Retailers Push Sales Through Facebook – And Succeed

by Cynthia Wilson | May 12, 2011 3:57 am

Everyday millions of people catch up with a buddy on Facebook, play games or just share something that’s own their minds with the world.  So why not do a little shopping while you’re there?

That’s what GameStop Corp. (NYSE: GME[1]), Express, Inc. (NYSE: EXPR[2]) and J.C. Penney Company, Inc. (NYSE: JCP[3]) are hoping. The video game and apparel retailers are among the latest vendors to join the Facebook family, setting up online storefronts on the world’s most popular social network in hopes of boosting sales.

Express Inc. joined the Facebook family about two weeks ago. GameStop did it last month and J.C. Penney came on board just prior to the Christmas holidays.  All three have made most, if not all, of their inventory available for purchase from their Facebook page and some social media gurus think it’s just a matter of time before traditional retailer websites become obsolete.

“Expecting people to come to your website is expecting them to make an extra effort,” Janet Fouts, a social media coach told USA Today. “They’re already on Facebook.”

Whether or not that happens, retailers can’t deny that they are not likely to ever have as much access to consumers through their websites on a daily basis as they could through Facebook. The social network, which is toying with an IPO, has in the neighborhood of 500 million members, with roughly 250 million of them on the site every day.  Collectively, Facebook visitors spend about 700 billion minutes on the network and the average user has about 130 friends they can share information about retailers’ products with.

Marketed properly, a retailer’s Facebook page could be perfect place to target specific demographics and drum up sales on items before they even reach their warehouse. The page could also be used to unload an overstock of merchandise fairly quickly with the right sales incentive.

Because shoppers who access retailer’s stores through Facebook never have to leave the social network, they could easily get an opinion on an outfit or product from their friends before they buy it.  If they find a good deal, they could easily let their friends know about it.

But dissatisfied customers who have had bad shopping experiences could also share their miserable experiences, opening a retailer up to unprecedented consumer scrutiny and criticism that it may not be able to control or respond to quickly enough before it does serious damage.

Whatever happens, one might say that in the age of the social network and retail sales, it would seem that good customer service is about to take on a whole new meaning.

As of this writing, Cynthia Wilson did not own a position in any of the stocks named here.

Endnotes:
  1. GME: http://studio-5.financialcontent.com/investplace/quote?Symbol=GME
  2. EXPR: http://studio-5.financialcontent.com/investplace/quote?Symbol=EXPR
  3. JCP: http://studio-5.financialcontent.com/investplace/quote?Symbol=JCP

Source URL: http://investorplace.com/2011/05/facebook-retail-sales-retailer-revenue-gme-expr-jcp/
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