The Key to Driving Retail Success with

Social Media: Focus on Facebook

February 9, 2010

By Kevin Ertell
Vice President of Retail Strategy, ForeSee Results

© 2010 ForeSee Results

The Key to Driving Retail Success with Social Media: Focus on Facebook

Everyone is talking about social media, and there are lots of opinions about how to do it right. We
thought it was important to check in with customers to get their thoughts. How do they interact with
retailers via social media? How would they prefer to interact? What value are they seeking from their
interactions with retailers via social media?

As part of a study of nearly 10,000 visitors to the biggest e-retail websites in the United States, Fore-
See Results wanted to use the methodology of the American Customer Satisfaction Index (ACSI) to
examine these issues, because the ACSI is able to show how different elements of a shopper’s interac-
tions with a company (including on social media) impact their purchase intent, loyalty, and recom-
mendations.

What we found is validation that social media is a viable marketing strategy when we understand
what our customers want and know which social media platforms they frequent.

Key findings include:

• 56% of shoppers to top e-retail websites who interact with social media websites have elected to
“friend” or “follow” or “subscribe” to a retailer on a social networking site like Facebook, Twitter,
and YouTube.
• Facebook is, by far, the best place to reach shoppers—both because it’s where they already are,
and it’s where they want to hear from retailers.
• Customers mainly interact with retailers on social media sites to learn about products and pro-
motions—a marketer’s dream come true.

The following report discusses these findings in more detail.

They Like Us! They Really Like Us!

Of the 69% of online shoppers who say they use social media sites, more than half (56%) choose to
proactively interact with companies on social sites by “friending” or “following” at least one retailer.
This is an amazing testament to customer loyalty and interest in social engagement. Shoppers are
actually choosing to engage in relationships with retailers on social sites.

However, two-thirds (61%) of online shoppers

who interact with companies on social media If you do use social media sites,
sites “friend” or “follow” fewer than five com- approximately how many retailers or brands
do you interact with (follow / friend / fan of)?
panies. Retailers, our customers are giving very
few of us their ear. We need to do our part in
maintaining these relationships with the kind   % of respondents
of content and engagement these customers
1 to 5 61%
want and deserve.
6 to 10 21%
On the other hand, nearly one-fifth of social me-
dia users interact with 11 or more retailers on 11 to 20 10%
social sites. There are shoppers out there with More than 20 8%
large numbers of retail connections.

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The Key to Driving Retail Success with Social Media: Focus on Facebook

There is a payoff to these relationships. The highest levels of satisfaction with retailers’ own sites
were found among shoppers who interacted on the largest numbers of social media sites. In fact,
site visitors who also interact with a company on a social media site are more satisfied, more com-
mitted to the brand, and more likely to make future purchases from that company. This is a bit of
a chicken-and-egg phenomenon. It is likely that the customers who are more satisfied and loyal to
begin with are the ones who will friend us on Facebook or subscribe to our YouTube channels. How-
ever, research shows that when retailers provide rewarding social media experiences, our customers
become even more satisfied and loyal.

In other words, it’s a cycle. Our most loyal customers are likely to reach out to us on social media, but
it’s how we interact with them once they get there that fosters greater loyalty and the likelihood to
buy from us in the future.

Where It’s At: Facebook

In terms of pure usage, more than half of all online shoppers frequent Facebook, while one-third of
shoppers say they don’t use any social networking sites. One-fifth visit YouTube. Facebook’s domi-
nance is even more apparent when we narrow our focus to shoppers who visit social sites regularly.
Among online shoppers who engage in social media, more than 80% are using Facebook.

All Online Shoppers Shoppers Who Use Social Sites

Which of the following websites do you use regularly? Which of the following websites do you use regularly?
(Please select all that apply.) (Please select all that apply.)

Social Site % Using Each Site Social Site % Using Each Site
Facebook 56% Facebook 81%
I don’t use social sites 31% YouTube 31%
YouTube 22% MySpace 22%
MySpace 15% Twitter 16%
Twitter 11% LinkedIn 12%
LinkedIn 8% Flickr 7%
Other social
Flickr 5% website (please 3%
specify):
Other social website 2% Yelp 2%
Yelp 2%

This information confirms what we already know: Facebook is hugely popular. In fact, if Facebook
were a country, its “population” would make it the world’s fourth largest. However, an unofficial look
at the Facebook pages of the Top 100 online retailers (by sales volume, according to Internet Retailer)
reveals that one-quarter do not have any formal Facebook presence and another quarter have fewer
than 10,000 fans. In other words, half of the top online retailers have a minimal to nonexistent Face-
book presence. And these are the top retailers! Imagine how the Top 500, Top 1000 or Top 5000 fare.

