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Facebook gives users more ways to like retailers

BY Dan Berthiaume

A new collection of five emojis created by Facebook gives users of the social media platform new ways to express themselves that could have huge implications for retailers.

Facebook has released “Reactions,” a set of five emoji that expand upon the “Like” button. The new emoji are small icons representing love, haha, wow, sad and angry. Users will be able to respond with the expanded set of emotions to all posts, including advertisers, pages and accounts. The emoji will not be placed in Facebook-owned social products such as Instagram, at least for the time being.

Reactions will work on both the mobile and desktop versions of Facebook. Mobile users will see the emoji pop up when they touch the Like button, while desktop users will see the emoji when they hover over the Like button or click on it. Interestingly, one emoji that was piloted, “yay,” did not make the final cut.

One very interesting aspect of Reactions for retailers and brands is that there will be no option to turn the emoji off. Facebook was concerned the user experience could become diminished or even confusing if emoji were not universally available. Thus retailers need to start creating strategies to handle how this expanded set of emoji will affect their Facebook customer engagement activities.

Mobile consumers in particular will have an easier time expressing negative emotional responses to retailer posts. In general, consumers who may not bother writing a negative comment may be encouraged to simply click sad or angry, and haha could also be negative depending on context.

On the plus side, it would also be easier for consumers to express positive emotions in response to retailer posts. And overall, the emoji will allow deeper insight into consumers’ emotional feelings about a retailer’s products and actions, with the chance for quick remediation if needed.

“We understand that this is a big change, and want to be thoughtful about rolling this out,” said Sammi Krug, Facebook product manager, in an official blog post. “For more than a year we have been conducting global research including focus groups and surveys to determine what types of reactions people would want to use most. We also looked at how people are already commenting on posts and the top stickers and emoticons as signals for the types of reactions people are already using to determine which reactions to offer. We will continue learning and listening to feedback to make sure we have a set of reactions that will be useful for everyone.”

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NRF raises the volume on patent trolls again

BY HBSDealer Staff

The National Retail Federation today renewed its push for patent reform legislation, calling on Congress to pass laws that would put an end to “shakedown settlements” from patent trolls.

“Effective patent litigation reform legislation is about stopping the patent trolls’ lucrative business model of asserting meritless patents and getting shakedown settlements,” NRF senior VP David French said in a statement submitted to the Senate Small Business Committee. “Only Congress can pass reform needed to put them out of business for good."

“Retailers who once engaged with small technology providers no longer invest in their innovation out of fear of increased litigation brought by patent trolls,” French said. “Patent trolls have created a chilling effect on retailers’ incorporation of technology in their stores and online.”

The Senate Small Business Committee is holding a hearing today to examine the impact of patent trolls on small businesses.

The hearing also follows the recent release of a study by Unified Patents showing that a record number of patent disputes were filed in U.S. District Court and at the U.S. Patent and Trademark Office last year. Two-thirds of the court cases came from patent trolls.

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As loss widens for Sears, Lampert offers laundry list of reasons

BY HBSDealer Staff

With another downwardly mobile quarter in the pocket for Sears Holdings, chairman Eddie Lampert is qualifying the company's plight on a number of external forces.

In an open letter to shareholders, Lampert said that Sears doesn't deserve the flak it gets when upstart companies like Amazon, Tesla and Uber are not criticized for losing money.

"Because of Sears and Kmart's longstanding history and cultural impact, we are targeted for criticism when our results are poor," he wrote. "But it is unfair to evaluate our approach through the rearview mirror without acknowledging the changing circumstances in our industry as well as our bold attempts to change the way we do business to meet this changing reality."

Lampert added that moves to increase the minimum wage, as well as disparate tax rules for online retailers, has made it especially challenging for apparel retailers to remain competitive.

"We are now seeing more and more retail stores shut down and the tax base of many municipalities eroding due to the hollowing out of the sales tax base," he wrote.

The impact of an unusually mild winter was also to blame, which Lampert pointed out had "a cascading effect on many retailers, leading to reduced spending and heavy discounting on winter clothing and related items."

Net loss widened for Sears in the fourth quarter ended Jan. 30, increasing to $580 million from the previous year's loss of $159 million.

Meanwhile, revenues were down 9.9% to $7.3 billion from $8.1 billion in the year-ago period.

Additionally, Kmart and Sears Domestic comparable store sales were down 7.2% and 6.9%, respectively, in the fourth quarter — an improvement from the trend displayed in the first three quarters of 2015, according to the company.

Another silver lining is that the company reduced its net debt position by about $1.0 billion from the year-ago period.

"While our fourth quarter comparable store sales were improved over the prior three quarters and January 2016 was our best monthly comparable store sales performance of the year (-4.5%), the unseasonably warm weather and the associated competitive promotional environment resulted in higher than expected markdowns and significantly lower gross margin in our key apparel categories," said Lampert.

"The impact on our margin rate from the highly promotional environment had a greater impact than the comparable store sales improvements," he added. "As we head into 2016, we remain committed to restoring Sears Holdings to profitability. Generating positive Adjusted EBITDA is our most important area of focus, and to that end, we plan to accelerate our transformation into a leading member-centric integrated retailer and take action, where necessary, to optimize our cost structure and improve our gross margin realization."

For the full year, revenues were down 19.6% to $25.1 billion, but the company did close the gap a little in terms of net loss: $1.1 billion this year compared to 2014's loss of $1.7 billion.

Lampert acknowledged the need for "significant improvement" in the apparel business, which will be a priority for the company heading into 2016.

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