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Home » industry research, News, Social Media News

The retail sector’s “Facebook effect”

Submitted by on April 7, 2011 – 9:46 am5 Comments

Last week we noted the “Facebook effect” on digital advertising after it was reported the social network likely contributed £3 out of every £4 spent on social media marketing in the UK last year. Today, we see the “Facebook effect” holds true for retail too.

As the New York Times‘ Miguel Helft reports, online retailers in very different segments such as Ticketmaster and clothing retailer American Eagle are seeing sales spikes whenever customers talk about the purchases they made on Facebook. Makes sense of course for concert and event tickets, as Helft reports:

Facebook said Wednesday that every time a user posted on their news feed that they bought a ticket from TicketMaster, friends spent an additional $5.30 on TicketMaster (presumably for the same event). At Eventbrite, a social site for selling tickets to lesser known events, every link shared on Facebook generated $2.52 in ticket sales, Facebook said.

But what’s even more impressive (or sad, for those of you with unique fashion sensibilities) is the “Facebook effect” for clothing retailer American Eagle. “American Eagle saw users referred by Facebook spend 57 percent more than average on the site, Facebook said,” the Times reports.

The upshot is a positive endorsement (and what’s more positive than saying “I just bought from…”?) from a trusted source or friend can now be quantified on Facebook. We always knew the trusted friend to be the most powerful form of marketing. But 57%!? That figure is unheard of in the world of direct response marketing.

It is individual company assessments like these that start to lend more credence to industry reports that so-called “social commerce” will be a major driver in online commerce. A new report by Booz & Co. calculates reckons the global take from social commerce will grow six-fold to $30 billion by 2015. That’s a lot of concert tickets.

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