Blog 5

After reading the groundswell article, I feel that one of the best strategies I’ve seen companies utilize are viral videos. From my experience, the intention of the majority of blogs, youtube videos, facebook groups, etc. are all to warn potential consumers on the pitfalls and deficiencies of a product. This negative news will go a lot further than a post dedicated to how great a product performs (with the sneaking suspicion that the individual who posted it is in someway benefiting from the post itself). I feel as if a blog, review, or video simply presenting features is not as effective as a viral video. A viral video creates buzz about a product. Sometimes it is obvious as to what the video is promoting, other times no logical person would make the connection. Personally, I stay away from advertisements online, whether it is promoted via facebook, twitter, blog sites, etc. due to the constant possibility of malware that could be installed on my personal machine without my knowledge. Rarely will anyone within my online social network circle make a post regarding a product unless if there is a discount/deal of some sort. This makes it inherently more difficult for businesses and marketing teams to successfully target consumers through online social networks without giving something in return.

While companies may use social networks with the genuine intention of enhancing consumer experiences, for everyone legitimate advertisement/website there are dozens of fake sites with the intention of defrauding the individual. Numerous social networks have users posting links to sites promising free products after testing or through a lottery – most of which are fake and attempting to extract private information from the end-user. This makes many individuals weary of any online form that may ask questions regarding a user’s experience – even if it is a genuine effort by a company trying to improve their product. Even though online surveys are easy and fast to fill out, it is difficult to ascertain the validity from both ends (whether or not the survey is legitimate, and whether the survey answers are truthful).

I believe the best social media tool that companies can use in order to gain insight or create consumer experiences is through blogs or twitter. These two social media tools allow companies to post what they are currently working on, advancements and breakthroughs, and show that they are listening to what their consumers are asking of them. It allows the company to receive feedback from consumers through comments and replies, and from this feedback the company can take them into consideration. However, just as the groundswell article states, consumers alike can create blogs or twitter accounts with the intention of spreading awareness of the unhappy consumer. Another interesting strategy that some companies utilize is “leaks”. Sometimes a company may intentionally leak details of a new up and coming product in order to create a frenzy. Interested buyers spread the word by reposting blog sites, retweeting posts, etc. essentially doing the company’s marketing job for them. While consumers may feel that this privileged information is a goldmine, it shouldn’t be completely dismissed that the company might have allowed the information to be disseminated into the public. A great example is the next generation iPhone that was found in a bar (http://gizmodo.com/5520164/this-is-apples-next-iphone). With each previous iteration of the Apple iPhone released like clockwork (every June/July) a lot of consumers are eagerly waiting for the debut of the next generation iPhone. Rather than publishing this information themselves, it can be argued that Apple intentionally leaked the product to the public, created viral marketing for the soon-to-be-finished product. Typically, whenever such tech sites gain similar inside information, they are served with cease and desist papers from Apple’s legal team. The news about the 4G iPhone has been public around 24 hours without any retraction. Allowing consumers to think that the information is not meant to be seen by their eyes, excitement and momentum builds behind the debut of the next product. Similar marketing ploys have been used by recording artists that leak their CDs onto the internet.

Wal-Mart

- What do you think about the privacy issues associated with all of that data and the amount of personally identifiable data they are able to capture. Does it bother you? Do you trust them with it?

I am personally comfortable with the amount of information that Wal-Mart’s IT system collects, mostly because I have never cashed a check or participated in any service that Wal-Mart provides where my social security number or driver’s license number would be collected. Despite the fact that I have yet to have any sort of experience that pertains to sensitive information, I am still not comfortable with the idea that Wal-Mart actively collects and preserves the information, especially without the consumers’ knowledge. Unidentifiable information (such as what other items I purchase along with milk and bread) is fine. While some consumers may be uncomfortable with Wal-Mart knowing their most embarrassing purchase habits, so long as Wal-Mart doesn’t place a name to the items they are only ensuring that they provide the products you desire. The possibility of personal information being compromised is not worth the risk, especially if the owner of the information does not know or allow Wal-Mart to retain it. While the non-identifiable information is considered fair game, it is hard to justify the ability to find out a consumers mortgage amounts, court dates, driving record, and creditworthiness in order to provide low prices everyday. The article doesn’t specify if this information is frequently accessed, or whether if Wal-Mart just has the ability to. Either way, I feel that Wal-Mart is overstepping its boundaries and violating consumers’ privacy by accessing this information.

- What aren't they doing with technology that they could; that is, are they using all of the technology that is available to them to capture insights and create great experiences for their customers and, if not, what could they do?

I believe Wal-Mart is using IT in the most efficient way for its own interests. As the article states, some individuals are uncomfortable with the amount of personal information that resides in Wal-Mart’s database. However, not many individuals know the type or amount of information that they collect on their purchasing habits because of the inconspicuous use of the information. If during a visit to Wal-Mart, an ad or Wal-Mart employee offered suggestions on past and previous purchases, it would most likely make people feel on edge having a constant feeling of being watched/followed. As the article states, Wal-Mart does not care what each person buys individually, but rather what sells as a part of a larger basket. Wal-Mart finds more interest in what else you buy with Strawberry Pop-Tarts rather than who you actually are. Based on this information, they can extrapolate this information with all of the other buyers, and create savings and profits based off of the other products purchased in relation to Strawberry Pop-Tarts.

- What impact do you think they are having on their suppliers - making them better and more efficient or driving them too hard and reducing their profitability. Again, try to keep this in the context of technology.

I feel that the relationship between Wal-Mart and its suppliers is somewhat imbalanced and unfair. The bargaining power of Wal-Mart clearly outweighs the bargaining power of its suppliers. Since Wal-Mart is such a large buyer, there is very little room for negotiation. It seems doing business with Wal-Mart is more of a necessary evil in the eyes of its suppliers. A suppliers’ choice is to (a) do business with Wal-Mart and reap the benefits of Wal-Mart’s expansive presence or (b) do business with lesser-known retailers at a higher markup, but without certainty to future business and profits. Being in bed with Wal-Mart guarantees future business and inventory turnover -- the same benefits that cannot be guaranteed by smaller retailers. I believe at the moment Wal-Mart and its suppliers are at an equilibrium that both parties can endure. If at any point Wal-Mart begins asking too much of its suppliers (which result in losses rather than profits for the supplier) then inevitably the suppliers will go out of business (and Wal-Mart will most likely replace them with a similar supplier). The chance that the opposite occurs (where Wal-Mart goes out of business) is far less than the former. For this reason I see the relationship as more negative than positive. Wal-Mart already advertises low prices for its consumers. These low prices are absorbed by the suppliers rather than Wal-Mart. In addition, Wal-Mart presses its suppliers to RFID tag their inventory, making it easier for Wal-Mart to track what is in its stores. While the technology is cheap, it still takes away from the thin profit margins the suppliers are already experiencing.