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Discount retailer Loehmann's Gives Social Media a Try. Will it Work?

Loehmann's this month joins scores of consumer-facing businesses who are jumping on the Social Media bandwagon. Today, Inside Members received this loosely-branded email, urging them to text, join twitter, and connect via Facebook for all things Loehmann's.

Loehmann's appeal to customers via "Social Media" or Web2.0 tools suggests the company is smartly reconsidering how it interacts with its customers.  Perhaps Loehmann's execs finally realize there's room for improvement and that selling at discount prices doesn't automatically mean market share. That's a good thing. It also suggests Loehmann's is thinking hard of how to evangelize itself as an accessible, with-the-times, retailer.

But while it is a noble effort Loehmann's Social Media strategy is far from being solid.

First, Loehmann's risks setting the wrong expectations. While customers do want to know about new promotions and discounts and will be tempted to follow the instructions and text "INSIDER" to the number provided, their initial excitement will soon be replaced with dismay when they begin to get the semi-weekly announcements Loehmann's now sends via mail and email.

Second, the campaign seems to mix two types of audiences. Customers with PDAs such as iPhone and Blackberry can easily open emails at the store and use the code from the email--they do not need text duplicate. But then there are the less mobile-savvy users, those who primarily use text messaging, and to these, facebook and twitter may not be the right channel. So it seems that Loehmann's is trying everything hoping to see what will stick. Definitely one strategy, but it may not be the one I'd choose for a company who's strapped for cash.

In essence, what Loehmann's is saying is:

Dear Ms Customer: You can now learn about our promotions in any way that's convenient to you. You can continue to receive our mailers, get our emails, opt for text messages, get updates on Facebooks, or follow us on Twitter.
(Internally, Loehmann's is saying "gotcha! Now we can spam you till end of time" oh, and "thanks for helping us cut the cost of marketing by 30% in the coming year.")

And what Ms Customer is likely to say in response is:

Dear Loehmann's: Thank you for finding more ways to send me information. How about we start with making sure that your promotions get to me before the promotion ends, extending your return/exchange period to 30 days, having nicer in-store customer service, letting us take more than six, nine, or whatever the number du jour might be into the fitting room, and finding a way to make us look less horrid in front of those large mirrors in the community fitting room?

 

Fun aside, this is an extremely difficult time for retailers who thrive on consumers' discretionary income. Discount fashion retailers are no exception. For Loehmann's, this is not the first downturn having submitted for Chapter 11 in 1999. For Loehmann's to win this downturn, it must first do better at listening to its customers and build optimal experiences around its customers' needs before trying to patch the cracks with a Facebook fans page or a twitter account. Only then, when it is focused on the customer experience (and less on outbound marketing), will it be able to capitalize on the power of passionate, fashion-minded customers.

10 Ways Social Media Will Change in 2009

With over 948 Diggs, 99 comments, and dozens of emails, the piece I wrote as a guest author on ReadWriteWeb has generated interesting and enriching conversations with people who are truly curious about the next generation of Social Media. I greatly enjoyed the deep thoughts ReadWriteWeb's readers have shared on the site and I'm reposting the article here for everyone's convenience.

 

10 Ways Social Media Will Change in 2009

Written by Ravit Lichtenberg / January 27, 2009 10:00 AM / 99 Comments

"Social media" was the term du jour in 2008. Consumers, companies, and marketers were all talking about it. We have social media gurus, social media startups, social media books, and social media firms.

It is now common practice among corporations to hire social media strategists, assign community managers, and launch social media campaigns, all designed to tap into the power of social media.

But social media today is a pure mess: it has become a collection of countless features, tools, and applications fighting for a piece of the pie.

Facebook, a once groundbreaking online community, has become the ant colony of third-party applications. Twitter users now have a dozen or so additional applications they can use to overcome Twitter's ever-present shortcomings. People spread themselves across a number of tools and maintain different networks on each (large portions of which they don't even know), making it nearly impossible to decide what to share and with whom.

Users, marketers, and companies face an incredible amount of noise, too. For every new application that relies on a network, another crops up that helps users manage it. While "eyeballs" used to be the coveted metric, both ad publishers and investors now realize that having smaller well-targeted niches can lead to much better returns than marketing to one large undifferentiated mass of users.

Meaning and connection -- two key anchors of all things social media -- are corroding by the day as people's ability to organize their experiences and find the relevance of their networks declines. Social media, in essence, is bumping up against its own ceiling, no longer able to serve the needs of those living within its walls; and for these reasons, social media as we know it is changing course.

