“Like” It Or Not Facebook Factors Into Retail Sales
The recent brouhaha surrounding even more changes to the Facebook home page proves just how much the social network site is embedded in consumers’ lives.
Facebook fans complained vehemently about the constant changes — some threatened migration to Google Plus and Twitter. However, it is unlikely Americans will give up on Facebook and it is the link the site has to Americans that makes it critical to retailers.
The Find, a mobile search engine and social commerce firm, found that there is a correlation between Facebook Likes and the number of shoppers visiting specific e-commerce sites. The Find, which hosts tens of millions of online shopping searches every month, displays product search results alongside the number of Facebook Likes accumulated by individual stores offering those products.
“In the context of shopping, Facebook Likes are widely distributed personal endorsements — quite often from people you know — of the brands, stores and products you are thinking about now,” said Siva Kumar, CEO of The Find. Facebook Likes have already become as important to retailers as having specific trust seals on their e-commerce sites. For instance, last year VeriSign reported that display of its seal next to certified stores drove similarly elevated click-throughs for retailers on The Find. The Find reports that display of Facebook Likes has a positive impact for retailers, regardless of their size. The Find categorized the stores by overall traffic into 10 separate tiers in order to compare traffic patterns across similarly sized stores. The final analysis clearly demonstrates that among the 10,000 stores studied those with at least 100 Facebook Likes had a higher average click through rate than a similarly sized store that did not have a Facebook fan page. The research suggests retailers should increase their presence on Facebook. Already, Walgreens has been noted as being aggressive with updates and offers.
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The impact the Internet continues to have on retailing was further noted in a new Kline & Co. report that showed sales of cosmetics and toiletries through alternate channels have exploded, growing by nearly $1 billion since 2005. More double-digit growth is expected as consumers are increasingly drawn to the convenience of at-home shopping to meet their beauty needs.
“Consumers are spending more time at home, either by virtue of unemployment, telecommuting, or merely a desire to save money by not going out so much,” observed Karen Doskow, Consumer Products Industry Manager at Kline. “Instead of running out to the store to buy their beauty products, they’re watching home shopping channels and infomercials to get the latest on new products.” They’re scouring through Web sites like dermstore.com to get information on high-end facial treatment products with unique benefits.
Consequently, brand marketers are exploring new tactics to build online buzz. Daily deal sites, such as Groupon, LivingSocial, and so-called “flash sale” sites such as HauteLook, Rue La La and Gilt Group, are fueling e-commerce sales by creating awareness and enticing interest about new products or services by offering one-time discounts of their beauty merchandise in order to create trial opportunities.
Kline’s study reveals that as brands increasingly look to leverage mobile and e-commerce to create seamless purchase options for their customers, single-channel marketing is being rendered less and less viable. “We expect a great deal of cross-channel promotion that will drive solid growth over the next five years,” predicts Doskow. “The Internet and mobile technologies are empowering consumers to be even more aggressive in their product and price comparisons and driving marketers to deliver value-based products to meet these demands.”
People, Places and Things
A few words with Pam Busiek, president and chief executive officer for the Independent Cosmetic Manufacturers and Distributors speaking about a new initiative for U.S. Product Safety Laws. This coalition represents the entire spectrum of the nation’s cosmetics and personal care industry and wants to champion new laws.
Pam Busiek: Those of us in the personal care products and beauty services industry have an impeccable safety record. Given all the advances in science and technology, it is essential that our laws keep pace. We want to ensure that we sustain our positive safety record as well as the confidence of our consumers for years to come. The Alliance, which unveiled as a Web site, includes the Professional Beauty Association, Direct Selling Association, and the Personal Care Products Council. We need to modernize our laws precisely because the beauty and personal care industry is one of the most important sectors of the economy.
What’s In Store
London Calling: Coty’s Rimmel London brand is gearing up for spring and enjoying a bounce from spokeswoman Zooey Deschanel’s new TV show. Among the new items are ScandalEyes mascara and Glam’Eyes HB eye shadows.
Target Touts Award Winners: The latest Target circular promotes products sold in its stores that have won awards such as Allure’s Best of the Decade Most Awarded Shampoo and Conditioner, which was awarded to Pantene. Also, Good Housekeeping’s L’Oréal Excellence Crème hair color is promoted for its Good Housekeeping Seal. Target’s own Sonia Kashuk is advertised for its honors for People en Espanol Belleza Al Dia Award.