Retailers Get Social with Facebook
More retailers have fan pages on it than on other social media sites. — Facebook is the social media site of choice for many US online retailers, judging by an August 2008 study by Internet Retailer and Vovici. — Nearly one-third of responding businesses …
Context & Ripple Effects
By late 2008, Facebook was still primarily a social network, but an August 2008 study by Internet Retailer and Vovici found nearly one-third of surveyed US online retailers had already set up fan pages there — more than on any other social media site. This early retail adoption laid the groundwork for Facebook's later push into commerce, including its big e-commerce drive announced in 2010 and the finding that half of ecommerce site visitors were logged in to Facebook while shopping.
First-order effects
- US online retailers gain a free, direct channel to consumers on Facebook, shifting early social marketing budgets toward fan-page maintenance over other platforms.
- Facebook accumulates a base of commercial brand presences that makes the platform more attractive to shoppers and advertisers alike.
Second-order effects
- Retailer presence gives Facebook the advertiser demand and behavioral data to scale paid ads — a trajectory that led to its $1.86B advertising business muscling in on Google's turf.
- Rival social platforms must court retailers with their own brand pages and commerce tools to avoid ceding the merchant relationship to Facebook.
Third-order effects
- Fan pages evolve from free storefronts into paid targeting products: by 2012 only about 1% of fans engaged with brands organically (per one study), pushing retailers toward paid reach, culminating in Facebook letting advertisers target users based on in-store purchases.
- If the pattern holds, the boundary between social networks and retail channels dissolves, making platforms like Facebook gatekeepers of consumer purchase data and raising longer-term questions about data use and platform dependence for merchants.
The trend: This is an early data point in the decade-long convergence of social media and commerce, in which platforms convert organic brand presence into paid advertising and transaction infrastructure.