With more than 500 million people around the globe spending 700 billion minutes per month on Facebook, there is no question that it is the most important and pervasive social ecosystem in the world. It’s no wonder that brands of all shapes, sizes and offerings are leveraging the user base to connect with customers and prospects alike.
However, while the mission once was purely about community building, it is now also about leveraging the social network’s immense power to influence purchasing decisions.
Half a Billion Reviewers… and Counting
The Open Graph (“the global mapping of everybody and how they’re related”) and the “like” button have combined to create a social commerce force off the Facebook site and in the broader Web. By enabling retailers to help shoppers discover products and services of interest — all while enabling them to share their likes, interactions and commentaries — Facebook has become the epicenter of consumer tastes and preferences.
These social exchanges are delivering benefits for both sides. Think of it this way: With the “like” button, Facebook’s half a billion users have instantly become authoritative reviewers with the ability to continually recommend content, products and services within their respective communities of friends, as well as across the Web.
This signals a game-changing force in online shopping by helping shoppers more easily reach a purchase decision validated by people who share the same lifestyles, interests and needs.
The Power of the ‘Micro Review’
Simply put, adding the “like” button has given brands and retailers the opportunity to earn the endorsement of a social consumer with the click of a mouse.
Don’t misunderstand. Brands clearly still have to earn these “micro review” endorsements with great products and effective marketing. But once they do, “likes” become a form of social currency that contributes not only to the overall social capital earned by a brand within Facebook, but also to the overall branding process.
The power of the “like” is amplified when you fully understand the impact of reviews on today’s social consumer. Eighty-three percent of all holiday shoppers said they were influenced by customer reviews in an August 2010 survey by ChannelAdvisor.
What’s more, a highly rated product increased the likelihood of purchasing for 55 percent of consumers who participated in a July 2010 eConsultancy study.
Additionally, in a study conducted in 2009 by the E-tailing Group, more than half of online shoppers indicated they were more likely to return to a retail site with a social community, and shoppers also said recommendations from friends were twice as valuable as recommendations from retailers.
That report also noted that 83 percent of consumers who frequently shopped on the Web were interested in sharing information about purchases in online social communities, and 67 percent said they spent more online after getting recommendations from their online community friends.
By enabling people to share experiences, impressions and perceptions in the retail environment, the “like” button is helping brands and retailers make the leap from social media (branding) to social commerce (sales).
From a consumer perspective, the convenience and depth of the online shopping experience — combined with the powerful relevance of social networks — results in more educated, trusting shoppers, while influencing the behavior and opinions of likeminded shoppers. Twenty-seven percent of holiday shoppers last year used social networks to help determine which gifts friends and family might like, according to eMarketer.
From a brand perspective, the socialization of commerce begins by acknowledging the social consumers and working to understand what inspires them. Facebook is facilitating this shift by helping brands and retailers make it easy for a consumer to tap into their social network outside of the Facebook platform.
Savvy retailers will take steps to make an extremely personalized online shopping experience a reality by incorporating Facebook elements across their websites. Integrating social data — including a shopper’s location, profile data and friend-endorsed products — creates a more meaningful experience that ultimately gives consumers the confidence to purchase. Leading retailers such as Amazon, Diapers.com, Callaway, and Abe’s of Maine are already utilizing the Open Graph to integrate Facebook elements on-site and enhance the commerce experience with social content.
As brands and consumers continue to explore and experiment with the intersection of Facebook and commerce, with “likes” and all things Open Graph, we’re entering a very exciting time for online commerce, when the possibilities are endless.
‘Like’ and Beyond
With the holiday shopping season in full-swing, retailers need to build social shopping opportunities into their websites.
- Last year, 27 percent of holiday shoppers used social networks to help determine which gifts friends and family might like, according to eMarketer. The ability to create, share, collaborate on, and “like” holiday wish lists is a huge opportunity that should be available both on Facebook and on-site (built on the open graph).
- Rely on traditional holiday merchandising tactics like “Customer Favorite” lists and “Top 10 Gift Ideas,” but incorporate Facebook data to add an element of social relevance. Make it easy for shoppers to “like”/recommend lists to their friends and see people within their network who’ve endorsed the lists.
- Twenty-seven percent of U.S. smartphone owners expected to use their mobile device to research or purchase gifts this holiday season, the National Retail Federation found in a recent survey. To capitalize on this growing segment of shoppers, offer a mobile-optimized version of your online store.
- 61.7 percent of holiday shoppers said the economy would impact their spending plans this year in an NRF survey. Integrate ratings and reviews across marketing efforts. As consumers remain budget conscious, reviews will play a vital role in helping them make their purchase decisions.
Pehr Luedtke is CEO of PowerReviews.