The Key to Driving Retail Success in the UK

with Social Media: Focus on Facebook

February 9, 2010

By Kevin Ertell
Vice President of Retail Strategy, ForeSee Results

© 2010 ForeSee Results

The Key to Driving Retail Success in the UK with Social Media: Focus on Facebook

Everyone is talking about the role social media plays for online retailers in the United Kingdom, and
there are lots of opinions about how to do it right. We thought it was important to check in with cus-
tomers to get their thoughts. How do they interact with retailers via social media? How would they
prefer to interact? What value are they seeking from their interactions with retailers via social media?

As part of a fourth-quarter study of over 10,000 visitors to the biggest e-retail websites in the UK,
ForeSee Results wanted to use a methodology to examine these issues that was able to show how dif-
ferent elements of a shopper’s interactions with a company (including on social media) impact their
purchase intent, loyalty, and recommendations.

What we found is validation that social media is a viable marketing strategy when we understand
what our customers want and know which social media platforms they frequent.

Key findings include:

• Thirty-seven percent of shoppers to top UK e-retail websites who interact with social media web-
sites have elected to “friend” or “follow” or “subscribe” to a retailer on a social networking site
like Facebook, Twitter, and YouTube.
• Facebook is, by far, the best place to reach shoppers—both because it’s where they already are,
and it’s where they want to hear from retailers.
• Customers mainly interact with UK retailers on social media sites to learn about products and
promotions—a marketer’s dream come true.

The following report discusses these findings in more detail.

They Like Us! They Really Like Us!

Of the 69% of online shoppers in the UK who say they use social media sites, more than half (37%)
choose to proactively interact with companies on social sites by “friending” or “following” at least one
retailer. This is an amazing testament to customer loyalty and interest in social engagement. UK shop-
pers are actually choosing to engage in relationships with retailers on social sites.

However, almost three-fourths (74%) of online shop-

pers who interact with companies on social media sites If you do use social media sites,
approximately how many retailers or brands
“friend” or “follow” fewer than five companies. Retail- do you interact with (follow / friend / fan of)?
ers, our customers are giving very few of us their ear.
We need to do our part in maintaining these relation-   % of respondents
ships with the kind of content and engagement these
1 to 5 74%
customers want and deserve.
6 to 10 17%
On the other hand, nearly one-tenth of social media us-
ers interact with 11 or more retailers on social sites. 11 to 20 5%
There are shoppers out there with large numbers of More than 20 4%
retail connections.

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The Key to Driving Retail Success in the UK with Social Media: Focus on Facebook

There is a payoff to these relationships. The highest levels of satisfaction with retailers’ own sites
were found among shoppers who interacted on the largest numbers of social media sites. In fact,
site visitors who also interact with a company on a social media site are more satisfied, more com-
mitted to the brand, and more likely to make future purchases from that company. This is a bit of
a chicken-and-egg phenomenon. It is likely that the customers who are more satisfied and loyal to
begin with are the ones who will friend us on Facebook or subscribe to our YouTube channels. How-
ever, research shows that when retailers provide rewarding social media experiences, our customers
become even more satisfied and loyal.

In other words, it’s a cycle. Our most loyal customers are likely to reach out to us on social media, but
it’s how we interact with them once they get there that fosters greater loyalty and the likelihood to
buy from us in the future.

Where It’s At: Facebook

In terms of pure usage, more than half of all online shoppers in the UK frequent Facebook, while
almost one-third of shoppers say they don’t use any social networking sites and over one-quarter.
One-fifth visit YouTube. Facebook’s dominance is even more apparent when we narrow our focus to
shoppers who visit social sites regularly. Among online shoppers who engage in social media, more
than 80% are using Facebook.

All Online Shoppers Shoppers Who Use Social Sites

Which of the following websites do you use regularly? Which of the following websites do you use regularly?
(Please select all that apply.) (Please select all that apply.)
Social Site % Using Each Site Social Site % Using Each Site
Facebook 56% Facebook 81%
I don’t use social sites 31% YouTube 42%
YouTube 29% Twitter 12%
Twitter 8% MySpace 8%
MySpace 6% Flickr 5%
Flickr 3% LinkedIn 5%
Other social
LinkedIn 3% website (please 3%
specify):
Other social website 2% Yelp 0%
Yelp 0%

This information confirms what we already know: Facebook is hugely popular in the UK. In fact, if
Facebook were a country, its “population” would make it the world’s fourth largest. However, an unof-
ficial look at the Facebook pages of the Top 100 online retailers (by sales volume, according to Inter-
net Retailer) reveals that one-quarter do not have any formal Facebook presence and another quarter
have fewer than 10,000 fans. In other words, half of the top online retailers have a minimal to nonex-
istent Facebook presence. And these are the top retailers! Imagine how the rest would fare.

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The Key to Driving Retail Success in the UK with Social Media: Focus on Facebook

Give the People What They Want

Although more and more British companies employ so-
cial media (especially Twitter) as a means of answering What is the main reason you
% of
interact with this company
their customers’ technical questions, our study shows through social media sites?
respondents
that while technical support is one option essential to
the medium, far more people use social networking Learn about products 54%
with retailers to learn about sales and product infor-
mation. Fifty-four percent of respondents who “friend” Learn about sales / special offers 40%
or “follow” companies through social media do so to Get customer support 6%
learn about products. Not far behind, 40% of users
do it to learn about special deals and options. Only six Other reason (please specify): 1%
percent use social media primarily for customer sup-
port. This should be exactly what marketers want to
hear: they want our information, sales, and specials.
We just have to learn how to give it to them effectively.

