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Lessons from Sam Walton: How a social-local strategy brings the human touch back to business

Ed. note: The following post, penned by Hearsay Social CEO Clara Shih, originally appeared in Advertising Age.

Long before the digital age, all business was local and social. Customer engagement was paramount. Shopkeepers, barbers, and Avon ladies alike intuitively knew that their ability to connect with customers would often determine whether or not a purchase would be made. They also understood that investing in building long-standing relationships with customers would result in repeat visits and loyalty.
For many successful proprietors, this meant knowing customers by name, remembering their likes and dislikes, and being on hand to answer product questions. Years before founding Walmart, at the age of 26, Sam Walton put these principles to work as a variety store manager in Newport, Arkansas.

Sam Walton's original Walton's Five and Dime store, now the Wal-Mart Visitor's Center.

On stage at fMC (Facebook’s marketing conference) earlier this year, Walmart CMO Stephen Quinn hearkened back to this bygone era:

“If you went back 120 years ago, a retailer would be a pillar in the community. [Retailers] would know not only everybody, but their likes, what they thought was interesting, what new products they might be interested in.”

So, what happened to the shopkeeper who cared about customers? The answer is very simple: technology.
Technology has enabled two of the biggest changes to sweep across retail: national mega-chains and more recently, e-commerce. Both have played key roles in driving down prices by introducing greater transparency, efficiency, and economies of scale. But this has come at a cost: the customer experience now feels “mass produced.”
In his eloquent foreword to my book, The Facebook Era, 1-800-FLOWERS founder and CEO Jim McCann captures it perfectly:

“Past technologies helped drive down costs, improve reach, and grow the business, but in the process we lost something very important: customer connection. I have missed the direct customer dialogue I had in our retail flower shops. The digital age has felt largely transactional in comparison.”

A central theme of fMC last month was how social media provides a way to put a human touch back into business. Several Facebook executives, including David Fischer, Mike Hoefflinger, and Chris Cox, took the stage at various moments to explain how Facebook’s new Timeline redesign provides businesses with an opportunity to “reintermediate” a human touch in their online interactions with customers. Less advertising, more engagement. Less cookie-cutter, more authentic. Less corporate, more local.
Slowly but surely, even the biggest retail organizations around the world are awakening to this sea change. Quinn and his team at Walmart have recommitted to a “social-local strategy” that I think would have made Sam Walton proud.
Walmart has launched thousands of Facebook Pages, one for each of its brick-and-mortar stores. Designated store employees who have received special training on social media are responsible for maintaining the pages, such as by responding to customer questions and issues, sharing targeted local promotions, and discussing town news or events, such as the local football game. Quinn says social media is enabling Walmart to “go back to the future” by providing an authentic local customer experience, but at scale.
Walmart is not alone. A growing number of brick-and-mortar retailers from Lululemon and Home Depot to 24 Hour Fitness and Quiznos are embracing social-local. According to a report published last month from Mainstay Salire, local Facebook pages already outperform corporate pages by a factor of 40 (Download the report here.)

Like Walmart, 24 Hour Fitness offers gym members a tool for finding their local center’s Facebook page, which publishes more relevant information and local promotions.


Disintermediation is fine for highly commoditized brands and products, but if you want to build brand differentiation and customer loyalty, there are no shortcuts to authentic engagement. Certainly, social-local requires greater coordination than having brand pages alone, but like anything, what you get out of social media is proportional to what you put in.
Retail e-commerce sales topped $61.8B in Q4 of 2011, but this still amounts to less than six percent of total retail sales. Embracing a social-local strategy allows retailers to capitalize on the shift in consumer behavior toward digital, social, and mobile technologies at the store level where most of the transactions are still taking place, even while investing in growing e-commerce channels over time.
It turns out shopkeepers, barbers, and Sam Walton had it right all along. Customers want to be treated like real people, not an audience segment. Having 20 million fans secures bragging rights for any brand, but from the perspective of the fan, it’s generally far more engaging and rewarding to be part of a smaller, more intimate community.
Today, social-local is a really good idea. As more of your customers get smartphones, check in to your store locations, and begin demanding authenticity with a human touch, it will soon become mandatory. In my next article, I will discuss how retailers should go about establishing and operationalizing a social-local strategy, as well as why I believe brands have no choice but to do this. Please stay tuned.
Watch Walmart CMO Stephen Quinn talk about his social-local marketing strategy below:

The future of retail is local

Walmart founder Sam Walton believed that retail was fundamentally a local business, and he stressed the importance of staying close to the consumer. Using this fact as a jumping off point, Facebook VP David Fischer asked Stephen F. Quinn, EVP and CMO of Walmart U.S., how the multinational retailer, with thousands of stores in countries around the world, uses technology to still go local today.

David Fischer, Facebook VP of Advertising and Global Operations, and Stephen F. Quinn, EVP and CMO of Walmart, discuss local social retail.

Quinn responded:

If you went back 120 years ago, a retailer would be a pillar in the community. [They] would know not only everybody, but their likes, what they thought was interesting, what new products they might be interested in. And they would have to curate and make choices to fit in that box. They really became a part of that community.
As retail evolved so that scale became a big part of the game, much as it had earlier done in manufacturing, it became really critical that you understood customers through market research, those types of things, and that you used your scale to lower cost and therefore lower prices. Hence, Walmart played right into that picture. I think what’s so fascinating about that story and ours at Walmart is we’re kind of going back to the future here, where the expectation is rapidly changing from our customers and even our associates that we will know and be a part of that community. And, to do that, we have to be able to–in our case–scale that kind of knowledge across 4,000 stores.
We’re just barely starting to see the potential that [going local] offers us. We’re going to have to absolutely become a part of those communities and know what’s going on in that community. Being dumb about what’s happening is not going to be acceptable anymore for us or any other large organization.

Along with Facebook, Hearsay Social shares this vision of global businesses going local through social. The Hearsay Social platform was actually built from the ground up so that enterprises could engage with their customers via social media at every level of the organization–from brand to region to local stores, agents, or employees.
Hearsay Social CEO Clara Shih recently spoke to this shared vision in an Advertising Age editorial published this week, entitled Facebook’s New Business Pages Means Marketers Must Evolve:

The Internet disintermediated a human touch from many transactions, which is perfectly fine for highly commoditized products. I’m excited to see how the growing richness of social media engagement such as timeline stories are re-intermediating this sense of emotional connection and human touch. I have no doubt marketers will rise to the occasion and quickly realize this sea change in social marketing is actually an opportunity of a lifetime to transform our brands with authentic conversations and customer relationships at scale.

We’ve embedded Fischer’s conversation with Quinn below, which took place last month at the Facebook Marketing Conference in New York.

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