What Retail Giants Could Learn from Social Media Influencers

Have you seen the latest news on major department stores, such as House of Fraser and Debenhams, facing their all-time low Christmas sales? They are not the only ones, and many huge brands risk having to shut down low performing branches.

The sales figures for Christmas 2017 has to be a wake-up call to retailers and major brands. Otherwise, they face a massive challenge. Look what happened to the music industry and print media. Look what is happening to the traditional TV.  

Alibaba’s Singles’ Day sale amassed $25.3 billion, doubling 2016 Black Friday and Cyber Monday sales combined.

In China, social media influencers are known as KOL (Key Opinion Leaders). Within the first 10 minutes of Singles’ Day, revenue from stores managed by a blogger incubator 宸帆 reached a combined 150 million USD. And in two hours, sales sky-rocket to over 300 million USD.

While, major brands and department stores increasingly struggle, lay off more people and close down branches, independent creators and social media influencers are gaining more traction.

These days, there is not a week that I don’t see young people wearing some YouTuber or Instagram influencer's merchandise.

Why is this happening? And what can retailers learn from influencers?  

Today social media influencers are the tastemakers and micro-media outlets of our time. What this means is that they are quickly replacing traditional media. They have learnt how to build their advertising message into their content, without taking away from the entertainment or educational aspect of it. The ABC, NBC, FOX, and CNN of yesterday are now the YouTube, Instagram, Twitter and Facebook of today. So likewise the John Travolta, Jim Carey, and Angelina Jolie are now King Bach, Amanda Cerny, and Zach King of today. And that’s not even scratching the surface.

Advertising in a traditional sense is becoming less powerful. While retail giants, like John Lewis, Debenhams and House of Fraser pour their advertising money into TV and magazine ads, millennials (who are, btw, the largest generation since WWII), are looking elsewhere. But digital ad spend are quickly catching up to TV ad spend.

Millennials are also impacting the purchasing decisions of their seniors. Alas, big companies have not yet figured out how to speak to this generation.

Millennials prefer to consume content produced by social media influencers, via YouTube, Instagram and Podcasts. Because they relate and look up to these personalities a lot more.

Therefore, today, influencers are quickly becoming a powerful rival to traditional media.

Influencers are challenging the status quo of marketing methods, as earned media value (EMV) translates to proven ROI. As AI and data analysis capabilities improve, so does the ability to analyze the effectiveness of influencer campaigns.

Influencers' content gets better every day, too. The only thing stopping them beating blockbusters and big TV channels with decades of credibility is lack of funding and pro-level production skills.

However, the barrier of entry is diminishing every day, as technology makes it easier for millennials to create beautiful and relevant content.

Have you seen the AR capabilities of iPhone X? Honestly, it’s should scare the **** out of massive retailers and giant media companies.

I can already see independent content creators soon being able to create drama series and mixed reality shows, set and recorded within an AR environment, using no more than their iPhones. The technology is very new and slightly glitchy, but it’s not far from becoming a contender.

Some brands are realising the power of these new ways of communications. And those who do, are using AR to increase conversion. One of China's largest grocery store, Yihaodian, set up more than 1000 virtual shops in public places. Shoppers use the AR app to browse products, and the purchases are then delivered to their homes. Nike uses AR and image recognition to connect print advertising with its online shop. A shopper’s mobile points to a Nike ad in Runner’s World, it jumps to the shopping cart on Nike’s website - it’s like a better experience than a QR code.

This is not a joke, the day is closer than you may think when independent content creator will wake over the media landscape. And when it does happen, the time will be too short for big companies to catch up, unless they go through a complete restructuring of their brands. The early adopters of influencer marketing and other new means of communication are cashing in on the opportunity to reach younger audiences in more effective and creative ways. The late adopters will certainly realize they shot themselves in the foot.

Even, when they do have a “web presence”, many large brands don’t get it right.

There is one major factor that separates the influencers’ content from the social media output of large brands and retailers on social media. It doesn’t take a genius to figure this out.

Influencers create CONTENT THAT MAKES A DIFFERENCE. Majority of their content is either entertaining or teaches people something, whether it’s DIY, Makeup tutorials or health and Fitness tips. Influencers know their niche audience and create content that their audience wants to consume. They’re relatable, down to earth, more personable, and trusted more than most brands. This day and age it is less about what a brand tells the world about itself rather what other people tell the world about the bran.

Customers feel instant gratification after being rewarded for supporting an influencer. Especially when the influencer provides value and gratitude to followers and buyers. People prefer to buy from people, not faceless corporations. Therefore, brands need to find innovative ways to have a meaningful conversation with their customers.

One way of achieving this is through influencer marketing, where brands start a conversation with their audience through influencers. Retailer giants can humanize their brand by having either a celebrity ambassador or have an internal spokesperson to represent the company’s values and vision.

Still, in a testing phase, Instagram has a shopping feature allowing brands to promote sales. Brands can tag products available for sale, and shoppers can purchase directly from the app. Imagine partnering up with Instagram influencers who cultivate your demographic of millennials or gym junkies. You can leverage their traffic for sales and brand awareness.

Another way of communicating with the audience in an effective way is where the brand itself creates entertaining and information-rich content. This requires the brand to reduce their product-led advertising and get creative with content that entertains and educates. Brands and retailers need to start thinking about who their customer is and what the want.

Loyal customers want to be a part of “the bigger picture” and share values with the organization’s mission.

Sadly, many giant companies, primarily, post about their products. They seem to think that people’s newsfeed on Instagram and Facebook, even on Linkedin, is for them to plug their products with no real effort to entertain, educate and connect, first.

Companies and retailers need to evolve and adapt their marketing strategies more quickly or be prepared for a nosedive in a digital environment.