The Impact of Social Media on Retail Business Model - Research Paper Example

 The Impact of Social Media on Retail Business Model 1. Introduction The continuous expansion of social media worldwide has resulted to the alteration of business practices and values in firms of different size and culture. The research developed in this field has led to the assumption that the impact of social media on business activities has been critical. For example, in organizations promoting social media, the level of employee performance has been increased (AT&T 2008, p.2). Indeed, employees ‘pay attention to what their online contact mention’ (AT&T 2008, p.2). In other words, due to social media employees worldwide have emphasized on their performance as a factor influencing their image, as professionals, in the job market (AT&T 2008, p.2). In retail businesses, such issue can also appear but under the following term: that the organization involved supports the use of social media in regard to employee communication or in regard to various business sectors, such as customer services, supply chain management and so on. In any case, the potential value of social media for the retail sector cannot be ignored. In fact, social networking seems to be a continuously expanding trend, a fact that should be taken into consideration by marketers in the retail industry worldwide. According to a research published by the Tuck School of Business at Dartmouth (2011), the number of people across USA subscribed to social networks has been significantly increased between 2008 and 2010 (see Figure 1 below). It is assumed that the social media would be a valuable tool for managers and marketers in retail businesses worldwide. However, in order for the specific tool to be effective it should be combined with other business practices (Kreitner and Cassidy 2012), meaning especially the training of employees so that they are able to handle social media as a key means of communication and cooperation. On the other hand, Howley (2010) noted that the performance of social media in businesses internationally is not standardized; in fact, it has been proved that the impact of social media on business activities is higher in certain industries compared to others (Howley 2010). For example, firms operating in the construction industry may not be benefited by social media at the same level such as the firms operating in the retail industry (Howley 2010). Figure 1 – People subscribed at least in one social network in USA, comparison between 2008 and 2010 (Source: Tuck School of Business at Dartmouth 2011, p.3) At the same time, Constantinides, Romero and Gomez Boria (2008) have highlighted the following issue: the relation of social media with the retail industry has an important implication. The web and the social media have not only enhanced the performance of the industry’s firms but ‘they have also offered to consumers much more control, information and power over the market process’ (Constantinides, Romero and Gomez Boria 2008, p.1). This means that through social media consumers are able to criticize products/ services contributing in the development of brands’ image in the context of the global market. In other words, the social media ‘can set important dilemmas to managers worldwide’ (Constantinides, Romero and Gomez Boria 2008, p.1) and lead to the transformation of traditional business strategies. For example, in the past the view of a customer in regard to a firm’s product would not be so important, as now, for the firm’s image in the market. Reference is made especially to the case of customers who are members of social networking sites. In USA, the value of social media for the retail industry is reflected in the following fact: ‘about 300,000 businesses, one third of them small-businesses, have a presence on Facebook’ (Swartz 2009, p.1B). In any case, in USA, as also in other countries, the use of social media in the retail industry has been proved to offer significant benefits, such as the ability to increase the customer base rapidly, the ability to launch new products/ services quite quickly and the ability to enter a new market without developing long-lasting preparation processes (Swartz 2009). 2. Research Question – Presentation and Analysis The Research Question of the proposed dissertation can be described as follows: How can retail businesses use social media as a tool to improve productivity and profitability and predict future prospects? According to the literature published in regard to this issue, the use of social media in retail industry can highly promote the industry’s productivity and profitability, but also to help understand the industry’s future prospects. At this point, the following fact should be highlighted: the involvement of social media in the retail sector may not be direct, a phenomenon also common in other industries. For example, it is possible, for certain employees of a particular retailer to use social media without their employer to be aware of the specific fact, i.e. without social media to be a common practice across the organization (Wollan, Smith and Zhou 2011). Moreover, it is possible for businesses to use different methods for related the social media to their activities; for example, a firm may use the social media only for hiring staff while another firm may use the social media only for marketing purposes (Hinchcliffe and Kim 2012). In this context, when checking the role of social media in the development of a firm’s productivity and profitability it would be necessary to examine in which way the social media could support business activities more effectively. From another point of view, it has been noted that the social media cannot be effectively embedded in a particular organization, at least as a business practice, unless it is aligned with the organizational culture (Belleghem 2012). This means that social media, when it is used only periodically for supporting specific business needs, may not be quite effective, an issue that would be also examined through this study. 