Long before the digital age, all business was local and social. Customer engagement was paramount. Shopkeepers, barbers and Avon ladies alike intuitively knew that their ability to connect with customers would often determine whether a purchase would be made. They understood that building long-standing relationships with customers would result in repeat visits and loyalty. For many successful proprietors, this meant knowing customers by name, remembering their likes and dislikes and being on hand to answer product questions. Years before founding Walmart, at the age of 26, Sam Walton put these principles to work as a variety store manager in Newport, Ark.

On stage at fMC (Facebook's marketing conference) earlier this year, Walmart CMO Stephen Quinn evoked the earlier era: " . . . a retailer would be a pillar in the community. [Retailers] would know not only everybody, but their likes, what they thought was interesting, what new products they might be interested in."

What happened to the shopkeeper who cared about customers? The answer is simple: technology. Technology has enabled two enormous changes to sweep across retail: national mega-chains and more recently, e-commerce. Both have played key roles in driving down prices by introducing greater transparency, efficiency and economies of scale. But this has come at a cost: the customer experience now feels mass-produced.

A central theme of fMC was how social media provides a way to put a human touch back into business. Facebook executives, including David Fischer, Mike Hoefflinger and Chris Cox, took the stage to explain how Facebook's Timeline redesign provides an opportunity to "reintermediate" a human touch into online interactions with customers. Less advertising, more engagement. Less cookie-cutter, more authentic. Less corporate, more local.

The biggest retail organizations around the world are slowly awakening to this sea change. Quinn and his team at Walmart have recommitted to a "social-local strategy" that would have made Sam Walton proud.

Walmart has launched thousands of Facebook pages, one for each of its brick-and-mortar stores. Designated store employees who have received special training on social media are responsible for maintaining the pages. They will respond to customer questions and issues, share targeted local promotions, and discuss town news or events, such as the local football game. Quinn says social media is enabling Walmart to "go back to the future" by providing an authentic local customer experience, but at scale.

A growing number of brick-and-mortar retailers from Lululemon and Home Depot to 24 Hour Fitness and Quiznos are embracing social-local. According to a report published last month from Mainstay Salire, local Facebook pages already outperform corporate pages by a factor of 40.

Disintermediation is fine for highly commoditized brands and products, but if you want to build brand differentiation and customer loyalty, there are no shortcuts to authentic engagement. Certainly, social-local requires greater coordination than having brand pages alone, but like anything, what you get out of social media is proportional to what you put in.

Retail e-commerce sales topped $61.8B in Q4 of 2011, but this still amounts to less than 6% of total retail sales. Embracing a social-local strategy allows retailers to capitalize on the shift in consumer behavior toward digital, social, and mobile technologies at the store level, where most of the transactions are still taking place, even while investing in growing e-commerce channels over time.

The old shopkeepers, barber, and Sam Walton had it right all along. Customers want to be treated like real people, not an audience segment. Having 20 million fans secures bragging rights for a brand, but from the perspective of the fan, it's far more engaging and rewarding to be part of a smaller, more intimate community.

Today, social-local is a really good idea. As more of your customers get smartphones, check in to your store locations, and begin demanding authenticity with a human touch, it will soon become mandatory.

ABOUT THE AUTHOR

Clara Shih Clara Shih is CEO of Hearsay Social.