How Retailers Can Keep Up With Social Media as a Marketing Tool

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US retailers have no choice but to evolve in future in order to cope up with the ever becoming dynamic retail industry. The history of retail landscape is different today as compared with ten years ago. The decisions that are made by consumers today plays a major role on what to shop and what to leave. Understanding the way consumers make their decision is a big plus for retailers. The rise of smartphones has made it possible for customers to compare prices of products. Family and friends also play a big part in influencing the shoppings decision through the help of social sites. All these trends pose a big threat to the retail sellers calling for them to come up with ways that they can improve sales and business as a general. The historical developments of these new trends have had an influence on the industry winners and losers. A decade ago the department stores wiped out local corner stores. What followed was introductions of supermarkets and then the shopping malls and now the coming up of the discount chains and big-box retailers.

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The shifts in the way retailers reached customers have led to the six of the best retailers in the US falling down. There are new winners and losers in the industry as illustrated by the US Securities and Exchange Commission filings; an analysis by Mckinsey. Despite changes in the retail industry, the incumbent retailers still have a belief that they can still cope with the new trends in the industry. They believe that they only need to come up with techniques that are mathematically based on understanding the consumers' shopping behavior. This research will help in drawing the trends that have the most influence on the retailers in the US.

Costco Inc.

Costco Inc. is a wholesale retailer in the US with an approximate 680 membership. The company serves 71 million members both in the US and outside countries. The stores offer retailing prices on its products they offer including alcoholic beverages. The company faces competition from companies such as Walmart and Amazon. The company will benefit in increasing their customer base if they develop analysis techniques to understand its customer behaviors and trends (Berman, 1996).

The big questions that will be addressed are: How many consumers are found in social media like Facebook and whether the site has influenced their shopping behavior on Costco products. What kind of platforms do consumers expect brands to have a presence on? What do customers want from companies that connect to customers through social media? What activities have consumers used over the last five months on the different brands? The research will be focused on how social media has had a big impact on the consumer behaviors.

Historically the company has been relying on membership fees to drive their sales. The membership fee has in the past generated a sales revenue of up to $100 million per year as per sol price founder, club price, 1999. The company has been running its business on the dependence on membership fees. There is a need for the company to change its approach in order to fulfill the changing desires that consumers are adopting social media being such a compelling factor. Missing data on consumers behavior and shopping trends will make it hard for the organization to make decisions basing on their strengths. The company will also find it difficult to also know the part of the retail that they need to make in order make improvements (Saravanakumar, SuganthaLakshmi, 2012).If a researcher will not be in a position to access microdata then it will be difficult for them to reduce disclosure risk.

The chart below gives a clear description on how new trends have had an impact on retailers over the past decade in the US. The figure illustrates how the new trends such as social media marketing are influencing consumers. The effects on how the changes have led to new entrants in the business and others being kicked out. From the figure below Costco has improved at a 71.0% over the past 10 years.

The information to be collected will be focused more on how the developments of social media are having an impact on the retailers consumer behaviors with a focus on Facebook. Facebook being the most popular social media site have a big impact on consumer behavior both directly and indirectly. The data and research from this paper will help readers to better understand why some retailers perform better than others. It will also help to show if their shopping decisions have been influenced by new trends in the social media and families or friends.

Research information and data collection

Highly personalized marketing

The habits in which retail consumers have been changing from the traditional shopping to a new era of digital shopping. Most consumers have moved away from print media for digital media of getting information about products offered by retailers. The role of newspaper circulars and direct mail to market retail products is reducing drastically. The influence made by mass advertising is reducing and most companies like Costco Inc. are shifting for the new forms of advertising like Ads clicks. The new shift towards personalization is influenced by the use of sophisticated algorithms and predictive models who work is to analyze transactions data and the digital media trends. The data below is a report given by Ipsos-Reid on the number of times Canadians have searched a product online and those products they have purchased online.

