Social media presents opportunities, dilemmas for retailers

— -- It's early on Black Friday and retailers are overrun with holiday bargain hunters when a shopper starts tweeting to friends that a store has quickly sold out of the big flat-screen televisions advertised on sale.

If the national chain that owns the store is following mentions of the business on Twitter, it has choices: Does it rush more TVs to the store? Provide update tweets on which locations are sold out and which have sets in stock?

The hypothetical scenario represents a slice of the opportunities and dilemmas facing retailers as the social media phenomenon changes the shape of consumer behavior.

Platforms like Twitter and Facebook not only give businesses a chance to promote their wares and build brand loyalty, they also offer an opportunity to respond directly to shoppers and pick up on consumer opinions and trends.

While the new social media landscape means a small customer-service misstep can mushroom into a big public-relations embarrassment on YouTube or Twitter, the ability to monitor consumer tastes also gives retailers access to a trove of information that may help them as they plan product lines and inventory.

"Social media is a great way for companies to interact and get to know their customers and consumers," says Stephen Wyss, partner in the retail and consumer product practice of financial services consulting firm BDO USA. "It's also a really fast and cost-effective way to gather information about new markets."

While these are early days for retailers and social media, big companies are jumping in, in some cases with highly developed strategies.

Wal-Mart Stores, for example, is taking cues from customers via social media in developing its services and selecting products.

"We listen and engage with our customers on Facebook and Twitter on an ongoing basis," says Sarah Spencer, national media relations director for the discount retailer.

Walmart recently introduced a Christmas layaway option based on customer comments on Facebook, and just launched more than 3,500 store-specific Facebook pages in response to feedback from its Facebook "community" — which has more than 9 million members — that shoppers wanted a more local focus, she noted.

Walmart also has added a social feature to its own website that allows customers to vote on the hottest Christmas toys, with real-time tallying. When customers "like" a toy on walmart.com/toyvote, they generate a newsfeed to their Facebook page inviting friends to vote.

"We placed several items from the toy vote online at Walmart.com for pre-order earlier this year, which allowed us to get a sense for the demand of these items. Our online team shared this data with our stores so that Walmart could plan accordingly and ensure the season's hot toys are in stock and available to our shoppers," says Spencer.

Ninety-six of the top 100 global marketing brands use Facebook as part of their strategy, according to Carolyn Everson, vice president for global ad sales at the social media behemoth. Everson said she couldn't think of a major retailer that doesn't at least have a Facebook page.

Some businesses stick with more traditional ads on Facebook pages, while others use more sophisticated approaches, such as "sponsored stories" that allow fans to promote products, and platform integration, in which fans can "like" products on a retailer's web site and broadcast that information to their Facebook friends, said Everson.