G2 – Instagram (MDS, LB, and Osmose)

Research Question:

How Can Osmose Leverage on Instagram’s Strengths to Improve its Level of Customer Engagement on Instagram so as to Successfully Compete With the Other Online Fashion Retailers in Singapore?

Brief Information on Companies Analysed

MDS, Love, Bonito (LB), and Osmose are online fashion retailers offering apparels that balance both style and affordability to meet the needs of young women in Singapore. While all three retailers offer similar style of clothes that are fall within the same price range, they differ in their levels of customer engagement on Instagram, in terms of likes and comments garnered from each post. LB is the leader among the three companies, with 89.5 thousand followers, posted an average of 1.1 post per day during the March 2016 and each post receiving an average of 526 likes and 11 comments. MDS is a close competitor, with 60.2 thousand followers, posted an average of 4.1 posts per day  during March 2016 and each post received an average of 526 likes and 11 comments. In contrast, Osmose only has 9383 followers, posted an average of 3.6 posts per day during March 2016 and each post received an average of 71 likes and 2 comments.

 

Instagram As A Strategic Tool

The use of social media to communicate with customers is no longer an additional communication option but a strategic tool widely recognized and employed by the fashion industry to interact with customers with the goal of achieving positive business results.The three most commonly used social media platform by fashion companies are are Facebook, Instagram and Twitter, with Instagram being the most preferred platform.

The allure of Instagram to fashion companies can be attributed to the following reasons, namely, migration of young millenials from Facebook to Instagram, the high engagement level achievable on Instagram, and the visual nature of Instagram that brings about immense benefits that can be harnessed by the fashion companies.

Since the target customers of MDS, LB, and Osmose comprise mainly of young women and  there is a trend of teenagers and young millenials migrating from Facebook to Instagram, there is a higher likelihood of reaching and interacting with their target customers on Instagram. Notably, the trend of these cohorts of the demographic switching from Facebook to Instagram is particularly obvious in Singapore. Hence, this increases the importance for these online fashion retailers to be on Instagram so as to reach and interact with their existing and potential customers.

In addition, given that empirical findings have proven that positive business results can only be achieved by companies who have a superior capability in customer engagement on social media and that Instagram provides the highest level of customer engagement among the social media platorms used by fashion companies, they collectively highlight that actions taken on Instagram can have a direct impact on the business results of a company, further emphasizing the importance of the actions taken by these online fashion retailers on Instagram.

Moreover, Instagram’s visual nature allows these companies to market their products and satisfy customers’ desires to keep abreast of new trends and offers easily, thereby effectively capturing and retaining their interests in the brand on a global scale. However, an analysis of the relationship between the level of customer engagement and they types of  posts by the three online fashion retailers show that their followers are less receptive to marketing content, with the exception of marketing content designed as information on new trends, and are instead more receptive to content that involves lifestyle images and friendly or empowering messages.

Unlike MDS’ posts, which comprise mainly of information on upcoming new designs, Osmose’s posts were mainly on marketing of its current products. Unlike LB’s marketing content, which was delivered as information on new trends, Osmose’s marketing content was delivered as straightforward selling of its products. Therefore, to successfully capture and retain customers’ interest in the brand so as to achieve a higher level of customer engagement, Osmose can adopt the strategy of MDS, to strike a better balance in their marketing and non-marketing content, or the strategy of LB, to employ native advertising, which is to deliver its marketing content as information that meets the informational needs of its followers.

Additionally, comments are generally made only with the presence incentives across the three companies analysed. Hence, Osmose should intensify its Instagram campaign of incentivizing its followers to comment on and tag other Instagram users in its posts so as to encourage dialogue within the comments section as well as to magnify its online presence. Accordingly, Osmose should be able to increase and retain customers’ interests in its posts, proxied by the number of likes and followers, and increase the level of interaction between and among its customers, proxied by the number of comments on its posts.

