Are you Listening? – What Customers are Saying about Target

The data breach at Target Corp. affects 110 million customers in the United States which is equivalent to almost every single household in the United States possibly being affected. It has led to many articles being published, commented on, and many tweeting on the breach. An analysis of social data on Twitter and social commentary on a New York Times article reveals sentiments expressed by customers.

The news on the number of customers affected by the data breach at Target came out in installments – 40 million, 70 million, and then 110 million. Earlier in December, the company admitted a breach into its systems that resulted in stolen credit card information on customers that had shopped at its stores in the United States from November 27th to mid-December. Later, it admitted to a larger breach that had been going on over a longer time-frame.

 Figure 1: Analysis of Tweets on Target Data Breach

Analysis of Tweets on Target Data Breach

Analysis of Tweets on Target Data Breach

Customers to Target: Stop Calling us “Guests”!

An analysis of data from Tweets (see Figure 1 above based on social data analysis) and a separate analysis of comments generated by an article in the New York Times reveals a lot about what customers are thinking that the retail industry should be paying attention to. While the data from tweets reflect immediate reaction, they reflect shock at the enormity of the breach. Customers are unhappy that the information came out in installments and kept growing. Further analysis of data from over 1500 tweets over a 30 minute time period showed four segments of consumers. There were those who were shocked at the fact that the number had reached 110 million as revealed by the following tweet:

“@Target First 40 million, then 70 million, now 110 million?? Is it safe to say we’ll be at 200 million by next week? #JustBeHonest”

While Target might have released the data slowly to lessen the impact of disclosure on holiday sales, many questioned why it came out in installments and how much more was yet to come. It actually resulted in more tweets being generated on the new breach. The tweets on news of further breach accounted for a second segment.

A third segment focused on talking about the cost to Target because of lawsuits and impending probes. As one tweet mentioned even more than an impact on sales long-term, the costs add up due to other steps to be taken up in cleaning up the mess. Target itself admitted to seeing a lower percentage of sales at its stores after the disclosure.

There was a fourth and largest segment to which it was business as usual at Target, with mild remarks on the breach. Here is a sample of tweets reflecting this sentiment:

 ”How do me and my mom manage to spend 300$ at target ….

“My mom went all the way to Target for some freaking popcorn?

“Can u shop safely at Target anymore?”

so there was this bag that target had and i had wanted it since forever and now i have it and i am in love”

In general, the tweets reflect concern for security when shopping at all retailers than specifically about the Target brand.

Comments on a New York Times article, however, revealed unhappiness over the way Target handled this entire disclosure process (See Figure 2 below).

Figure 2: Analysis of Social Commentary on Target Data Breach

Analysis of Social Commentary on Target Data Breach

Analysis of Social Commentary on Target Data Breach

The fact that the numbers affected ballooned over time brought forth concern regarding leadership and concern about security. Many suggested that customers use cash instead. The conversation also revolved around how Target should stop using the word “Guest” when its does not treat them as such. If there is one sentence to describe the reaction of these customers, it is as follows:

“The arrogance of Target astounds;

Stop calling us your Guests.”

Impact

The impact of the breach is already clear. While the damage is done, it has made it important to usher in newer chip based credit card technology. This has also resulted in arguments between retail and financial institutions on who should bear the cost and burden of new technologies. The cost of such a breach is not just in identity theft at the individual level but a rise in black market for fraudulent credit cards that has impact on banks, law enforcement agencies, and retailers.

Next Steps

It is clear from the analysis that Target did not handle the disclosure process very well. The fact that the disclosure came out in installments, while increasing in its revealed damage – both in numbers and extent – only made it worse. The analysis reveals that Target customers hate being referred to as “Guests” and then treated in a way that is devoid of any protection and smacks of a lack of authenticity on its part to its customers. This breach is sure to make some customers weary in the short term of shopping at Target. However, this is a much bigger issue of protecting customer information with appropriate technology at all retailers so as to avoid larger costs resulting from an aftermath of such crisis. Some customers did suggest using only cash, while admitting that they never have enough on hand. While this might be a wish, it is likely to stay a wish for consumers in today’s economy. At least in the short term though, some customers are using cash only as stated here. As some of the tweets revealed, the larger impact is likely to come from other sources such as monitoring and probes.

Target is well-advised to take some steps to make its customers feel safer about shopping. It is clear that its customers dislike the use of the term “Guests” to address them. The ritual of calling its customers “Guests,” is perceived as just that – a ritual. It does not reflect a culture of caring. While its customers appreciate many products at its stores, the relatively higher quality compared to Walmart, and the fact that it is better stocked than Walmart, the company could do more to build its brand health. Starting with taking steps to make customers feel secure about doing transactions at its store and taking the lead among retail could be one such step. Target Corp. Chief Executive Gregg Steinhafel’s call to banks and other retailers to adopt chip based card technology is a step in the right direction. This is an opportunity for Target to lead the way for other retailers.

 

 

Which Half of Your Google Search Advertising is Being Wasted?

