Case study

Social Media Implementation by SMEs: The Case of Luxury Food Stop

Luxury Food Stop is an award-winning independent grocery business located in a prime town center situation, in a busy market town in Northern Ireland. This third-generation family-owned business, established back in the 1800s, has prospered and grown, and now provides employment for over 100 staff. According to the European Union definition of small and medium-sized enterprises (SMEs), Luxury Food Stop can be categorized as a medium-sized firm. However, it must be acknowledged that in the retail sector many medium-sized firms demonstrate smaller-firm behaviors due to the contribution of part-time employees to their workforce. The company’s brand is all about offering high-quality fresh foods, actively supporting local farmers and producers, and maintaining a colloquial relationship with its customers.

As customers enter the store, great care is taken by a friendly and helpful staff to give them a warm welcome and to greet them with attractive and eye-catching displays of fresh produce. This enticing environment encourages Luxury Food Stop’s shoppers to pause and fill their baskets with first-class groceries. This helps to turn what might be a tedious chore into an enjoyable and traditional “market feel” experience.

To date, the grocery store’s main approach to sales has been based on traditional retail marketing principles, for example, retail atmospherics, customer service, and stock merchandising. External marketing communications have been traditionally based upon newspaper advertisements.

Social Media Marketing in Luxury Food Stop

Two years ago Luxury Food Stop implemented social media as part of its marketing strategy. The store used three social media platforms, namely Facebook, Twitter, and Instagram. Currently, Luxury’s Facebook platform has 1,268 page “likes” and in the month of October 2014, the company posted 20 times. Its Twitter account has 27 followers with 2 tweets and its Instagram account has 13 followers and 5 posts.

Although, the marketing manager has been encouraged by some positive response to Luxury’s activity on social media, the online interaction with customers has not grown or progressed as first anticipated. This has caused the marketing manager to concentrate on Facebook and neglect Twitter and Instagram, which were last updated a year ago. This attitude of disinterest has created a negative rather than a positive impact on customers. The company has lost followers on Twitter and visits to its Instagram page have fallen.

Challenges of Harnessing Social Media Effectively for SMEs

With approximately 7,000 shoppers entering their store every week, customer relationships mean a lot to those at Luxury Food Stop. Many of these customers visit on a regular basis, but the marketing manager does not have a system to record and measure their in-store consumption patterns. This therefore makes it problematic to tailor social media marketing activities, notably Facebook, to specific categories of shoppers. The marketing manager remarked, “I don’t know whether the people who liked us on our Facebook page are customers or not. . . . I imagine most of them are our customers . . . [although] quite a few would be staff as well.”

In truth, the company doesn’t really know how to capitalize on its social media presence. The marketing manager, who has no previous experience of using social media within a business context, has experimented and tried to learn about Facebook with the assistance of colleagues in the IT department. But the majority of the company’s social media posts relate to staff, incorporating pictures of appetizing products available within their store.

Employees do occasionally research how other competitive food-related businesses use social media and the frequency and popularity of their posts, in relation to their own. Even so, no particular time is allocated to social media each week to create, plan, and update effective posts. In fact, the marketing manager acknowledged, “Social media is not our priority and never will be in the near future! . . . We play around with Facebook [but] there is no major strategy with it.”

As an SME, Luxury Food Stop is often constrained in terms of time and human resources, which can mean that its staff is overstretched. A typical day for the marketing manager is spent on advertising, merchandising, pricing, purchasing, and signage plus many other “hands on” activities. Under the pressure of the day-to-day running of the store, the marketing manager said, “I do not have the time, the effort or the inclination to try to work out what it is that I need to do on Facebook to get a bigger hearing. It is not that important and I don’t have the time for it.” The marketing manager’s lack of time, plus the obvious lack of expertise and motivation to use this marketing medium, has caused frustration and undue stress around the implementation of social media marketing. Unfortunately, the funds are just not there to bring in an expert who could help Luxury develop an effective social media campaign.

The Future of Social Media at Luxury Food Stop

The company could use, for example, the popular measurement tool Facebook Insight to determine important and relevant information regarding customers who visit its Facebook site, including their loyalty and the length of each visit. The marketing manager stated, “We don’t really measure the effectiveness. Each week we look at the measures given us by Facebook and that is about it!” These measures provided by Facebook are limited to duration on website, number of unique visitors, level of engagement, and reach of postings. Social media measurement tools on Facebook Insight enable marketing managers to compile detailed information in order to analyze and evaluate customer data, resulting in better-informed management decisions.

The implementation of effective social media measurement would enable Luxury Food Stop to look forward and assess its plans for the coming year. This lack of vision and setting of SMART (specific, measurable, attainable, realistic, and timely) objectives keeps Luxury Food Stop from taking full advantage of the immense opportunities that social media offer.

Summary

This case study has examined the issues faced by an SME grocery retailer in the implementation of social media marketing. It has outlined the challenges, difficulties, and typical time constraints facing SME marketing managers in their day-to-day activities. In order to successfully implement effective social media marketing for an SME, marketing managers need to carefully choose the social media marketing platforms they use, plan their digital activities, prioritize social media marketing, set realistic objectives, and use relevant measurement tools to report their findings. Nevertheless, due to a number of inherent SME characteristics, their marketers are not capitalizing on the potential of social media channels.

Discussion Questions

1. The marketing manager of the Luxury Food Stop has opened two unproductive social media accounts. What are the dangers of doing this without any intention of continuously updating and maintaining them?

2. Discuss the other social media errors that the marketing manager may be creating for the company?

3. Provide examples of how marketing managers of SMEs can overcome their social media challenges?

4. What is the importance of the results to SMEs of measuring social media marketing activities?

5. Provide at least two examples of other social media platforms that Luxury could consider adopting, giving reasons for your choices?

6. Identify the choices of methods available to successfully implement social media marketing.