Companies turn to social media for consumer research

While most consumers may treat social media sites, such as Twitter, Foursquare and Facebook as avenues to interact with friends and post musings, brands like Samuel Adams and Wal-Mart are turning them into logical extensions of market research divisions. And many companies are just starting to figure out how to utilize the huge amount of information and insight available.

When Wal-Mart was keen to find out whether to stock in its stores lollipop-shaped cake makers, it decided to study Twitter chatter. On the other hand, MAC Cosmetics brand of Estée Lauder asked vocal social media users to vote on discontinued shades to be brought back. Squishable, the stuffed-animal brand, solicited active Facebook feedback before settling on its new toy’s final version. Samuel Adams asked social site users to give their vote on yeast, color, hops and other qualities before creating an American red ale called B’Austin Ale, a crowdsourced beer that received rave reviews.

Ideas unearthed through social conversations

Frito-Lay, for record, is developing a potato chip flavor that would have involved in the old days a series of several focus groups, detailed research and trend analysis. Now, it prefers to use Facebook. Visitors to the Facebook app of Lay are asked to come up with new flavors and then register their preferences by clicking an ‘I’d Eat That’ button. The results so far, show a beer-battered onion-ring flavor among the most popular in Ohio and California, whereas a churros flavor is quite a hit in New York. Frito-Lay North America’s chief marketing officer, Ann Mukherjee mentions this as a new and efficient way of consumer research. “We are going to know a ton of new ideas.”

Customer sentiments come to the fore

The Gilt Group’s chief marketing officer of, Elizabeth Francis pointed out: “It tells us exactly what our customers are interested in. It is amazing we can get that sort of real feedback, as opposed to sheer speculating.” The company does so by asking customers to vote on specific products they want to be included in a sale, and also setting up Facebook chats between customers and engineers to help refine its product line. Underlining the trend of many top brands turning to social media sites, for consumer research, a news report in The New York Times by Stephanie Clifford states:

“Wal-Mart acquired the social media company Kosmix last year for an estimated $300 million, chiefly because of Kosmix’s ability to extract trends from social media conversations. The unit, now called @WalmartLabs, looks at Twitter posts, public Facebook posts and search terms on Walmart.com, among other cues, to help Wal-Mart refine what it sells.”

And all this is not mere speculation. The conclusions are backed by loads of data being generated in social media. The product engineers could use it for deciding what merchandise to carry, and where.

Social media makes for efficient R&D

In one such analysis done last summer, for example, @WalmartLabs concluded that those small bites of cake on luscious lollipop sticks or cake pops were becoming popular. Starbucks had then just started getting them in their chain, and people were already talking about it. @WalmartLabs research team alerted merchants at the company headquarters. The merchants had heard about the popular product, and hence decided in favor of carrying cake-pop makers in their stores. They were so popular that the company wants to bring them back in circulation this holiday season.