Earlier this week, Wal-Mart released a new social networking strategy called CrowdSaver. Similar to the social buying / group coupon concept recently popularized by super start-up Groupon, Wal-Mart is using social networking as a way to help consumers save money. The basic premise is that Wal-Mart posts certain deals on their Facebook page. Consumers are then prompted to "Like" the deal in Facebook and, if a certain number of "likes" are acheived, then this deal will be unlocked and available on online.
This sounds like a no-brainer for Wal-Mart, but there might even be more benefits to this strategy than you might initially think. Let's quickly break down why it works and review of the obvious and less obvious benefits.
Why it works...
There is actually a strategy - This might sound basic and almost insulting to some, but the main reason why this will work is that there is a solid strategy behind this social networking program. Too many times, I see brands rush into creating Facebook pages, Twitter accounts, YouTube channels and mobile apps without a sound strategy, ultimately driving little to no results. Let's be honest, Wal-Mart is copying the strategy of proven smaller players like Groupon for this campaign, but regardless of orginality, the strategy is sound and well thought-out prior to launching this campaign.
Psychology of social sharing - Seth Godin wrote a great blog post earlier this week entitled "I spread your idea because...", where he describes 20 reasons why people are compelled to spread ideas online. One of the reasons he notes is "because both my friend and I will benefit if I share the idea (Groupon)." That is the brilliance of the model, it is a win-win-win model. You win as a consumer because you get the deal, your friends win because they also get the deal and Wal-Mart wins because they get the volume of guarenteed purchases and the increased brand awareness and engagement.
"While Supplies Last" - This is one major difference between Groupon and Wal-Mart. Liking a deal, does NOT guarentee that you will get the deal. It only helps to unlock the deal. This allows Wal-Mart to fix the inventory level for any deal. The value here to Wal-Mart is in minimizing any risk of these promotions. If inventory is fixed and the deal is only available online in a centralized and controlled e-commerce environment, the risk profile for this type of initiative is significantly reduced.
What are the obvious benefits...
Ability to clear out old inventory - This is a great vehicle for Wal-Mart to clear out invetory last-minute with little work or expense.
Strong brand builder - Wal-Mart is already a global giant and well-known brand, but these types of campaigns help to reinforce the core value proposition to consumers, which is that Wal-Mart gives you more for less.
More Fans on Facebook - In order to "like" the deal, you first have to "like" Wal-Mart. This allows Wal-Mart to quickly build a strong community on Facebook, which can be leveraged in any number of ways in the future. As of the time of this post, Wal-Mart already had almost 2 million likes on their Facebook page.
What are the less-obvious benefits...
Stronger connection to active Facebook users - Facebook has over 500 million active users (users that have visited Facebook in the last 30 days). If Wal-Mart can get Facebook users to habitually check the CrowdSaver page when they log-in, that is a huge un-tapped market for them.
Lower advertising costs - Social networking strategies like CrowdSaver help to reduce traditional advertising costs by instead harvesting the power of social sharing. This has a double positive effect for Wal-Mart. One, they can get value for their advertising dollars and two, they can use some of the savings to offer better deals to consumers (which has a compounding effect on number 1).
Better Customer Intelligence - Potentially the largest benefit of this program is the customer intelligence gained from running these campaigns. Wal-Mart can start to understand valuable information on the type of consumers attracted to various deals, the key pricing strategies to drive viral adoption and the best inventory to drive volume of purchase.
Consumer loyalty and engagement - using Facebook connect, Wal-Mart has the ability to integrate the experience across brand-controlled and Facebook-controlled web pages in order to better understand and target the key segements of their community. This will only expand as consumers take more control over their profile and preferences, driving up the demand for more relevant and targeted communications and offers.
Conclusion...
There are great opportunities for brands to use social networking strategies to really drive brand awareness, engagement, loyalty and increased purchase behaviour. However, it is important to stay focused on the consumer when developing these strategies - ie. what drives them to take action, what are they looking for, why would they spread your idea. Too often, we get wrapped up in the technology or the new online destination and we forgot that it is the same consumer on the other end.
I'd love to hear your thoughts.... is Wal-Mart on the right track or is this just another case of benefiting from the smart idea of others (in this case Groupon)?
SUCH A GOOD BLOG POST. YOU SAID IS VERY INTERESTING......
Posted by: Nike Shox Experience | April 17, 2011 at 11:13 PM