Leveraging customer engagement to improve the operational efficiency of social commerce start-ups

Abstract

Despite the surge of literature on customer engagement (CE) in social media, few studies shed light on how to leverage CE to improve firms’ operational efficiency. This research proposes a fresh framework using social media data to improve demand forecasting accuracy, resulting in a cost-efficient inventory control strategy. Drawing upon the resource mobilization perspective in particular, this research quantifies the construct of CE from the view of input–output efficiency evaluation using the Data Envelopment Analysis (DEA) model, and then leverages CE to forecast consumer online demand and reconfigure inventory management strategy. Using a 71-week data set from a social commerce start-up in China, this research shows that this new framework dramatically increases demand forecasting accuracy and reduces operational costs in inventory management. This study contributes to the literature by demonstrating the value of social media data in improving operational efficiency, particularly regarding inventory management.