What's Next in Social Media & Technology?

MIAMI BEACH -- Social media, big data and loyalty were the hot topics on the second day of the 2014 NACS Leadership Forum here. The executive leadership conference yesterday focused on how to use technology to foster greater customer engagement and loyalty.

The day started with an exploration of "Next Gen Customer Engagement," with speakers from a high-tech investment firm and two leading consultancies giving examples of technologies rapid growth and predicting which type of technologies consumers will choose in the near future.

Rouz Jazayeri, partner in the firm Kleiner Perkins Caulfield & Byers, called the growth of mobile the major Internet trend at present. He noted that Internet use is still growing globally, particularly in China and India, although growth has leveled off in the United States. Mobile devices are driving the growth.

"Mobile traffic is 15 percent of Internet traffic and growing globally," he said, noting that a larger percent of users in China access the Internet via mobile phones than personal computers.

According to Jazayeri, the next big tech trend will be wearable devices and what he called "everywhere computing."

Anthony Shop, chief strategy officer and co-founder of Social Driver, emphasized that "people are the new channel." He noted that people today are writing their own autobiographies and the trick for companies and brands is to figure out "how can I get my customer to take a selfie with me in it."

Shop also talked about the importance of being an originator, rather than a copier. Some examples he provided included Tesco's Home Plus subway virtual store in Korea and Lowe's home improvement's "fix it in 6" six-second, how-to videos which cement the retailer's brand as the place for problem solving.

Katie Elfering, senior director for CEB Iconoculture, told retailers to "stop trying so hard" when it comes to social media. She advocated "right-sized engagement." She observed that "marketers want to be BFFs with their customers, but customers don't have the time or desire to be BFFs with most brands."

All brands and product categories don't lend themselves to the same level of engagement. A key to right-sizing engagement is knowing your brand. A good example of matching a brand with its customers, she said, was Jack in the Box's Jack's Munchie Meal for late-night customers.

She also emphasized that consumers are human beings. They want to know "how long does it take," and "what am I going to get," before engaging with a brand.

Elfering closed by reminding the audience that when using social media they should be balancing usefulness with entertainment. "At the end of the day, brand is not what you tell your customers, brand is what your customers tell their friends."

Magnar Mokkelgard, vice president of Norway-based Reitan Convenience, gave a profile of his family-run, values-driven family company that operates 4,000 stores in seven European countries. Despite the company's heritage that goes back over 100 years, Reitan is at the forefront of social media engagement and Mokkelgard presented several examples, such as using an app to challenge customers to become "coffee inspectors." After two months, the company's Norwegian 7-Eleven stores had a 25-percent increase in coffee sales and 50 percent of all coffee bought was rated by customers using the app.

Another social media campaign involved changing the store signs for two weeks on the company's "Press Bureau" stores to names like "Banana Bureau," "Ice Cream Bureau." The result: a 14-percent increase in sales for the two weeks.

The next session, entitled, "Dependable Loyalty," featured Bill Hanifin, managing director of Hanifin Loyalty; Pat Lewis, partner, Oasis Stop 'N Go; and Dr. Pradeep Sinha, CEO, Contata Solutions.

Hanifin had three important words for the audience: disruption, (in)security and context. "We live in an age of test, measure, evolve more than ever before," he said. "And, we are moving beyond Millennials -- more than 150 million Americans are comfortable with using technology, not just young people."

He warns that people are unsettled by the news report of major data breaches and they feel insecure about putting their data online compared to before. "Leadership in data stewardship will create competitive advantage," Hanifin asserted.

Sinha talked about how big data deployments were percolating from Fortune 500 companies to mid-sized companies. Today's big data users are greatly reducing their processing time, he said, noting that Macy's has run their price optimization program down from 22 hours to 20 minutes.

Now, by tying big data to loyalty programs, companies are turning this technology from a cost-reducer to a revenue producer, Sinha said.

One convenience store retailer already reaping the benefit of data and loyalty is Oasis Stop 'N Go. Lewis explained to the audience how he deployed big data to answer such questions as:

• which customers respond best to reward offers?
• what is the right offer for the right customer?
• what is the ideal participation rate?
• how do reward offers affect consumer price elasticity?
• what is the ideal earning velocity?

Lewis predicted this will dramatically change the retail landscape. "Basically, these tools give Main Street businesses Amazon-like capabilities," he said.

In the final session of the day, John Eichberger, vice president of government relations at NACS, the Association for Convenience & Fuel Retailing, spoke about the work of The Fuels Institute and the future of fuels.

"Who will determine the future of fuel?" he asked. "The consumer."

Eichberger cited both NACS and government research to present the future prospects for several different fuels, including diesel, E85, electric and natural gas. Of the various options, he noted that for the near term, diesel appears to have the strongest growth prospects.

"Every retailer I've spoken with says they are adding diesel to their stores," he said.

Allowing that other fuels are projected to see growth as well, including E85, compressed natural gas, and even battery-powered electric, these fuels will be a very small percentage of all fuels used even when projected out over the next 10 years, said Eichberger.