Social media in, cloud computing out for Canadian retailers

A majority of Canadian retailers are embracing social media technologies, but giving cloud computing the cold shoulder, according to a recent survey looking into the tech buying patterns of local sellers.

All of the 34 mid-to-large sized retailers surveyed by the Retail Council of Canada (RCA) had a Facebook page, nearly 85 per cent used Twitter, about 50 per cent engaged in blogs and chat forums and over 30 per cent used YouTube.

By contrast only six per cent of the respondents said they were “definitely inclined towards” cloud computing technologies, and nearly half indicated they were “somewhat inclined” while 15 per cent said they were “definitely not inclined,” according to the survey results.

Cloud computing essentially involves the provisioning of shared resources, software, and information as a service over the Internet. Users manage to avoid upfront infrastructure ownership costs by paying low subscription fees to cloud computing providers.

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“Few retailers have warmed up to the idea of cloud computing,” said Andrew Siegwart, vice-president of membership for RCA.

“While cost savings appear to be the key driver to trial, retailers need the assurance of security, privacy and reliability, among others to be convinced,” Siegwart said.

It was only in the long-term investment (three to five years) plans of retailers that cloud computing figured prominently, he said.

Top technologies on the retailers’ short-term (one to two years) investment were:

  • Collaboration, social media and customer relations management (67 per cent)
  • Business intelligence and analytics (61 per cent)
  • Mobility (55 per cent)
  • Risk management and compliance (42) per cent

Long-tern investment targets were:

  • Cloud computing/ software-as-a-service, infrastructure and network management (39 per cent)
  • Collaboration, social media, green IT, security (32 per cent)
  • Service oriented architecture/desktop virtualization (29 per cent)
  • Self service portals, mobility solutions, unified communications, CRM (26 per cent)

The Retail Council’s report on reflects and earlier study released in May by CA Inc. , an software and IT service company, which found that  41 per cent of North American firms — compared with 60 per cent of European firms — said they do not use cloud computing apps unless these are “thoroughly vetted for security risks”.

Respondents believed cloud storage was too risky for certain types of data — such as financial information and intellectual property (68 per cent); health records (55 per cent) and credit card information (43 per cent). A mere 14 per cent said cloud computing would actually improve their company’s security status, according to CA.

“Europeans hold more favourable perceptions about the state of cloud computing security,” according to Lina Liberti, vice-president of product marketing at CA Security.

Mobile adoption

Only a handful of retailers are using mobile tech to promote their businesses, according to the survey. Such tools are used for: displaying product information, customer reviews, mobile commerce, store locator services and newsletters. Siegwart of RCA this may because mobile technology is still in its early stages in Canada compared to other countries.

Early success encourage adoption

Social media success by businesses such as shoe retailer Zappos which encourages its employees to tweet , Tim Horton’s which has a smartphone apps that helps customers locate their nearest java fix, are encouraging Canadian retailers to dive into social media and mobile technology.

Siegwart said retailers tend to use social media tools to achieve multiple purposes – mainly marketing, promotions and generating general brand awareness.

Only half of the retailers use social media to drive traffic to their Web sites, read reviews about their businesses or for CRM purposes.

But challenges remain, according to Laurie Mah, marketing expert and independent contractor who conducted the survey for RCA.

“Determining ROI (return of investment) remains a common complaint about social media,” she said.

Retailers are uncertain how much they should be investing in social media and what kind of pay back they can expect, she said. “Many retailers simply accept that social media involvement is a necessity in today’s marketplace.”

Controlling the social media chatter

Retailers appear to have very little choice buy to dive into social media, according to Dr. David Jacobson, director of emerging technologies in Canada at PricewaterhouseCoopers.
Consumers have evolved into what Jacobson calls “selfsumers”.

“Selfsumers are confident, technologically sophisticated and less susceptible to old-school hard sell tactics,” he said.

Even before making a purchase, buyers are apt to do their research about online, check out reviews about the item on Facebook, community sites or other social networks and compare it with similar products.
If a customer is disappointed with a products performance or a company’s service, he can always tweet his dissatisfaction a multitude of “followers”, said Jacobson.

He said retailers need to learn how to monitor the social media conversations around their brand or market space in order to develop appropriate marketing strategies.

“If retailers have no presence in the social media space, they lose the opportunity to listen in on the chatter and somehow control the outcome to their favour,” Jacobson said.

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