But losses mount for the home furnishings e-retailer that went public in October.
Members of social networking sites increasingly are turning away from traditional media and looking to peers for product information and recommendations, according to research firm Compete.
Members of social networking sites such as MySpace and Facebook increasingly are turning away from traditional media and instead looking to peers for product information and recommendations, according to new research from Compete Inc., a market research firm that specializes in how consumers interact with brands online.
This change provides marketers with a new opportunity to reach consumers by launching initiatives that interweave e-commerce and social networks, the research firm says.
Growth in the use of online social networking has been considerable. As social network members spend more time on these sites, they become impervious to traditional media; over one-third of social networkers spend less time watching television and reading newspapers or magazines as a result of increased usage of social networks, Compete reports. The firm goes on to say that peers and colleagues of network members hold more influence over the members’ purchases than any other source of information.
Other research findings include:
- People join a social networking site to receive four benefits: meet other people (78%), find entertainment (47%), learn something new (38%) and influence others (23%).
- Social network members have different spending profiles from other consumers. Annual discretionary income for network members is nearly $8,000, 20% higher than consumers who have not used a social networking site. Further, they spend nearly 25% of their disposable income on online purchases, vs. 17% for individuals who do not use social networking sites.
- Consumer brand manufacturers are using one of six strategies to integrate consumers into their sales and marketing efforts: branded microsites, customer reviews and ratings, online customer forums, peer-to-peer transactions, product-focused blogs, and community-created products.
“By understanding why people seek out social sites and the factors that shape their participation, marketers can explore and create new ways for their brands to thrive within the social web,” says Stephen DiMarco, vice president of marketing at Compete. “Committing to a social commerce strategy means welcoming consumer participation throughout the marketing process.”