Impact of Social Media on Organized Retail Players

1

Executive Summary
During the last 30 years the industry sector of “retail business” and FMCG has seen the
emergence of various new business models to cater to the needs of the customers. “Last mile
reach” and “pricing of the goods” are the key factors or the key performance indicator of this
industry sector. Quality and the convenience associated with the point of the purchase can be
considered as the major concerns from the point of view of the customer. During the last
decade the arrival of the social media as a medium of advertisement and the medium of
interaction has changed the dynamics of the business completely. In the current study we are
judging the impact of social media over organized retail players like Wal-Mart, Tesco and
ASAD.
2

Table of Content
Introduction...........................................................................................4
Literature Review....................................................................................9
Business drivers.......................................................................................11
Recommendations....................................................................................13
3

Introduction
Almost fifteen years ago social media made an entry in the life of individuals as a
replacement of real-life meetings. It was unimaginable for the experts that within no time,
social media emerged as the forum where individuals started discussing diverse issues. The
integration of search engines with the social media heralded a new era of the connectivity
when “like-minded people” started coming together to share ideas with each other. Business
fraternity started taking note of this assembling of the individuals sharing common interests
(Abubakar,2012).
During the same period, the retail industry of the world was passing through a dramatic
phase. Organized retail players like Walmart, Tesco and others started encroaching in the
local markets. They took advantage of the economy of the scale by bringing down the prices
of the products. They emerged as victorious in this price war. In the meantime, the online
stores also made an entry in the retail industry sector (Weisberg,2012). Online retail industry
activated a social media interface surrounding its services. For instance, every time a
consumer purchases a product from Amazon it gives them an opportunity to post a comment
that other prospective customers can read. A better “last mile reach” of the online stores and
the social media interfaces attached to them helped them in winning the race under the
premium segments of the retail market (Han,2011).
This sector took a new shift when organized retail players like Walmart and Tesco decided to
launch their online variants to serve the customers. It was also the time when all of a sudden,
social media became a crucial factor for all retail industry sectors. Under the present
circumstances, the retail industry sector has become a volatile market place where the
competition is fierce. The customer has become the king and social media is emerging as the
key impulse generator (Phelan et.al,2014). Most of the marketers of the world are describing
it as the “era of new realities” in the retail industry sector. Social media is acquiring the role
4