NEW YORK (MainStreet) — Retailers rely on social media to connect with customers, but a new survey sheds light on how digital interactions could impact consumer spending.
According to Collective Bias, a retailer’s fan on Facebook spent about 50% more than those who weren’t connected to the store on the social media site.
The report analyzed a regional grocery store chain’s 600,000 loyalty members both before and after the user “liked” the retailer on Facebook.
It found those who posted on the store’s Facebook page at least ten times spent $1,000 more each year and purchased 35% more items.
“This study was conducted to help marketers solve measurability challenges when it comes to social's role in driving sales," said Bill Sussman, CEO of Collective Bias.
The major question for retailers is whether or not “likes” translate into incremental sales.
“Incremental is the key word,” Columbia Business School professor Kinshuk Jerath told MainStreet. “Likes are good for brand communication, but shares are useful, since you’re likely sending it to people who do not know the retailer or are unaware of a particular promotion, which helps to reach new people in a word of mouth type of way.”
Followers of a retailer on social media already have a favorable opinion of the brand and are likely shop at the store regardless of how much they post on its Facebook or Twitter page.
Simply regurgitating info about the brand to an audience that’s already fond of the retailer isn’t opening up the floodgates for attracting new customers.
“People who post on the retailer’s social media page are already engaged,” Jerath added.
It’s not surprising for customers who take the time to “like” and comment on the retailer’s Facebook statuses to shell out more money at the store or to consider that retailer as their go-to grocery store.
Retailers tend to invest heavily in social media presence, often trying to capitalize on events in an effort to drive sales.
During the 2013 Super Bowl, a power outage interrupted the game, prompting Oreo to post a clever and pertinent status about its brand and the blackout, adding levity to the situation and catching one-third of the country by surprise. With no content on television during the blackout, people turned to social media, and Oreo seized an opportunity to reach people. Whether or not the company sold more cookies because of the post is more difficult to quantify.
Still, another downside for retailers surrounds the Facebook news feed infrastructure. “Facebook can’t put every post in your feed, so there is a pretty good chance that some of these updates are missed,” Jerath said.
- Written by Scott Gamm for MainStreet. Gamm is author of MORE MONEY, PLEASE.