Is Facebook A Waste Of Retail Marketing Dollars?

Another day, another study claiming that social shopping is either the greatest thing since sliced bread, or that it matters not. Take your pick. There’s a study to back up each point of view.

Take this new piece of research that says social media’s influence is on the decline and suggests investment is misplaced and might be better allocated to new in-store and mobile technology. But is Facebook a waste of retailmarketing dollars?

Studies in general are both rubbish and incredibly useful. Retailers are hungry for research on how social media impacts consumer behavior. Facebook might be 10 years old, but its impact on modern retail is still a work in progress. Factor in newer social platforms such as Twitter TWTR +0.86%, Instagram and Pinterest, and the landscape becomes even more cluttered.

Retailers are spending a good deal of time developing and deploying social media plans, but is it worth it?

Not according to the new study from Capgemini , whoseDigital Shopper Relevancy Report queried more than 18,000 digital shoppers and discovered that consumers are placing less importance on following retailers and finding out about new products on social media.

In a mature market such as the United States, social media is becoming less important compared with in-store, online, smartphone or email interactions.

But is social media really a bust when it comes to shopping?

Not according to another study, this one from Collective Bias , that found Facebook fans of retailers spend 50 percent more than non-Facebook fans over time. Fans that posted 10 or more times on a grocer’s Facebook page spend more than $1,000 annually than other shoppers and visited 2.5 times more in a year.

So which is it? Does following a retailer on social media matter, or doesn’t it?

Both, according to these studies, and here’s why.

The Collective Bias study examined the behavior of 600,000 loyalty card members of a specific grocery chain before and after they became Facebook fans of the retailer. Already, this group is biased toward a particular chain and invested in shopping there. Those who were active in Facebook community visited the page more frequently, were more informed about deals and the retailer reaped the benefits of this top of mind awareness.

But among a wider swath of shoppers, social media sites including Facebook, are influencing online purchases less and in-store still reigns in most product categories, according to Capgemini.

This is where it gets more difficult to gauge how social media can influence purchasing, intent to buy is very different than actual behavior. Unless a retailer can track social media activity through to a purchase, as Collective Bias did, it’s just guesswork. Until the next study comes along.