In the world of social, all the platforms are looking to one-up each other and show that it’s possible to monetize their service. Lately, that has evolved beyond simple advertising. And it’s apparent what you’re seeing now — earlier this month, it was said that there were signs Twitter would soon unveil its own shopping service, something that had been powered through third-party services previously, like Chirpify and Ribbon. There were more clues to Twitter’s social commerce move when the communication service acquired CardSpring in July. Other social networks are getting into this movement too, including Pinterest, which has become a pretty useful site in the shopping world.
But it’s actually Facebook that has businesses all aflutter. The popular social network is viewed by many companies as the most effective social media commerce channel compared to the likes of YouTube, Pinterest, Twitter, and LinkedIn. According to a study released by G/O Digital, a local, integrated digital marketing solution provider, 62 percent of the 1,000 online and mobile users it surveyed, believe that Facebook holds some sway in influencing customers before they make an in-person visit to a brick and mortar store location. But what is it that makes the social network so damn appealing to small- and medium-sized businesses (SMBs)?
Might be more suited for social commerce, but still missing it
Perhaps the best place to start at is to look at where Facebook is in the social commerce space. TechCrunch’s Josh Constine has a great summary about its activities over the past decade, including with Gifts, which the company announced would be shuttered today. In doing so, Facebook looks to attempt another experiment in order to gain a proper foothold on the social commerce space — this time to “help businesses sell more to Facebook’s users, rather than selling products to them directly.” In other words, the company is going to operate things from the background and give the tools to SMBs to make the sales they need. This would be powered by Facebook’s Buy button, e-commerce payments, new Custom Audiences ads, improved sales measurements, and more.
There are more than 30 million small businesses active on Facebook as of May 2014, an increase of 20 percent from November 2013. Each of these SMBs have probably turned to Facebook as an outlet to better compete against big retailers early on, but now it’s a hub for anyone who wants to do business online. With 1.32 billion users worldwide, there’s no discounting that there’s certainly a sizable audience for merchants to go after.
G/O Digital looked at 1,000 US adults between the age of 18 to 29 to better understand the role Facebook advertising plays in help drive users to make in-store purchases at local SMBs. Advertising is certainly a big revenue generator for Facebook so the fact that users find the social network more effective than other platforms shows that SMBs think works with Facebook.
Among the findings from the study, G/O Digital discovered that 80 percent of those surveyed research products online before they venture out into a store. This shouldn’t be that surprising since it is an efficient use of one’s time — why waste energy, gas, and unnecessary time going into a store when you can browse online to see whether the product you really want is worth it or not. It’s the valuation of the product that is where the study makes its most definitive point: Facebook trumps Twitter and Pinterest thanks to its advertising tools, review system, local relevancy, deals/offers, and more.
- 58 percent of respondents engaged with some form of Facebook advertising at least once a week before entering into a store
- 80 percent say that they’re willing to make a purchase if that SMB has a positive customer review/rating on the company’s website or Facebook page
- 38 percent are influenced by Facebook offers that can also be redeemed in-store
- 84 percent believe that by receiving local deals and offers via Facebook, it will make them more inclined to make a purchase in-store
- 27 percent are willing to give up a bit of their privacy as long as the Facebook ads are relevant to them and their current location
Some of these statistics are probably not that surprising — but what can be inferred from this is that Facebook is a powerful resource to connect the online with the offline and can certainly offer up a unique perspective on a buyer’s behavior both on Facebook and when they come into the store. However, let’s not get too carried away by Facebook advertising and assume that it will lead to a massive drive of consumers to purchase items inside a retail location. Rather, G/O Digital’s study indicates that restaurants and eateries have the highest engagement rate when looking at Facebook ads. with 38 percent. Beauty/spas come in second with 14 percent along with businesses in the education/training space.
Customer recommendations certainly play a big factor in whether someone makes a purchase and it’s apparent in the fact that this item received the highest percentage out of all the questions. That being said, Facebook has an appearance at being an “unbias” medium for companies and customers. Yes, a business can exist on the platform and advertise, but the benefit here is tapping into the social graph of a user. Brands are wise to this and will know that if I see an ad on Facebook for a specific camera sold at an SMB, I’m going to know if any of my friends find it relevant or also like the brand. Facebook is also a better catalog and repository of information compared to Twitter and Pinterest, since it can log all the complaints and compliments around any product.
Long story short, G/O Digital’s report is not necessarily something to be considered groundbreaking, but it does offer a look at Facebook’s potential as a social commerce channel, as well as its holistic view on marrying the online with the offline.
Below is an embedded version of the full report, if you’re curious: