When Retail Goes Social, the Customers Go Searching

Here in New York, we’ve noticed a recent uptick in advertising activity for two key players in the Pharmacy Retail category: Walgreen’s and Duane Reade.  Transit posters, TV spots, and new in-store signage are just a few indications that the battle is heating up.  With the summer over, and the cold & flu season approaching, there ought to be a natural seasonal increase in the demand for their products and services.  This led us to ask ourselves, “how well are these two retailers and their competitors actually engaging with consumers online?”

One of our favorite resources to measure brands’ awareness and engagement in digital media is Google Insights, which shows trends in Google search query activity across a wide range of parameters.  Acknowledging that key players in the Pharmacy Retail segment have a significant opportunity to connect with their customers during this time, we chose to take a deeper look at four key players in this space: CVS, Rite Aid, Walgreen’s, and Duane Reade.

Definitions

Before going any further, let’s state the obvious.  By no means do we believe that search engine behavior is 100% congruent to overall consumer behavior.  We are well aware that people interact with brands in a variety of ways, through a variety of channels.  However, in recognition of the trend toward rising adoption of internet-enabled mobile devices, and the near-ubiquity of search engine usage among the US online audience, search engine activity is nonetheless very insightful to marketers.

By measuring volumetric trends in search activity, we can isolate patterns of activity surrounding the aforementioned brand names.  Here are a few types of Google queries that would be reflected in such an analysis:

  • Where is the nearest Rite Aid?
  • How does Duane Reade’s Rewards program work?
  • Are there any good coupons at CVS this week?
  • Will Walgreen’s be offering flu shots this fall?

We have chosen to limit our analysis to the New York City metro region, to allow for the consideration of a regional brand (Duane Reade) without skewing data.

Research

This is how relative search volumes in Google have looked since 2004, and project through 2010:

(Click on the chart to enlarge.  This image is a static depiction of Google’s search query volume estimates in October 2009.  For an updated estimate, see Google Insights for Search.)

As recently as early 2008 (and defined strictly by branded search queries), CVS has a strong #1 position in New York, with the other three all clustered in a distant second place.  In other words, CVS had done a far better job of promoting awareness for itself.  But watch what happens around the second half of 2008… Walgreen’s has begun to separate itself from the pack.

Here’s how the big four break down in terms of their social media efforts on Facebook:

We also thought it would be interesting to look into similar efforts on Twitter:

Notice a pattern?  Not only is Walgreen’s leading the charge, but the proportions are fairly constant across both Facebook and Twitter (two of the primary channels using in social media marketing).  This is especially noteworthy in light of today’s news from comScore, M80 and GroupM illustrating a “correlation between the discovery of brands through social media and search behavior, including increased lower-funnel searches and paid search click-through rates (CTRs).”  Here are some of the high-level takeaways:

  • Exposure to branded social media increases likelihood to query that brand in search engines by 2.8X
  • After querying the brand name:
    • click-through rate on paid search ads increases from 4.5% to 11.8%
    • likelihood of clicking on the brand’s site in organic search results increases by 2.4X

Clearly, a good portion of Walgreen’s growth in branded search query volumes can be traced back to their social media success.  (For more information on the study, see comScore’s press release, “Social media exposure is correlated with search behavior and click-through-rate; Introduces the value of media discovery for advertisers.“)

At Web Liquid, we tend to look at the word-of-mouth/social media space through a paradigm of “service over solicitation.” (We wrote about it back in early 2007: “Service vs. Solicitation“).  Given Walgreens’ social media dominance compared to the competitive set, their strong performance in the online space is not surprising.  With an audience actively engaged through social media, they enjoy many spoils: crystal-clear feedback loops, rapid deployment of promotions, opportunities to demonstrate quick, effective customer service… we could go on and on.

To Walgreen’s we tip our hats.  After all, in the retail business service is a hefty concern… and their progress in the social media space is an indication that they have embraced Service over Solicitation.  As it turns out, however, the increase in search activity around their brand name will, in fact, also spawn demonstrable commercial gains.

About Paul Burani

Paul Burani - Partner, Web Liquid Group. Connect with me on Google+

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