Social Media Helps Retailers Improve Efficiency

According to Aberdeen Group, the use of social media tools is improving communication not only between retailers and customers, but also between retailers and their suppliers too.

The implementation of fast and effective social media tools such as online portals and instant messaging services are allowing retailers to quickly share information with suppliers. The ability to communicate consumer demand and delivery performance results in fewer gaps in supply, lower fulfilment costs and ultimately, happier customers.

At least that’s what a recent report from Aberdeen Group indicates. The report, entitled An Emerging Social Paradigm in the Retail and Consumer Markets, points to the immediacy that social media brings to business communication as a primary benefit contributing to efficiency, even if some are yet to embrace it.

“While many are still uncertain of the real value of social networking within the supply chain, our data indicates that companies using social networking to support their supply chain operations perform better,” the report says.

The report is based on a survey of 89 retailers and consumer market suppliers, of which 44 percent used social networking among employees and trading partners. The report points out that another 37 percent plan to begin using social networking tools within their supply chains in the next one to two years.

Interesting results:

  • Businesses that used social networking delivered goods to customers on time 94.3% of the time, compared to 92.2% for companies that did not
  • Out-of-stock rates were lower at 3.4% for socially networked operations, compared to 7.2% for others
  • Fulfilment costs increased year-on-year by 4.3% for businesses not using social networking – 2.4% for social media adopters

The report demonstrates the power of social networking as an increasingly ubiquitous and rapid mode of communication, and further builds on evidence produced previously by the Boston Consulting Group, which shows that web savvy organisations are more successful in general.

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