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Matthew Smith has been a business and financial journalist for more than a decade. He previously worked with the Financial Times Group, reporting from New York on company buyouts and refinancing in the wake of the Global Financial Crisis. He started his career reporting on the funds management industry in Sydney.

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Published 15 November 2012 04:46, Updated 21 November 2012 07:33

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Lorna Jane’s new “command centre”, designed to facilitate the next phase in the active wear company’s global digital strategy, sounds like something straight out of HBO’s TV series The Wire.

Six plasma screens will glow around the clock with noiseless chatter generated by a vast and fragmented social media world, as Sam Zivot, Lorna Jane’s digital strategist, and one or two colleges, monitor every Tweet, Facebook post, Pinterest reference and Instagram “like” relating to the two largest active wear companies in the world.

The two companies on Zivot radar are Under Armour, the retail brand listed on the New York Stock Exchange with a $US5.85 billion market capitalization; and Lululemon Athletica, the $10.7 billion market cap Nasdaq-listed sports brand. Combined, these companies easily take the largest share of the active wear market in North America and the world.

The strategy behind the new command centre is the social media version of “sneaking up from behind” established players to steal their market share.

“We have to ask, ‘How do we disturb the giants?’ We can’t compete head to head with these companies, we have to think, ‘How do we outsmart them from a guerilla perspective?’” Zivot says.

The idea, Zivot adds, is to monitor the dialogue the companies have with their social media devotees then look to engage those people, essentially hijacking or stealing the conversation.

This is a new type of digital strategy for Lorna Jane, the women’s sportswear retailer founded by Lorna Jane Clarkson 22 years ago that now has 104 stores.

The company has built a formidable brand in Australia and has moved as well as, if not better than, anyone else from the traditional retail world to the internet – it now takes in as much revenue from its website sales as it does from 20 physical stores and it is continually engaging people through social media networks.

Zivot says the company generates content and spurs conversations with people, making Lorna Jane’s Facebook page – which generates 10 per cent of sales – one with a highly engaged presence.

In March, Lorna Jane opened its first store in California. By the time this story is published, the company plans to have more than half a dozen American shop fronts and it has set a target of 12 stores in the US by the end of the 2012.

Zivot says his approach to Lorna Jane’s digital strategy in the US will be different to that on which the company has built its reputation.

The intelligence he gathers by monitoring social media through the new command centre, he expects, will alone be enough to give Lorna Jane an edge against the more established and larger brands.

“Gone are the days when he or she who has the largest marketing budget wins,” GE Capital’s chief marketing officer, Suzana Ristevski, says.

This comment, Ristevski admits, comes from a person with a marketing background in a world where marketing budgets have traditionally held the most clout in defining a brand strategy.

“We are now in a time where he or she who understands the customer the best, and has the smarts to be able to develop strategies to service those customers, wins,” she says.

The new environment opens the door for entrepreneurs or a mid-sized firm to beat large players and make a profitable business.

Certainly Gabby Leibovich, the co-founder of the Catch of the Day Group, the eCommerce business based on an online retail model offering a deal of the day, understands how cheap and effective social media can be.

He says his group has collected about 2.5 million members across its various sites without spending any money on marketing.

“We’ve started opening the wallets slightly in the last year or so … but I’m very much against it,” Leibovich says.

“I don’t like spending money on marketing. We’ve found that there’s nothing more exciting than growing the database by word of mouth.

“Social media is being called right- now word of mouth on steroids.”

Both Leibovich and Lorna Jane’s Zivot say Facebook is still the most effective tool in a digital media strategist’s toolbox.

When it comes to what platform works best, Leibovich recommends businesses give potential customers the opportunity to interact any way they like.

“If they want to use the iPhone, we’re there – we’ve got a great app,” he says. “You want to use the iPad – use the iPad – do it on the toilet, do it on the train to work. Whether it’s via email or social media, it doesn’t matter.”

Deloitte Digital director Steve Carlisle recommends businesses attempt to understand where their customers are so they can maximise their digital strategies.

“There’s no point in setting up a strategy to say, ‘I’m going to be on Facebook, if all of your customers are actually tweeting’ ... [or] saying, ‘I want to be across Twitter and Facebook’ when the reality is you’re selling a product and people just want to know how to use it.

“Maybe it’s a YouTube channel with some short two minute videos that you want.”

Once a business understands what it wants to be and what customers it is wants to attract and they’ve picked the right channel to start with, the strategy becomes, “Where do you drive them?” Carlisle says.

“You drive traffic to the website … or you drive to Facebook because that’s where we want you to be but pick one spot and use your other channels to actually direct people to that central spot,” he says.

Zivot warns that people aren’t on social networks to be sold to. “When you are a brand, you are competing against 300 friends, not other brands. You have to behave like a friend. If you do that they will treat you like a friend and interact.”

As Lorna Jane begins to execute its US guerilla digital strategy, Zivot is mindful of the need to adapt in the fluid digital environment.

Facebook is “somewhat less cool lately”, a reflection, he says, of a generation continually on the lookout for what’s next.

Zivot likes Pinterest and is impressed by the interaction he gets with Instagram users.

How do businesses know if any of this interaction relates to sales?

“How much revenue does a billboard generate?” Zivot responds.

The real power for social media over traditional marketing, he insists, is when users mix their own brand and their own content with a business’s brand and content.

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