The latest research data from Engagement Labs shows that “consumer conversations” about a brand, which includes face-to-face discussions as well as on social media, drive 19 percent of U.S. retail sales.
That equates to about $7 trillion of all consumer spending in the U.S. And for fashion apparel and accessories, that would amount to more than $20 billion. Researchers at the firm said Amazon dominates these consumer conversations “and is the focus of more consumer talk than any other retail brand, which equates to increased sales.”
Authors of the report, which was based on data derived from the company’s proprietary “TotalSocial” scoring and analysis, described consumer conversations about a brand as “a formidable competitor across every retail category,” which is why the researchers said “it is imperative for retail marketers to leverage strategies that motivate consumers to talk about their brands.”
The firm noted that while Amazon dominates social talk, other retailers and brands can leverage this consumer behavior as a way to compete against the online giant. In fact, Engagement Lab’s research shows several top retail brands have an edge in consumer conversations — especially those that occur off-line.
Ed Keller, chief executive officer of Engagement Labs, said while “it is obvious that Amazon is redefining the retail industry, there is still tremendous opportunity for retailers to compete.”
“Our research found that several retailers outperform Amazon in off-line conversation — which is equally important in driving consumer sales as the conversations happening online,” Keller explained. “By understanding consumer conversations, and optimizing marketing campaigns based on this data, retailers have the opportunity to increase their marketing [return on investment] and revenue.”
Keller and his team offered insights into how retailers are succeeding in brand conversations. At Target Corp., for example, researchers at the firm said its TotalSocial score is stronger than Walmart “and it ranks just behind Amazon with a very competitive online sentiment score. Target’s success in sparking online conversations is driving e-commerce sales for the brand.”
For Macy’s Inc., the last holiday shopping season revealed a strong consumer sentiment, which surpassed Amazon. “In addition, Macy’s online and off-line brand sharing scores — the extent to which people are sharing or talking about a brand’s marketing or advertising — are a close second to Amazon’s, and the retailer has higher off-line and online influence scores than Amazon, indicating that more influential consumers are talking about Macy’s than Amazon.”
Costco, meanwhile, ranks second to Amazon is its TotalSocial score by delivering “high off-line scores for volume (how much the brand is being talked about), sentiment (how positive the conversation is) and influence (how well the brand connects with the everyday influencers).”
Authors of the report noted that Costco’s off-line sentiment and off-line volume scores were better than Amazon’s. “Costco’s consistent focus on wholesale prices and quality merchandise is a strategy that resonates with its members in their offline conversations,” researchers said in the report. “However, the report found Costco does not perform as well online, revealing an area for improvement for the brand.”
And at Kohl’s Corp., the firm’s analysis found that the retailer “has such strong off-line sentiment that it’s a close second to Amazon throughout the year, but similarly to Macy’s, it surpasses Amazon for off-line sentiment during the critical holiday shopping season.”
Engagement Labs pointed out that Kohl’s has made significant investments in its omnichannel strategy, “which motivates brand sharing and both online and offline discussion. For example, mobile now accounts for 67 percent of its online traffic.”
Other notable retail brands with strong off-line and online brand conversations include Sephora and Ulta.
Keller said each “conversation metric can impact sales for retail brands. To better compete, retailers should think about ‘talkability’ when creating their marketing campaigns. By activating consumers to talk positively and share their content off-line and online will impact their ability to compete in a rapidly changing retail environment.”