The algorithms used by the retailers companies help the companies to know about the topics that are most discussed in the social networks. A research done by the national consumers of the US shows that 35% of what consumers purchase on Amazon and 75% of what they view at Netflix come from the recommendations from the algorithms that have been adopted by the companies. The company direct marketing is facing a big competition from the peer recommendations via social networks and user reviews. The study has shown that the average consumer peer recommendations carry a more weight that the recommendation from the sales marketers of the company. Costco Inc. should be encouraged to put 22% of market spending on social media marketing, this is to increase the influence of peer connections about their brands via the paid ads and branded pages on sites like Facebook and Pinterest.

Presence in the social media (Facebook).

Research conducted on 560 on customers on what they expect companies to have their brands being marketed on social media. Borrowing from the social life cycle, consumers knowledge of company brands has a high chance of improving the company business. The changes in current trends have it that most consumers expect Costcos brands to be active in not less than one social media channels.

90% of millennials have a strong belief that they expect to have the company to be present on Facebook. From the analysis above people who are aged 30-44 years and 75% of those aged above 45 years have a strong belief that most of the companies should, at least, have a page to market their brands. When comparison on all the social media platforms most did not have a great expectation on sites like twitter and LinkedIn. 50% of those interviewed believe that they expect companies to have their brands marketed through social media platforms since it is a medium through which most consumers go to get information about most products.

Social channels are viewed by many as a way through which Costco inc is dedicating itself towards transparency and accountability. Most of Costcos customers recognize and expect to see the company to be brand engaging with its customers on social networks. Most of the customers say they heard of the companys brands via social media and not the usual advertising agents. Most of the silent customers might seem not to like or comment on products, but the bottom line is they are still watching. The brand's social sites give Costco customers to criticize the company openly on the part that they are performing poorly. Most of the American consumers have tended to shop on retail outlets that respond and give feedback on a timely manner.

Additional data indicate that Costco Inc. is has 1.2 million fans on their Facebook. This is as per the data obtained from the Facebook data analytics. The image below gives an indication of Costco Inc. when compared with other brands in the US.

The data collected on how social media trends have had on consumer behavior have an impact on the way the society believe in a product. Most people believe on a brand that is talked most by family members or friends (Brijs, Goethals, Swinnen, Vanhoof, & Wets (2000). Economically a company that embraces new ways of marketing its products is most likely to benefit and increase its company sales. Costco, for instance, has improved and joined the top ten retailers in the US, and this is attributed to the techniques employed by the company to engage its consumers through social media.


The assumptions made in the research is that consumers have equal chances of accessing the internet and social sites. Another assumption is that the retail sales companies will continue to rely on advertising and marketing to improve their brands. Another assumption is that those who were interviewed answered all the questions as per the requirements and honestly.

The information collected concerning the impact played of social media on brands is true. The figure below shows the social media leading at 27% when compared with other avenues of marketing brands.

The forecast done by the US interactive marketing spend indicate that 29% of the total marketing is allotted by most companies to online and digital marketing. Costco Inc. should, therefore, put more effort to market its products through social media. The research, when put to use in the real world setting, indicates that companies who embrace digital marketing are most likely to succeed in increasing its customer base and finally its retails sales. The research problems were how the company would keep up with the changing trends on how consumers behavior affect company sales and brand name. Costco Inc. should, therefore, make put more emphasis on marketing its brand via social media sites with more emphasis on Facebook. The combine is encouraged to develop a mobile app that will be used in marketing the companys brand. The reason for developing the app is because mobile is now becoming the fastest digital marketing channel (Stelzner, 2010).

Conclusion and recommendations.

The inference of the research is that the retail industry in the future will be based on how well its brand is performing in terms of social marketing. The information on the number of likes and comments on products by social media sites could give a wrong information. The likes at times do not correspond to the number of consumers who purchase the products, they could be just silent followers. The variable missing from the quantitative data is the number of products sales as per the type of marketing tool employed. Another variable missing is the cost that Costco Inc. will incur as it uses social trends to market its brands.

There is a need to find information on how consumers would love about the company brand on a personal level other than depending on the information they get from friends and media. There is also a need for the company to stretch further and merge with technology companies to allow them to use mathematical avenues to market its brands.

The new trends that are changing consumer behavior will put a new strain on the retail companies and, therefore, there is a need to make recommendations t...

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