore influence short term behaviour, the Top 100 fans for David Jones are more likely to be trendsetters and influence long term opinion and behaviour.
It’s worth noting that this kind of information is available to businesses of all sizes and the fact is that social media analysis can facilitate sound decision making for small to medium size enterprises to get the kind of data intelligence previously available via expensive research exercises.
The best return will not come for those who collect the largest audience, but rather for those who identify the segments and communicate according to their needs.
Ultimately, there will be only two sustainable positions – you do it right for a positive outcome or you do nothing and fade out of business.
Lucio Ribeiro is senior strategist at Online Circle Digital.Founded in 2009, Online Circle Digital is a privately owned digital intelligence agency based in Melbourne, Australia. It provides research, monitoring, analysis, strategy and execution for leading Australian and Asian companies.