Which half is being wasted – branded vs non-branded keywords

We all know the 19th century adage “I know half the money I spend on advertising is wasted; I just don’t know which half.” Online click trackable advertising promised to change that. It seems it has. It turns out that “branded keyword” advertising is not effective for well-known companies. Companies with known brand names would do well to re-allocate the money they are spending on search engine marketing to other areas. In a recent HBR blog, Professor Fisman referred to a preliminary study by eBay that calls into question the effectiveness of Google advertising for big well-known brand names. In an elaborate and controlled experiment conducted by eBay, its researchers found that when Google (or Yahoo! or Bing) search advertising was discontinued for a sample of its potential audience, traffic to the site continued to perform as well as it did in areas in which Google “brand keyword” (defined as any keyword that is simply the company or product name or includes the name of the company such as “eBay shoes”) advertising was still being used. This study underlines

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Book Giveaway For Marketing in a World of Digital Sharing: Are you drowning in social media noise and chaos?

Marketing in a World of Digital Sharing

by Sujata Ramnarayan

Giveaway ends March 31, 2013.

See the giveaway details
at Goodreads.

ENTER TO WIN

Why marketers need to lead with data and insight

Marketing tech dataGartner Group predicts that by 2016, 80% of marketing technology spending will come out of the marketing departments. What are marketers spending on? It falls in three areas:

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Are you passing the Customer Qualification Process?

Businesses continue to think of the funnel as a sales funnel with leads entering and being qualified, and hopefully reaching the end-point of becoming a customer. A recent study shows that this process is changing. Companies need to change their perspective because it is the potential customers that are qualifying suppliers. So, are you in the “Customer’s Buyer Funnel?”

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Pay $7 for a cup of coffee? – Very Likely!!!

Starbucks is going super-premium. The company that got people to pay $4 for a product they had paid less than a dollar for is adopting a new long-term strategy. It has introduced a $7 cup of coffee in 50 of its Northwest stores made from a hard to grow coffee bean -the Costa Rica Finca Palmilara. It plans to roll out this product nationally next year. Starbucks might be on to something here again!

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How to Use Gamification to Build Digital Loyalty

Using  Gamification to Build Digital Loyalty

ENGAGE2012 is a conference hosted by Badgeville, the company that provides a solution for behavior gaming. It was a great conference with some interesting perspectives. Most CEOs today acknowledge the importance of social in their overall strategy even as the world seems to be taken over by social fatigue. Badgeville’s conference hinged on the next step of increasing social engagement. As Chris Lynch, Director of Product Marketing at Badgeville said – the intersection of social plus gamification is a powerful combination.

 What is Gamification

In case you are new to the concept of gamification, it refers to a set of specific feedback based processes designed to encourage specific behaviors.

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Why Social Media is NOT free

Social media has become popular as a communication channel for companies partly because of its low barriers to entry, along with its popularity among target customers.  Social media channels are free to enter, but associated costs and problems become apparent later. That is also one of the reasons why the return on investment is hard to measure. To download the article, please login.

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How Chobani did it with Social Media and More….

How Chobani Got its Start

When I saw the television advertisement for Chobani yogurt, I thought to myself – who needs one more yogurt and that too with a silly name?  The name did stick in my mind though, and the advertisement did leave its mark on me.  Chobani’s rise to fame before I caught its name on television advertising happened through social media – through blogs and more; through its customers who tasted it and vouched for it. The reason it got stocked on retail shelves was the taste test.  Once retailers tasted it, they found it hard to refuse to stock.  Its taste was great because, its founder and CEO Hamdi Ulukaya, Turkish by origin, spent a lot of time perfecting it. He felt the US could do with a better tasting yogurt.  I have to admit here that I am partial to European yogurts myself (in Europe though, where I have found them tasting a lot better, so much that I actually looked forward to eating it every day!).

Chobani’s Taste and Social Media

Chobani’s taste was slowly derived through focus, use of more milk than its competitors, and hiring a yogurt expert from Greece.  The success of this new entrant in a mature market dominated by big names such as Yoplait and Dannon was because of two reasons – making a better product than its competition and pleasing its customers so much that they would be your product spokespeople.  The third reason that helped Chobani’s rise to success is the access to “free” social media channels that makes its easier to scale word of mouth.  For a young and unknown company with few resources it evens the playing field (somewhat) to go up against its behemoth competitors who had grown comfortable with their success despite a weakness – not such great taste in the Greek yogurt category.  See Figure below.

Frequency of Social Media Mention of each Yogurt Brand

Chobani’s Socially Savvy Strategy

Chobani’s website is quite social savvy.  Their social strategy is well integrated with a community oriented marketing strategy that involves sponsorship of fitness events in which they are using their product and Chobani branded t-shirts for additional name recognition.  Their website features a series of “guest bloggers.”  These are other bloggers who write about nutrition and fitness, again using this as a way to engage influencers and their prospects/customers directly.  For its Facebook page, the company uses mostly delectable photographs of Chobani yogurt infused end-products that are hard not to “like” and thus spread the word.  The sentiment is generally positive with people from U.S. west coast to Brazil wondering where or when they can get their product closer to home.

