Groupon, the “localized” deal of the day website has witnessed phenomenal growth in the last one year. Groupon’s success underlines the power of Social Media which makes it so easy to connect with other like minded people over the internet. (for more on Groupon’s success, watch this excellent CNNMoney Video)
Traditional retailing involves buying in bulk from the manufacturer (or distributor) and selling one piece at a time for a mark-up. This model has served both the manufacturer and retailer well – so far. This is about to change, thanks to Social Media.
Customers are increasingly going to leverage power of Social Networks to connect with other like minded customers who want to buy a particular product or service. Collectively, this group of customers is a force to reckon with and manufacturers (or distributors) can directly sell to them breaking the hegemony of major retail chain stores. To counter this, retailers can leverage the power of Social Networks and offer deeply discounted prices to its customers if a certain volume of sales is achieved – what Walmart seems to have done.
Whichever way you look at it, Social Media will disrupt the “traditional” retailing model for good. And customers are going to be winner as they can exercise group buying power and buy products/services at lower prices or at better terms. If retailers don’t innovate and leverage Social Networks, their margins will be under increasing pressure and they will lose customers to those who leverage the effectiveness of Social Networks and offer great deals.
What do you think? Do you agree that Social Media will disrupt the traditional “Retailing” Model? Please do share your thoughts:
Dr. Harish Kotadia has more than twelve years’ work experience as a hands-on CRM Program and Project Manager implementing CRM and Analytics solutions for Fortune 500 clients in the US.
He also has about five years’ work experience as a Research Executive in Marketing Research and Consulting industry working for leading MR organizations.
Dr. Harish currently lives in Dallas, Texas, USA and works as a Practice Leader, Data Analytics and Big Data at a US based Global Consulting Company. Views and opinion expressed in this blog are his own.
[Recorded Sept 26] Traditional Voice of Customer surveys have a blind spot to real-time feedback on social media and call center interactions. Learn how progressive companies are mining Big Data to improve the customer experience, reduce churn and even boost agent selling.