Study Reveals Tremendous Facebook Growth for Retailers
The value of Facebook and other social media sites to retailers is greater than previously thought, according to a recent survey conducted by Media Logic, a company recognized for specializing in marketing for a social world. After all, Facebook would be the third most populated country in the world if it were, in fact, a country. Therefore, it makes perfect sense for retailers to be involved with the social media site.
"People use Facebook as a way to organize their social life, and they're considering retail and purchasing to be a part of their social life," says Ronald Ladouceur, executive vice president and executive creative director of Media Logic. "Facebook has become a control panel people are using for their web experience as much as they've been using Google."
Out of 100 retailers participating in the study, all of them have seen tremendous growth on their respective Facebook pages. The four retail sectors surveyed included speciality apparel, speciality hardlines, department/discount and recreation. When the study began in July, only Victoria's Secret could boast over one million "likers" on Facebook. When the study concluded in September, 14 other brands could hoist the same trophy including, J.C. Penney, American Eagle, Kohl's, Forever 21 and Abercrombie & Fitch.
Out of the retailers with less than a million "likers," more than a quarter of the brands saw their fan base grow by 30 percent or more during the duration of the study. Michael's Crafts, Dress Barn, Kenneth Cole, and New York & Company each saw greater than 100 percent growth.
What Causes the Growth?
Retailers’ status updates often include special offers and product updates. By offering these promotions, brands encourage their fans or "likers" to participate and become a piece of the marketing puzzle, which seems to yield great results. Fans repost these offers, and from there the fan base grows.
"Retailers are using Facebook as a way to market, establish and promote their brand," says Ladouceur. "Promotions are being offloaded from Facebook to microsites. Say someone goes to a brand's Facebook page — they either like it or don't. Then they're directed to a promotional engagement, where the retailer can monitor the amount of activity surrounding the promotion. This activity is generally a significant multiplier of engagement."
Facebook also allows retailers to provide an optimized brand experience. By allowing two-way conversations on their "Wall," visitors can feel like they're a part of the experience. Likers can express how much they love a new product, write reviews and ask questions. They can also critizice, but retailers have found that the occasional mistake is easily forgiven and manageable, as seen in the latest Gap logo controversy.
However, some retailers choose to have a "closed wall" vs. an "open wall." The study revealed that limiting this engagement doesn't significantly lower engagement rates. American Eagle has a "closed wall," and its fan base grew 41 percent during the span of the study.
Retailers are able to expand their brand experience using social media, a tool that has emerged to allow retailers to connect their physical and online worlds into a single entity. By reaching out and offering special deals, social media is effective at driving web traffic into foot traffic, as the stores surveyed also saw growth in their brick-and-mortar stores. With an estimated population of of 4 million, retailers can't afford to pass up the social media space.