Recently we’ve heard news that Facebook has introduced a new feature that will let users buy products directly from its website. This is a major change for the social network, which will enable shoppers to click a ‘buy’ button to purchase items in adverts or other posts without leaving Facebook itself. Essentially it will mean that Facebook becomes an online store itself and it will be its first foray into the ecommerce sector.
So will it be a positive move for retailers?
The answer to this is not entirely simple. This could be a positive move if the ‘buy’ button is linked to a friend’s recommendation. There is no doubt that friends and family on Facebook recommending what to buy has a huge influence on all of us. A recent poll found that 78 per cent of us are influenced by a friend’s recommendation. This would indicate that to have a big impact on retail sales, the ‘buy’ button would need to be present due to a recommendation from a friend or family member. That way, consumers may be more inclined to buy a product based on the endorsement they’ve been provided with from their own social circle. As such, the collective influence of our social circles is a powerful driving factor in our decision-making process, and retailers should not underestimate the importance of securing buy in and turning customers into brand advocates.
Despite this, a huge part of successful selling online is being able to convert new customers into returning visitors. If a customer is buying a product directly from Facebook they are not experiencing your brand or the shopping journey you have created. If a customer does not connect with your brand you could be missing out not only on upselling opportunities during the customer journey, but also on repeat purchasers. Retailers therefore will need to work much harder at securing a ‘long term’ returning customer, as so much of the customer experience that affect their loyalty is tied into the shopping journey itself.
With this in mind, how scalable is influencer marketing on Facebook?
We know that for potential customers, getting social proof will help convert sales. If our friends and family believe in it, then by default, we will too.
But how scalable is influencer marketing when it’s restricted to just friends and family? On average an adult Facebook user will have around 200 friends, (or 200 potential influencers). If we think about how many of these potential influencers are likely to recommend your product to the right friend, the chance of a conversion is high but the scalability per customer (or per 200 friends) is very restrictive.
Tools like customer review systems give retailers the social proof they need, but also offer the scalability, as it’s not just restricted to friends and family. We found after looking at 2.4 million reviews collected over a 12 month period that 93 per cent of them were positive. The collective weight behind positive consumer reviews will give retailers the social proof they need to influence a conversion at the checkout. If so many people see the value of a certain product, then consumers can be confident of their purchase and element of doubt will be dramatically reduced.
So, with these factors in mind, should retailers be throwing their money into Facebook? Naturally, the buy button is going to cost as it will be implemented through Facebook advertising campaigns but it will be important for retailers to consider the ‘buy’ button as one part of the marketing strategy.
Retailers need to treat this exactly the same as they would with any other paid advertising campaign, and use it as part of the marketing mix (ie PPC, Facebook, email, customer reviews etc…)
In summary, the Facebook ‘buy’ button will not be a silver bullet to turn retail sales around overnight. It does, however, have potential. First things first, retailers should test with a small budget then scale it up if they see that this is bearing some fruit.
What’s most important, first and foremost is that retailers which choose to use this new ecommerce tool ensure they can deliver a great customer service. Otherwise a bad customer experience can be shared amongst friends just as easily as a good one!
Phillip Smith is UK country manager at Trusted Shops