With the adoption of the above recommendation, Osmose should see an improvement to its level of customer engagement on Instagram, which will thus help them compete more effectively with the other online fashion retailers and assist them in their pursuit of better business results.

 

 

G2, Group 2 – Zappos

CEO tony
CEO Tony Hsieh

Research Question:

How has Zappos’ corporate culture driven its social media efforts in building a brand community?

Introduction

Zappos.com Inc. (Zappos), is an online shoe and clothing retailer known for its commitment to providing incredible customer service to create an extremely loyal customer base (Roggio, 2011). Customer satisfaction begins with a business’ employees, for a customer will love and trust a company more when the company is well loved by its employees (Faeth, 2015).

Zappos Corporate Culture

Zappos’ culture emphasizes on high employee engagement – through providing a family-like working environment that is fun and empowering, as well as creating and maintaining a high level of customer engagement – through the provision of assistance and answers to enquiries driven by the main goal of achieving customer satisfaction.

According to Frei & Morriss (2010), what sets CEO Hsieh and his team apart from their competition is their deep awareness that Zappos’ culture is its most important asset. Given that “Service is a by-product of culture” (Zappos’ former chief financial officer as cited in Frei & Morriss, 2010) and that Zappos has a reputation for delivering exceptional customer service, it can thus be inferred that Zappos’ culture of achieving high level of customer satisfaction is not merely a vision set by top management but also deeply entrenched and practiced by its employees.

In return, Zappos is rewarded with satisfied and loyal customers, which translate into positive business results that propelled Zappos from a start-up to a company valued at $1.2 billion within a short span of nine years (Hsieh, 2010). With the employees’ strong awareness and acknowledgement that Zappos’ success is highly attributed to their culture, Zappos’ culture is further reinforced and its manifestation can be observed through its communication to and with customers across its different social media platforms.

Zappos’ Corporate Culture and its influences

Our research aims to determine how Zappos’ corporate culture has led to their social media efforts and success in building a brand community and how they can further strengthen and expand that brand community.

Specifically, we will examine how Zappos’ corporate culture has influenced their  1.emphasis on creating real relationships with their customers, and on 2.empowering employees as powerful brand ambassadors. This is based on the important underlying assumption that customer loyalty and satisfaction are better achieved when employees also love the company, which is the argument postulated by Faeth (2015). In addition, we will also analyse how we can 3.enhance Zappos’ brand image by increasing awareness of their corporate social responsibility efforts.

Ultimately, we will analyse how positive engagement of the 3 above factors (in bold) have affected Zappos’ business outcomes respectively, in terms of impacting customers’ behaviour, increasing employees’ satisfaction and engagement and in boosting the overall image of Zappos.

Research Method

While Zappos employs many social media platforms for their customer engagement activities, we will focus our analysis on Zappos’ use of Twitter, Instagram and Facebook. This is because these social media platforms most clearly show the two-way interaction between Zappos and its customers, which will allow us to better understand how Zappos’ culture is manifested, thereby facilitating us in conducting a more meaningful analysis. On top of this, Synthesio, which is used to find out customers’ sentiment, and references to literature review will also be used to supplement our research and analysis.

Value of Study

The value of this study is to explore the drivers of Zappos’ success in their social media use, to identify the social media platforms that have room for improvement and thereafter, to recommend suitable social media strategies that will support Zappos in sustaining its competitive advantages and continue to be the best online service leader and in building their brand community.

For instance, in our analysis of Zappos’ use on social media, we have found that Zappos has very high level of engagement on Twitter and moderate level of engagement on Facebook and comparatively lower engagement on Instagram. We have identified that there is room for improvement for Zappos to better leverage on the benefits that Instagram brings and also to further tap on the large following of 2m fans they have on Facebook. As a result, we will be proposing 3 strategies via Instagram and Facebook to help Zappos increase its level of engagement on these two social media platforms.

zapponians at work
Zapponians at work