The real relationship between social media and shopping

There is conflicting evidence about the effect of social media use on online shopping activity.

Online retailers have recognised the importance of social media for many years, but they haven't really understood the relationship between social media and online shopping behaviour. Does social media increase exposure to products and therefore encourage shopping? Or does it act as a stand-in for shopping activity? 

Previous research is contradictory: research by IBM in 2012 and 2013, for example, suggests that social media has little impact on online shopping, with only 0.34% of sales referred by social media sites. This makes sense. When individuals only have so many hours in the day, any time spent on social media will detract from time spent on online shopping activity.

However, social media is often used for 'consumption-related' activity, such as sharing recent purchases or advertising products for sale. When individuals interact with their social networks, they are exposed to consumption-related information. Such exposure not only increases the number of products the individual is exposed to, but also decreases the ‘online research’ time they might need to make a purchase.

Andrew Stephen and his co-authors decided to address this question once and for all. Taking a unique data set – 1,000 participants using social media over the course of one year – they traced the relationship between social media use and online shopping. The results of their analysis suggest that both scenarios are true; social media has both negative and positive relationships with online shopping. Online shopping activity clearly decreased immediately after social media use: higher immediate social media use was associated with making fewer purchases and from fewer websites.

But interestingly, the more an individual used social media over time (‘cumulative use’), the more they shopped, therefore social media and consumption are clearly positively related. Higher cumulative use of social media was related to an increased likelihood of buying products online. The more an individual used social media, the more purchases they made online and the higher the number of different retailers they bought items from. Added to which, patterns of online shopping were different for those who spent more time on social media. The longer the participants spent on social media, the greater the variety and volume of products they bought, and the more likely these products were 'impulse buy' items.

What does this mean for marketing professionals? Andrew and his co-authors suggest two important lessons. Firstly, initially weak sales in response to social network campaigns should not be off-putting. Online marketers should expect to be in it for the long game, and metrics of marketing success should expand to support this. Clickthrough rates, for example, although useful, will not give a complete picture. Secondly, marketers should consider who they target and with what products. The authors put forward a formula that marketers can use to determine which members of their audience to target – namely, those who spend most time on social networks.

Online Shopping and Social Media: Friends or Foes? is co-authored by Yuchi Zhang, Michael Trusov, Andrew T. Stephen and Zainab Jamal, and is published in the Journal of Marketing.