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The Key to Driving Retail Success with Social Media: Focus on Facebook

Give the People What They Want

Although more and more companies employ social
media (especially Twitter) as a means of answering What is the main reason you
% of
interact with this company
their customers’ technical questions, our study shows through social media sites?
respondents
that while technical support is one option essential to
the medium, far more people use social networking Learn about sales / special offers 49%
with retailers to learn about sales and product infor-
mation. 49% of respondents who “friend” or “follow” Learn about products 45%
companies through social media do so to learn about Get customer support 5%
special deals and options. Close behind, 45% of us-
ers do it to learn about products. Only 5% use social Other reason (please specify): 1%
media primarily for customer support. This should be
exactly what marketers want to hear: they want our
information, sales, and specials. We just have to learn
how to give it to them effectively.

These findings run somewhat counter to the conventional wisdom that you have to engage users on
social media with snappy content and avoid being too “salesy.” Although snappy content can help to
engage consumers, they follow retailers because of brand, deals, and products, not our witty repar-
tee. If we’re smart about our Facebook content, we won’t turn anybody off.

Conclusion
Get a Facebook page! Make sure you have someone to monitor it and post good, timely information.
Promote it to your most loyal customers through your regular communications venues (emails, ads,
stores, coupons, etc.). Use your Facebook page to post promotions and product information.

I’m making it sound simpler than it really is. There are a lot of ins and outs to social media strategy,
and the right formula will differ for each company. But for those retailers who have a poor to middling
presence on Facebook, it’s a good place to start while you figure out how social media plays into your
global brand strategy.

Here’s a truly revolutionary idea: don’t listen to all of my ideas and opinions about what your custom-
ers and prospects want based only on this one study. It’s a good start, but find out from your custom-
ers what they want. Find out what social media sites they frequent. Find out whether they want sales
or coupons or technical support or product information. Find out how satisfied they are with your
current social media efforts and how likely they are to purchase, return, and recommend your busi-
ness as a result of your interactions. There’s a lot about social media and online marketing initiatives
that is really hard to figure out, but asking customers what they want from you is a great way to begin.

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The Key to Driving Retail Success with Social Media: Focus on Facebook

About the Author

As a recognized expert in e-commerce with more than 10 years of executive-level experience at Bor-
ders and Tower Records, Kevin leads ForeSee Results’ growth in the retail industry as Vice President
of Retail Strategy. Kevin has been a featured speaker at numerous e-retail conferences such as Shop.
org, eTail, and Internet Retailer, in addition to being featured and quoted in the Wall Street Journal,
the New York Times, USA Today, Publishers Weekly, the Detroit Free Press, and more.

About the Research Methodology

The social media findings reported in this paper are based on a survey of almost 10,000 visitors
to the top 40 e-retail websites (determined according to sales revenue as reported by Internet Re-
tailer’s 2009 Top 500 Guide). Survey responses were collected by FGI Research’s Smart Panel. The
study measured satisfaction among shoppers who visited the site, regardless of whether or not they
ultimately executed a purchase online, providing insight into the performance of retail websites as
research and purchase channels. ForeSee Results used the methodology of the American Customer
Satisfaction Index (ACSI), developed at the University of Michigan, to determine the scores. The ACSI
is the national standard for customer satisfaction and has been proven to have a direct link with stock
prices and other measures of financial performance.

About ForeSee Results

As the leader in online customer satisfaction measurement, ForeSee Results captures and analyz-
es online voice of customer data to help organizations increase sales, loyalty, recommendations and
website value. Using the methodology of the American Customer Satisfaction Index (ACSI), ForeSee
Results identifies the improvements to websites and other online initiatives with the greatest ROI.
With more than 43 million survey responses collected to date and benchmarks across dozens of in-
dustries, ForeSee Results offers unparalleled expertise in customer satisfaction measurement and
management. ForeSee Results works with more than 110 retail websites in the United States alone.
ForeSee Results (www.ForeSeeResults.com), a privately held company, is headquartered in Ann Ar-
bor, Michigan and has offices in London, England and Vancouver, Canada.

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