3. Methodology 3.1 Research Design The research methodology employed in the particular dissertation would be structured as follows: primarily, a literature review in regard to the subject under examination will be developed. Literature would incorporate both primary and secondary sources that can help to understand all aspects of the research question. The findings of the literature would be critically analyzed and compared to the findings of the empirical research, also used in the proposed study. The empirical research would be necessary in order to capture current market trends, as related to the research question, and to explore certain issues that have not been highlighted in the existing literature. The empirical research part of the study would be divided into four major parts: the presentation/ justification of the research method and the data collection method, the demographics, i.e. the characteristics of the participants, the presentation of results and the analysis of the results. In the last part of the research method, i.e. the analysis of results, graphs will be used for explaining the research findings more effectively. Also, the findings of the empirical research will be discussed by referring to the findings of the literature in order to identify any potential inconsistency in regard to the issues under discussion. 3.2 Data Collection The empirical research employed in this study will be based on a survey, conducted through a questionnaire that will be sent to participants through the e-mail. The participants will be chosen using specific rules: people of different professional background will be chosen while effort will be made so that both genders are represented equally. The questionnaire will be sent to individuals working in the central offices of four important retail chains in USA: Wal-Mart, Home Depot, Target Corporation and Sears Holdings Corporation; 200 questionnaires will be sent aiming to receive at least 100 questionnaires completed. The questionnaire will include 12 questions, related to the study’s subject, followed by suggested answers. The questionnaire will be divided into three parts: the first part will include demographical data of participants, such as gender, age, position in the company and so on; no personal data of participants, such as name or address, will be included in the questionnaire. The second part will include the questions/ answers while the third one will include a note towards the participants in regard to the reason of the study and the safety of the information provided. 3.3 Schedule The schedule of the proposed study is presented in the Gantt chart below. It is clear that each of the study’s parts needs to be completed within a particular time framework. However, because of the potential appearance of unexpected problems, a period of 1 week has been added at the end of the project for covering any potential gaps in case that the time required for the completion of one or more parts of the study is proved as inadequate. As made clear in the Gantt chart the time necessary for the completion of the study has been estimated to 7 weeks. Gantt chart – schedule of the dissertation Week/ Activity 1 2 3 4 5 6 7 Gathering of material (literature) – development of the list of participants Communicating with participants through e-mail – questionnaire is sent to participants Development of the introduction/ literature review parts of the study Questionnaires returned from participants are reviewed and evaluated/ results are categorized Results are analyzed/ the Research Methodology part of the study is developed Conclusion and Recommendations part of the study is developed/ The study is reviewed – changes and amendments are made The study is reviewed again/ additional changes are made, if necessary References AT&T (2008) The Business Impacts of Social Networking. Retrieved June 11, 2012 from http://www.business.att.com/content/whitepaper/WP-soc_17172_v3_11-10-08.pdf Belleghem, S. (2012) The Conversation Company: Boost Your Business Through Culture, People and Social Media. London: Kogan Page Publishers. Constantinides, E., Romero, C., and Gomez Boria, M. (2008) Social Media: A New Frontier for Retailers? European Retail Research, Vol 22, pp.1-28. Retrieved June 11, 2012 from http://www.utwente.nl/mb/nikos/publications/ecpapers/constantinidessocialmedia.pdf Hinchcliffe, D., and Kim, P. (2012) Social Business By Design: Transformative Social Media Strategies for the Connected Company. Hoboken: John Wiley & Sons. Howley, E. (2010) Harness the Power of Social Media: An Alternative Guide for Design & Construction Firms. Chicago: ZweigWhite. Kreitner, R., and Cassidy, C. (2012) Management. Belmont: Cengage Learning. Swartz, J. (2009) More marketers sign on to social media. USA Today. Retrieved June 11, 2012 from USA Today: http://www.usatoday.com/educate/college/highered/case-studies/soc-media-mktng.pdf Tuck School of Business at Dartmouth (2011) The business of Social Engagement, Innovation and Collaboration. Retrieved June 11, 2012 from http://www.tuck.dartmouth.edu/cds-uploads/publications/pdf/TheBusinessofSocial.pdf Wollan, R., Smith, N., and Zhou, C. (2011) The Social Media Management Handbook: Everything You Need To Know To Get Social Media Working In Your Business. Hoboken: John Wiley & Sons. Read More