 Chobani and Competition

Ironically enough, Chobani’s well entrenched and incumbent competitors have European origins as well.  Dannon yogurt is owned by a Spanish-French multinational based in France.  Yoplait which also has a French origin is actually owned by General Mills with a 51% controlling stake in it.  Social media mentions of Chobani compared to the leading competitors Dannon and Yoplait should be a cause for concern for these other well known brands.

As the Figure above shows, Chobani’s competitors have cause for concern, Dannon more so than Yoplait, for its share of mind among consumers. Granted, social media research reveals that not everyone likes the tangy taste of Greek yogurt.  I tasted Chobani myself and have to say that Greek yogurt is not for me, although I love yogurt in France.  However, I could tell that Chobani’s yogurt has great taste and texture for those who love slightly tangy yogurt. So it is no surprise that those who do are passionate about it.  Add to that the fact that this is a segment of young, well-heeled, and educated and a cup of Chobani as one of the tweets put it  “has 16 grams of protein and its like 6 oz holy cow #mindblown,”…packing a protein punch and low calories with taste.

 Lessons from Chobani’s Success

There are several lessons for companies around Chobani’s success:

• Social media evens the playing field a lot more for smaller competitors – provided they have a superior product (Chobani is only five years old)
• Chobani’s use of social media is very effective – using mostly fantastic photographs on Facebook, Instagram, and community engaging and oriented blogging.
• Social media metrics can tell you a lot more about the competition quite quickly.  Chobani’s competitors have cause for concern when they are losing share of mind in a category that is growing – Greek yogurt.

•While Chobani might have got its start and acceleration from social media, its television advertising led to so much demand that it had to stop advertising.  That says how much television too still has a role to play.

 

 

iPad At Your Service

iPad At Your Service

iPad At Your Service

Many customers today depend on their smartphones heavily for local shopping decisions.  As of January 2012, 29% of U.S. consumers own an iPad or an e-reader and 46% own a smart phone.  Some retailers have stepped in to cater to this trend by providing personal touches using technology rather than humans.  As Apple
pushes into the retail industry, retailers are responding by offering iPad stations for consumers to research and
compare the products they are shopping for.  Nordstrom has found itself surprised to find that customers are using its app inside its store to do research.  It introduced the app to help customers shop online and order online while they were watching television.  Based on my research using Social Media, customers have become disappointed with customer service and salespeople that are not knowledgeable about products.  They have also become extremely comfortable with doing their own research online, interacting with computers that seem more knowledgeable than the salespeople at stores.  Many of these customers do not want to be approached by a salesperson, however they all would like to find one when needed.  That is not the case as many of their experiences and my own illustrate.  I was at Orchard Supply Store over the weekend looking for a particular Hibiscus plant.  First of all it was difficult to locate someone to help me.  Finally when I did, all the person could do was to say he does not know what color the flower was going to be.  I finally took out my iphone to do my research.

Young and old, have both become accustomed to having their smartphones and tablets answer their questions through web pages and customer commentaries.  Many also still like to experience the touch and feel of products.  Retail stores are in fact becoming the showroom for many products that are bought online.  The things that will help them survive are:

1. Providing smart technology that is currently helping better than salespeople
2. Recognizing that they are acting as showrooms for their Manufacturer’s products and asking the Manufacturer for a higher fee to stock in return for offering the product at the same price as the online price
3. Changing the product in some way so direct comparison is made more difficult for the consumer
4. Having a few salespeople that are knowledgeable, trained, and ready to help when needed as a way to differentiate
5. Train salespeople to arm themselves with online intelligence on products so they can counter negative, biased, or inaccurate reviews.  Equip them with ipads if they cannot answer the question themselves.  An in-store app on products is another way to help customers, whether it is used by the customers or the salespeople or just placed within the stores as help stations.
6. Loyalty awards for repeat purchases.  Even membership cards that gives them discounts and free shipping on
products online.

Zappos is an online store.  However, it does not have shoddy customer service.  Its customer service is always
accessible on the phone for questions without being put on hold.  Based on all the negative comments about unhelpful and ignorant salespeople at retail, it seems that retail could use investing in a few good accessible salespeople as a differentiator.  After all Apple stores did make retailing cool using its cool products, great looking store focused on design, and knowledgeable and helpful salespeople (although that has received mixed reviews).  Use technology itself to help customers let salespeople know that they are needed.  After all what use is location based technology if you cannot locate a salesperson when needed within a store.  With point of purchase payment systems such as Square attached to an iPad, scannable coupons on cell phones, the role of salespeople as mere cashiers is also getting moot.  Similar to how social media is being used to connect consumers and give them something of value that represents the brand personality, brick and mortar retailers need to find their own way to connect with their customers through the feeling of community.  For brands like Nike, it has been through the online communities it has built around sports categories such as running.  For bookstores, its the story reading or author signing events.  Wholefoods does a wonderful job both online and offline in personifying its brand around the themes of sustainability, organic and local focus, and demanding a higher price for its products.  All retail stores need the equivalent of these events to build their brand around such events that are useful to their customers.  I have yet to see a clothing retail store partner with a fashion show or a designer.  These are things that online stores can emulate (or already do through reviews) but cannot come close to as in a live setting.