These findings run somewhat counter to the conventional wisdom that you have to engage users on
social media with snappy content and avoid being too “salesy.” Although snappy content can help to
engage consumers, they follow retailers because of brand, deals, and products, not our witty repar-
tee. If we’re smart about our Facebook content, we won’t turn anybody off.

Conclusion
Get a Facebook page! Make sure you have someone to monitor it and post good, timely information.
Promote it to your most loyal customers through your regular communications venues (emails, ads,
stores, coupons, etc.). Use your Facebook page to post promotions and product information.

I’m making it sound simpler than it really is. There are a lot of ins and outs to social media strategy,
and the right formula will differ for each company. But for those retailers who have a poor to middling
presence on Facebook, it’s a good place to start while you figure out how social media plays into your
global brand strategy.

Here’s a truly revolutionary idea: don’t listen to all of my ideas and opinions about what your cus-
tomers and prospects want based only on this one study of over 10,000 online shoppers of 40 of the
biggest online retailers in the United Kingdom. It’s a good start, but find out from your customers
what they want. Find out what social media sites they frequent. Find out whether they want sales or
coupons or technical support or product information. Find out how satisfied they are with your cur-
rent social media efforts and how likely they are to purchase, return, and recommend your business
as a result of your interactions. There’s a lot about social media and online marketing initiatives that
is really hard to figure out, but asking customers what they want from you is a great way to begin.

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The Key to Driving Retail Success in the UK with Social Media: Focus on Facebook

About the Author

As a recognized expert in e-commerce with more than 10 years of executive-level experience at Bor-
ders and Tower Records, Kevin leads ForeSee Results’ growth in the retail industry as Vice President
of Retail Strategy. Kevin has been a featured speaker at numerous e-retail conferences such as Shop.
org, eTail, and Internet Retailer, in addition to being featured and quoted in the Wall Street Journal,
the New York Times, USA Today, Publishers Weekly, and more.

Measurement Methodology
The ForeSee Results E-Retail Satisfaction Index (UK) is based upon a customer satisfaction methodol-
ogy developed at the University of Michigan that is the only cross-industry methodology proving that
organisations that more effectively satisfy customers realise higher financial returns. With origins
in Sweden where it was originally developed as the Swedish Barometer, this methodology has been
adopted as a national measure of customer satisfaction by the United States (American Customer Sat-
isfaction Index), the United Kingdom (National Customer Satisfaction Index UK) as well as by govern-
ments in Colombia, Korea, Mexico, Sweden, Turkey and elsewhere. For the past eight years, ForeSee
Results has been measuring online customer satisfaction, and measures leading retail sites including
Best Buy, Sears and Target using this scientific approach. Additionally, the firm produces the annual
US-based Top 40 Online Retail Satisfaction Index, which provides an interesting point of comparison
to customer satisfaction with UK online retail.

The list of retailers was based on site traffic volume data from IMRG sources. Travel websites are not
included. This study represents more than 10,000 shoppers’ survey responses.

Survey responses were collected from 24 November through 15 December from shoppers who had
visited the Top 40 retail websites within the previous two weeks. The Top 40 was determined based
on site traffic volume from IMRG and Hitwise.

Survey responses for this study were collected via an online panel provided by Research Now, a lead-
ing international online panel and fieldwork organisation. Research Now owns the largest online
panel in the UK, comprising of 400,000 consumers, spanning England, Scotland, Wales and Ireland.

Some respondents went on to complete an online purchase; others didn’t, meaning the respondent
group is defined as “browsers”. Browsers include existing customers, first-time visitors and infrequent
visitors, competitors’ customers who may be cross-shopping and others who may be spending time re-
searching purchases on a retail website, perhaps with the intent to purchase through offline channels.
Browsers often shop on a variety of websites and other channels before making a purchase. Browsers
are a particularly interesting group to measure because they typically have a lower degree of customer
satisfaction with the website experience than buyers for a variety of reasons: some are less familiar
with the website, others may prefer to purchase from competitors or offline channels, and still others
may have been too disappointed with the site or available merchandise to make a purchase.

Browsers have the greatest potential to influence purchase and increase revenues, making them a
vitally important audience. Only 2-5% of online shoppers purchase online in a given session, which
leaves more than 95-98% who didn’t buy or who will go on to buy another day, possibly from a com-

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The Key to Driving Retail Success in the UK with Social Media: Focus on Facebook

petitor or another channel. Measuring customer satisfaction among browsers provides new insights
into how to influence the purchase decisions for the majority of retail website traffic. By determining
what drives browser satisfaction and likelihood to complete a purchase (regardless of which channel
is used or when the purchase is made), retailers can find the key to significant financial gains.

About ForeSee Results

As the leader in online customer satisfaction measurement, ForeSee Results captures and analyses
online voice of customer data to help organisations increase sales, loyalty, recommendations and
website value. Using the methodology of the American Customer Satisfaction Index (ACSI), ForeSee
Results identifies the improvements to websites and other online initiatives with the greatest ROI.
With more than 43 million survey responses collected to date and benchmarks across dozens of in-
dustries, ForeSee Results offers unparalleled expertise in customer satisfaction measurement and
management. ForeSee Results works with more than 110 retail websites. ForeSee Results (www.
ForeSeeResults.com), a privately held company, is headquartered in Ann Arbor, Michigan and has of-
fices in London, England and Vancouver, Canada.

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