Social media has proved to be an important platform to understand the consumer behaviour and lifestyle of today’s millennial. With the help of advanced analytics tools and techniques like Word Cloud, Sentiment Analytics and other artificial intelligence tools, it has become easier day by day to aggregate social media data and draw insights. In this scenario the social media platform of Twitter being used to set discount prices by Future Group is the new buzz in town. In business some things just click and some just last in our memories as creative experiments. Let’s analyse the scenario in the light of the transactional matrix:
- Number of re-tweets determine the discount amount: Pricing in retail in India has always been a classic MRP story where only a handful of stores could differ their selling prices from MRP. Future group is going to next step by letting its customers decide the discount amount. Wisely they have set an upper limit to the discount being offered. This additional discount can only amount to higher revenue only if there is a significant increase in footfall leading to high number of bills. This is with the assumption that the new discounted price is not eating into the margins which could be analyzed using analytics for pricing-impact. With the help of range optimization the various price ranges available for a particular product can be decided.
- Is Twitter the right platform for Indian masses?: To develop the outcome mentioned in the above point it is critical to reach out to masses and to create as much awareness as possible about the initiative. Now we find some issues in this regard. Firstly the choice of social media. Twitter is not apt as per the Indian internet consumption trends. Twitter has much lower penetration than its competitors like facebook, instagram and Snapchat. The reason for the choice maybe complexity in analysing facebook shares or snapchat stories. Any social media or digital campaign for that matter has a CTR of 2% or 3% max. In such an environment, to ensure high campaign ROI or high ROMI one should concentrate on high-mass platforms only.
- Selecting the Product: The type of audience being engaged depends largely on the product that is being tweeted. For example out of the two times the initiative was taken, once for a laptop bag and second time for a pair of jeans, there was more engagement of the younger segment in case of jeans and achieved a higher discount as the younger generation is present in high numbers on social media platforms. Also, this makes us question how to tap in the loyal middle-aged customers. Since Future group is planning to roll this out for its sister concern retail brands, it will be a herculean task to figure out social media engagement across different demographics as the level of motivation in older segments to be engaged is phenomenally lower. The success of such initiatives is clearly dependant on the type of product being announced. Is it a popular brand, a luxury product, a destination product etc. In such a decision forecasting the new demand for the product to capitalize the net profit from the campaign is crucial. In such instances it is therefore safer to consider products with higher margins.
- Execution: As mentioned the fluctuation in prices will lead to fluctuating demand which may result in a bull-whip effect at the supplier end. In such cases it is important to have a real-time system integrated with the procurement systems of Future group. This if not already placed, will amount to high investments which may not lead to a good profitability due to the unpredictable nature of the whole initiative. Secondly, the discounted prices are decided by a handful of people on twitter but the lower prices are available for everyone walking in the store and buying that product. This is good to establish a good awareness about the campaign but will not be sustainable in the long run. A critical time should be chosen after which this discounted price should be accessible to only members or the ones who have contributed in social media. Other walk-ins of the store should get a discount lower than the decided discount.
adJunkee 