Social Media is Evolving

Social media is morphing into a holistic experience that speaks to people's social needs in new ways. If you are a CEO of a startup who is focusing on the next generation of social media, here are 10 areas you'll need to take into consideration in the coming year:

1. It's About People

We're moving away from "users," "customers," and "shoppers": social media is bringing back the human element to all digital interaction. People now deliberately seek meaningful connection, self-expression, and a relevant and receptive community. Forrester's Social Technographic research and Charlene Li and Josh Bernoff's Groundswell represent a huge step towards a new kind of behavior-driven segmentation, but companies that want to succeed will need to take it further and tap into people's evolving needs, using the social media context as the new baseline.

2. Creating Meaning and Value

Social media will no longer be about features and applications. These have become a dime a dozen. People will be looking to get tangible and relevant value out of their social experience; they'll be looking for meaning and for order. "Social media online is no different from social media offline," said Brent Csutoras at a recent Social Media Club event. People will be looking for ways to keep their networks going regardless of device or platform. They will connect around meaningful topics and have live and simultaneous conversations within parameters they themselves define, which will bring relevance back to their interaction with others.

3. Enabling Convergence

FriendFeed -- now both a destination and an API -- is growing rapidly, despite a miserable wiki-like interface and interactive experience. That's because people are at a loss when it comes to pulling their conversations together from various sources and assigning meaning to them. Companies that deliver beautifully designed, easy-to-use, searchable, flexible, aggregating platforms will become more important than any social media tool by itself. Deb Schultz, a San Francisco-based web strategist, compares social media to an art exhibit and says people will "curate their live presence through the web ecosystem as needed." Noovo and Zannel are examples of early attempts to enable this.

4. Building a Truly Cross-Platform Experience

The iPhone experience has changed the playing field for users, companies, and developers. In Q1 of 2009 alone, Apple sold 4.4 million iPhones, and Google's Android and the new Palm continue to build on the cross-platform, application- and service-driven model. In the new landscape of social media, people are seeking solutions that seamlessly cut across mobile, web, and live interaction, hopping on and off them like double-decker buses, all with the same pass.

5. Creating Relevant Social Networks

People will create, join, and seek social networks that enable them to have meaningful and relevant experiences with each other. They will measure their return on investment (time spent, level of disclosure, etc.) in replies, comments, their ability to influence, and the value of their learning. Rachel Masters, VP of Strategic Relationships at Ning -- a social network that grew a massive 388% in 2008 -- says, "the Internet is confusing because it can be used to replicate almost any previous medium. Ning addresses this by delivering social networks that allow people to connect around the things they love."

6. Innovating in the Advertising Space

Ad publishers and the attached ecosystem will continue to lose revenue until they realign their understanding of what appeals to people who are conversing, connecting, and expressing. The next phase of social media is a gold mine of targeted niche demographics. Nuconomy, an Israeli startup, experiments in creating and delivering highly targeted, dynamic display advertising. Shahar Nechmad, Nuconomy's co-founder and CEO, says that, on average, Nucomony customers see six to nine times higher click-through rates on targeted ads than on non-targeted ones. "People do click on ads and buy things in the same session," says Nechmad. Ad agencies and publishers that are able to quickly realign their thinking and create an innovative and relevant product discovery experience will gain significant competitive advantage.

7. Helping People Organize Their "Old" Social Media Ecosystem

As aggregating platforms enter the field, people will seek to bring order to the endless bits of information available to them. Video tagging, conversation archiving, taking cloud computing to the next stage, and making search more relevant are some of the new baseline requirements. These represent a significant opportunity for companies willing to undertake this massive endeavor.

8. Connecting with the Rest of the US and the World

With some exceptions, today's active social media users are early adopters. In the next one to two years, the benefits of social media will cross the chasm and reach the mainstream, not only in the US but around the world -- especially in community-driven regions like Southeast Asia and countries like Brazil, Russia, and Germany. Companies will need to understand the explicit and implicit differences between adoption patterns in different countries and adjust their products to meet these different needs.

9. Preparing for New Social Media Jobs

It has been a harsh year for marketing firms. Companies are looking to divert marketing dollars to more targeted social media destinations. And this is just the beginning. David Spark, founder of Spark Media Solutions, says that businesses will need to go beyond paying people to Tweet or put up a Facebook page. Social media's new job descriptions will call on subject-matter experts who can plan for relevant interaction within networks and aggregating platforms and bring together products, services, and people.

10. Making Money

The next phase of social media will bring plenty of lucrative opportunities. With the rise of aggregating platforms, social networks, and new mobile and location-based features, we're bound to see an increase in targeted and personalized ads, "freemium" packaging, revenue sharing between strategic partners, and a flow from the offline world to online social engagement (such as when real goods complement virtual ones).

Social media has forever changed the way people use technology to interact with others, but it can no longer satisfy people's needs in its current form and must change course.

