NEW YORK: Around four in ten US retailers are using social media platforms to inform product development, a sharp rise from 2013, a new study has said.
For its 2014 Merchandise Planning and Allocation Benchmark report, consulting firm Boston Retail Partners surveyed staff at leading North American retailers who were involved in planning, merchandising and IT across apparel and accessories, department stores and other categories.
It found that the proportion of retailers looking to social media for insights to guide their merchandise planning had leapt from 6% to 39% in the course of one year.
Ken Morris, principal at Boston Retail Partners, told Luxury Daily that social media was fast becoming "an imperative marketing and merchandising tool for retailers".
Apart from enabling a two-way dialogue with their consumers, it also allowed them to "glean valuable insight into the preferences of their target market" and so enhance their ability to offer the right products, at the right place and at the right time.
Instead of assortment decisions being made by a handful of people, retailers could now test different styles and assortments, he said, and get a quick response via social media that would help segment 'likes', based on products and demographics, and augment other data.
He further noted the practical benefits of this approach in helping to reduce markdowns, while adjusting order levels and replenishment to maximise margins.
A separate study from digital thinktank L2 cautioned that brands might have to rethink which social media platforms they used. It said that digitally savvy brands have sought to be present on as many platforms as possible, but this approach was not necessarily paying off.
Only three brands – Chanel, Burberry, and Dior – were in the top 20% in terms of engagement and fan base on all the Western social platforms they participated in.
"Brands will soon be forced to pick quality over quantity, and choose their partners wisely," it said.
Data sourced from Luxury Daily, L2; additional content by Warc staff