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Wal-Mart, Costco, Kroger and Macy’s Discover The Cost Of Not Paying Enough Attention To Your Social Sites

Written by Evan Schuman
November 10th, 2011

In retail, social media shares a very narrow attribute with CRM and Web analytics. All three were initially undermined because of the way they were sold to retailers. Specifically, the amount of effort required to extract value from them was criminally understated.

A report this week showed the impact of such sales malpractice and slammed some of the largest retailers—including Wal-Mart, Costco, Kmart, Kroger and Macy’s—for either ignoring complaints on their own Facebook pages or being ludicrously slow in responding.

Costco, Kmart and Kroger took the top dishonors, with each chain responding to zero of the complaints lodged against it during the review period (five working days in September). Wal-Mart ignored 41 percent of all legitimate complaints, Macy’s ignored 35 percent of its complaints, Bloomingdale’s ignored 20 percent, Nordstrom ignored 20 percent, Sears ignored 11 percent and Safeway ignored only five percent.

“Non-responders Costco, Kroger and Kmart also suffered large numbers of complaints and questions—but have chosen to let these problems multiply and fester,” said the report from British social media firm Conversocial.

“Despite some good efforts, as a group, U.S. retailers are relatively slow at responding to their customers, with none of the 10 averaging under an hour. No U.S. retailers managed to achieve an average response time within an hour, and not even half managed to get their average response time down to under four hours.”

The problem is that, like CRM and Web analytics, retailers don’t put enough resources into the product’s care and feeding. CRM and Web analytics reports won’t help sales unless a team is routinely and consistently pouring over those figures and searching for patterns. Social is similar. Creating the sites is just the beginning.

If the chain doesn’t actively participate, the value is lost. Indeed, for some, that lack of participation could actually fuel a negative “we don’t really care about you customers” perception. Somehow, Facebook never mentioned that part.

Conversocial CEO Joshua March said many chains don’t appreciate how much work an effective social strategy requires. “Retailers tend to set up these pages as a pure marketing channel. They haven’t really thought through the process,” he said.

One problem is the public nature of a Facebook reply. Customer service personnel are given latitude to make comments and fix problems, but on a one-to-one level. The comment that is broadcast to millions generally needs the signoffs that a news release might, from Legal and PR and Marketing and the EVP In Charge Of Saying No.

That clearly must change. Of course, hybrid options exist, with social site people being able to offer a generic message to the masses (“We are so sorry for these errors. We’re trying to fix them right now.”) while contacting customers directly to help fix really specific problems. Either way, it’s a new approach.

March cautions against relying on that dual-approach too much. When complaints are aired publicly, the chain is doing itself a huge disservice by resolving it privately. He argues that even if that one customer has been made ultra-happy, the chain can still lose.

“Even if that customer is really happy, even if the matter is resolved and the customer now loves you, the rest of the world just sees an angry customer and a generic response,” March said, adding that “it’s much better if you can resolve it on your wall. And some will be upset if you ask them to privately E-mail when the customer has already told you—and everyone else—exactly what went wrong.” Yes, people, we’re now entering a new transparency.


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