The new form of social media will be about creating "whole products" and complete experiences, all in real time, across the web, mobile, and live. Each user will be able to create his or her own experience using tools, features, and apps that magically coalesce. People will be able to move seamlessly through information that is available to them anywhere, anytime, sharing rich content with a rich set of groups and networks that they themselves define. Innovative companies that are able to listen to these needs and deliver products based on them will not only survive but thrive in the coming months and years as people eagerly advance on the inviting waters of the new social alchemy.

ReadWriteWeb: 10 Ways Social Media Will Change in 2009

A guest article I wrote was published today on ReadWriteWeb. The question of where Social Media is heading has been a center of conversation in the startup circles as well as in large corporation and most recently--government. This post originally was titled "Why Social Media Is Dead." As I interviewed people and engaged in fascinating dialogs, it has morphed into a discussion of evolution.

Social Media as a concept is by no means dead but it is changing drastically--as most innovations do. If this topic interests you, read more, comment, and join the conversation.

Social Media Simplified: The Power of Live Social Tagging and Passion

Jeff Keni Pulver has been around the tech startup community from its very early days. He now throws breakfasts around the world, and especially during conference dates, with a mission to bring together entrepreneurs and anyone interested in startups.

I attended my first Breakfast with Jeff in Israel last year on the first day of The Marker's Com.Vention. It was a bizarre experience walking into what felt like a cellar, seeing people walking around wearing name tags, each holding a sheet of small stickers on which they wrote things and stuck on people they didn't know.

I was was just getting to know the Israeli startup scene and found the freedom with which people walked up to one another and put stickers that said random things like "Rockstar," "Quiet" and "Delicious" refreshing.  Someone tried to explain to me what was going on but frankly, I just wasn't ready for putting stickers on anyone at that point.

Since then almost a year has passed. I left my job in Corporate and opened Ustrategy. I've gotten to know the Israeli startup scene better thanks to people like Carmel Gerber of Playce and Shahar Nechmad of Nuconomy.  I've also gotten to know the Silicon Valley startup community quite well and the bloggers, CEOs, and investors who make the Valley what it is. We're having important conversations about the next generation of startups and how to help people and companies succeed going forward. I'm truly cherishing this experience and the opportunity to be a member of this community.

And last week I attended my second Pulver breakfast, this time at San Francisco's Sears Fine Foods--somehow ending up again at the lower level of a restaurant (I'm sure Jung would have had something to say about that). And there I was again, being handed two name tags and a sheet of stickers for Social Tagging.

But this time I was ready. And I knew almost everyone in the room which helped.

As people sat down to eat, Jeff explained that he started out as an odd kid--shy and introverted. When he was just starting to network,he realized how difficult it was to have meaningful conversation at these events. So he introduced live tagging. You write your name on a tag and add a statement about yourself. You stick another tag someplace you don't mind others touching (very important, ladies!), then you walk around and as you meet people, you write stuff on tiny labels and put them on that extra tag. It's not as complicated as it sounds and Jeff has a video on his facebook page explaining how you do that.

At the heart of the matter is making it easier to connect with others in more meaningful ways. It's about creating conversation starters that lead to more (who wouldn't want to know why someone wrote "VC money" on them), and opening opportunities to ask questions ("It says here you came straight from SFO...where were you before?"). I ended up with a dozen tags--one that said "let's have lunch"; another that said "superstar."

Seated at a red vinyl booth, over pancakes and a fruit bowl, I had fabulous conversations that went much deeper than customary at such events. Random people came up to me and asked questions that somehow seemed more relevant and personal--in the very best way.

Jeff's passion for bringing people together is inspiring (he writes about it here). What's amazing is that he does it on the analog side of the experience--making live what others have been trying to do online.  Jeff's candor as he spoke about what led him to start Social Tagging was quintessential Social Media: simply creating ways for people who chose to be there to have conversations that was meaningful to them.

And now Jeff is launching Social Media Jungle--an un-conference emulating the experience of digital social media, only live, and he has taken it on the road starting with this year's CES.

Thanks, Jeff! (You're a Rockstar.) (Let's have lunch.)

  

Twitter Finally Brings Back People Search. Mazal Tov.

I have been complaining bitterly about Twitter's ridiculous inability to provide simple features like organizing and searching your followers, being able to page through your Tweets, etc. Others have covered Twitter's shortcomings as well, such as during the MacWorld conference back in January 2008 when Twitter was down for three whole days.

Having worked on various web products from concept to launch, it's both aggravating and fascinating to me how Web 2.0 has brought with it an unspoken agreement between companies and users that Beta state can last forever and that sub-par functionality (at least until someone comes up with something better) is the new baseline.

Today, ReadWriteWeb reports Twitter is finally making good on its promise to enable people search. Hurray. You can now actually enter a person's name and get results. Ground breaking, I know.  Maybe next will be a choice of how many tweets your page display. Oh wait. That's in the roadmap for 2012.