Facebook and customer reviews key to online engagement strategies

Study shows customer reviews are key element of social commerce strategy and points to evolving importance of Facebook in online shopping

The e-tailing group and PowerReviews has released the 2010 Social Shopping Study’s final wave of findings. The study asked more than 1,000 consumers who shop at least four times per year and spend $250 or more annually online how social media impacts their buying decisions. The data clearly points to three key social shopping trends that will shape the future of Ecommerce.

Trend 1: Consumers trust the basic social media tools -When asked which community and social media tools have the greatest impact on buying behavior, 71 percent of respondents rated user-generated customer reviews as having the highest “good to significant impact” on buying behavior, followed closely by Q&A (57 percent) and community forums (47 percent). In addition, compared to 2007, shoppers are reading more customer reviews to be confident judging a product, with consumers reading 8 or more up 77 percent over 2007 and 16 or more up 140 percent.

Trend2: Consumers seek a variety of voices - Further authenticating the growing importance of social media in the online shopping process, the study reveals that “friends” and like-minded consumers are more influential than experts. When asked which online voices have the greatest influence on purchase decisions, 55 percent cited Facebook “friends,” while another 55 percent noted “people like you” (55 percent) as having the greatest impact. Experts (51 percent); brands (38 percent), retailers (35 percent) and influential bloggers (26 percent) followed.

Trend 3: Facebook is the social platform with the greatest potential - While the role of social media sites in the online shopping decision-making process is still in its infancy, the study points to the growing importance of Facebook. After basic social shopping tools – including reviews, Q&A and forums – Facebook features show the most potential to impact buying behavior. 31 percent cite the Facebook wall (friends talking about products) as having significant influence over buying decisions, while another 25 percent note Facebook fan pages as most powerful. What’s more, the viral force of Facebook is considerable, as nearly half of respondents reported having upwards of 100 “friends,” while 42 percent of respondents frequently read and/or update their Facebook pages.

“Consumers are clearly in control of their shopping experiences and these findings provide valuable and practical lessons for retailers and brands to engage and benefit from the social conversation,” said Pehr Luedtke, CEO of PowerReviews. “Retailers and brands need to build the foundation for trust through the most important social tools: reviews, Q&A, and forums. They need to provide a collective voice by integrating a variety of perspectives, including Facebook friends and ‘people like you.’ And, as consumers’ expectations continue to rise, retailers and brands need to present the content in an easy-to-find and easy-to-consume way.”

Last month PowerReviews and the e-tailing group revealed research around how consumers are using social media to shop and interact with brands and retailers online. The study found that people strongly prefer to do their own research online versus speaking to a knowledgeable sales associate in-store. According to respondents, online research is preferred for three reasons: its ability to save time (79 percent report saving somewhat to much more time doing their own online research), increase confidence (83 percent are somewhat to much more confident about making a purchase decision when doing their own research) and provide credible information (82 percent are somewhat or very satisfied with product information available online).

“The findings of our social shopping study not only prove that people prefer to do their researching online vs. in-store. The supporting data also shows us that the retail industry and consumer expectations are at a fundamental and exciting crossroads,” said Lauren Freedman, president of the e-tailing group. “The ever-evolving importance of social is certain to grow exponentially from a shopping perspective given that it’s still so early in the game.”