What Keeps Retailers from Facing Facebook?

With 49 million North American users and a $240 million investment from Microsoft, Facebook is the hot social medium. But interactive agency Rosetta found in May that only 30 percent of their top 100 online retailers had launched a free Facebook fan page, and even fewer had established a larger presence there, says the National Retail Federation’s STORES magazine.

“If you accept the premise that retailing is a social business, then it would follow that Facebook should be a slam-dunk application for retail companies,” writes executive editor Susan Reda. Many retailers have made the leap to social networking. But others hesitate. Why?

• Retailers think of social networking as a transient fad. “Let’s just say it took some persuasive arm-twisting to get me to set up a Facebook profile,” says Paula Rosenblum of RSR Research. “I thought it was a kids’ thing.”
• Businesses don’t know how to handle feedback. Adam Cohen, a partner at Rosetta, urges caution. “Your brand is being talked about so it makes sense to monitor the conversation and to engage in it when it’s appropriate. But this is about social networking, not shopping, and retailers need to respect that.”
• The marketing value for retailers isn’t clear. “If they’re looking for a direct money maker, the answer is ‘No.’ If they’re looking to do some brand-building, then it’s ‘Yes,’” Rosenblum says. “And if they want to do a sniff test to find out their customers’ preferences, they should absolutely be on Facebook.”

Adventurous retailers have taken advantage of Facebook’s application platform to connect with customers in sticky ways; Nordstrom, for example, offers the “Nordstrom Fashion Status Widget,” which allows users to “broadcast their current mood and outfit” to their friends. Cohen calls Facebook “a gold mine for marketers: the platform has an average of 200 data points on each user.” While users over 25 are the fastest-growing demographic on Facebook, Reda notes, young users are just approaching their prime spending years.