Twitter And Retail – 5 Things To Consider Today

Twitter has been under a microscope since Elon Musk purchased the giant for $US 44 billion. Along with taking the platform private, the company has undergone a significant staff reduction and introduced new features that drew ire from brands and the public. This insight focuses on how these changes affect retail brands and five things to consider as they navigate forward with their customer experience.

Table of Content

Introduction

Twitter is a popular social media platform used by brands, government officials, celebrities, and global citizens to communicate using short form messages. It is a platform that is especially popular with a younger audience that advertisers like to engage.

Elon Musk started purchasing stock of the company in January 2022 and amassed up to 9.1% of shares in less than three months. In an announcement on April 25, 2022, Musk officially announced the purchase of the social media platform at $US 54.20/share valuing the deal at $US 44 billion. This news sent shockwaves to the investment, technology, and retail communities and created uncertainties for what will happen in the future.

In the six months after the initial announcement, the Tesla company owner battled with Twitter’s board of directors and executive team on the merits of the deal, understated spambot accounts, and moderation.

The back and forth led to Twitter filing a lawsuit against Musk at the Delaware Court of Chancery with a trial date set for October 17, 2022. Just before the blockbuster trial’s commencement, the prolific innovator and his legal team announced that they will move forward with the acquisition.

The deal was finalized on October 27, 2022 with Elon Musk taking over as the President and CEO of Twitter effective immediately. The company was delisted from the New York Stock Exchange on November 8, 2022.

Next Chapter

Musk coined the company’s new chapter as Twitter 2.0. There is an expectation that the company operates like a start-up with long working hours and an agile development environment. There was discussion to turn the platform into a super mobile application similarly to WeChat. The following highlights key statistics of the new company:

Key Statistics (Users)

As one of the biggest social media platforms, Twitter has seen its user base grown substantially since its 2006 inception. That growth has slowed over the past three years as competing platforms like Instagram, Reddit, Facebook, TikTok, and others expand their footprints.

Key Statistics (Financials)

In the 2021 fiscal year, Twitter generated $US 5.1 billion in revenue and had a net loss of $US 221 million. This was an improvement from 2020’s net loss of $US 1.135 billion. Its main source of revenue is from advertising services (89% of the total) and data licensing (11%).

Key Statistics (Workforce)

The company had over 7,500 employees just before the acquisition was finalized. Parag Agrawal – Chief Executive Officer (CEO), Ned Segal – Chief Financial Officer (CFO), Vijaya Gadde – Head of Legal, and Sean Edgett – General Counsel were dismissed shortly after Musk assumed the positions of President and CEO.

From November 1 to November 18, 2022, more than 4,600 employees (61%) were let go and/or resigned from the company. This number could go up as Musk requested that employees follow strict working conditions moving forward.

Key Development

Twitter was created initially as an ad-support free service for its users. On June 3, 2021, the social media platform announced a new paid subscription service named “Twitter Blue”. This service provided additional features such as tweet edit, undo tweet, bookmarks, unique color themes/app icons, dedicated customer support, and NFT profile pictures, etc.

A week following the takeover, Musk increased the price of this service to $US 7.99 and introduced new features such as the “blue checkmark” vertification that was previously reserved for high-profile confirmed users. Available to those on the iOS mobile platform in the United States, Canada, Australia, New Zealand and the United Kingdom, this feature change was proven unpopular with the public, brands, and the investment communities.

Many malicious individuals/organizations were quick to use the new feature to set up fake accounts for the purpose to deceive users with misinformation, parody content, and/or theft links. The platform has since stopped new accounts from purchasing the service until further notice.

5 Things Brands Should Consider When Using Twitter In Their Customer Experience Journey

Many international retail brands use Twitter as one of many social media platforms (such as Facebook, Instagram, and TikTok, etc.) to engage and communicate with their customers. Other use cases include question/answer using the Direct Message feature, new product/service offering announcement, outage alerts, or marketing/advertising. Some might use Twitter as the only platform outside of its website and/or mobile application to communicate with customers.

With the rapidly changing landscape, here are five things brands should consider moving forward:

Traffic/Activity Monitoring

It is important for brands to monitor their feeds for any irregular activities or malicious accounts created that resemble their own. Eli Lily and Nintendo were negatively impacted by factitious accounts posing wrong information immediately following the new Twitter Blue introduction. In the former’s case, the company has to manage a public relation event when the world found out that it was charging a high price for essential medicine.

[ACTION] Brands should build a process to monitor activities, prepare to report any problems to the platform support, and use their channel to communicate facts immediately. Brands should also collect data on how rampant problems are detected for itself and for their competitors.

Engagement

If a brand uses Twitter heavily to engage customers with posts service levels, product mix, or general communication, it should reconsider other options available as workforce reduction could impact software performance or company support.

[ACTION] Brands should review their customer engagement journey on this platform, determine how they would be impacted financially if the platform stops functioning, and generate a plan to redirect customers to other digital platforms, as needed. Those brands who only use Twitter to engage their customers should formulate a backup strategy (e.g., transfer to Instagram, Facebook, or a messaging platform like WhatsApp), as quickly as possible. In all cases, brands are better off educating their customers on any major engagement changes. Going silent without warning may draw unintended negative consequences.

Marketing/Advertising

Given the platform’s structural uncertainties, potential service level challenges, negative sentiments, advertising on it could generate a higher level of distrust for a brand.

[ACTION] Brands should consider their advertising spend on the platform, how a reduction of spend would impact customer acquisition or retention, redistribute the funding to other platforms (e.g., Netflix, Walmart, Apple, and Facebook, etc.)until current uncertainty is reduced to an acceptable level, and consider complete advertising spend withdraw until further notice.

Feedback and Customer Support

Many brands use Twitter as one of their main sources of feedback or customer support mechanism.

[ACTION] Brands should analyze how much they rely on the platform as a feedback and customer support tool, consider other tools (e.g., chatbots or phone hotlines) to reduce the reliance. Waning down the reliance of Twitter will require customer awareness communication. Ideally, this may be the time for brands to implement new feedback and customer support from companies like Medallia.

Risk Management

With more than 217 million monthly active users globally, Twitter is a perfect conduit to reach a large audience. With a more robust content moderation in place previously, brands can feel comfortable that their presence on the platform matches their core corporate values on equity, diversity, and inclusion (EDI). With the significant workforce reduction and increased factitious account presence causing harm potentially, brands should pause and think.

[ACTION] Brands should re-evaluate how the social media platform’s corporate direction fit their vision, EDI initiatives, and other corporate values. As there is a heightened possibility of misinformation/disinformation and bankrupcy, brands should establish a checklist to guide them on the risks (e.g., reputational, financial, and governance, etc.) operating on this platform. Other departments such as marketing, legal, accounting, and/or technology and the Board of Directors should be consulted, as required.

Final Word

Twitter is going through major changes with Musk’s acquisition, this could have significant customer experience implications on engagement, acquisition, and support. Brands using the platform would be in a better position by building a blueprint to navigate around new challenges operating on it.

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