Commercializing Social Media? How a Showroom Section on Social Media Fan Pages Influences Customer Behavior

Abstract

While marketing on social media fan pages has received widespread attention from both the academia and industries, few studies have investigated a novel practice of adding a showroom section (i.e. a section that provides a catalog of all products for sale) on fan pages. The impact of showrooms on product sales has been investigated in the online and offline context, but the different customer base and expectations on social media makes it unclear how a showroom section on fan pages may influence customer behavior. In this study, we open the black box by empirically examining how a showroom section on social media fan pages influences customers’ decision to engage with, purchase from, and unfollow retailers. Using data from a traditional fashion retailer which mainly operates offline, we found that adding a showroom section on fan pages has both positive and negative consequences: while it benefits the retailer by increasing customer engagement and purchases, it also makes the retailer’s followers more likely to unfollow its fan page on social media. We further find that such impact is moderated by customer privacy sensitivity. Specifically, the positive (negative) impact is significantly greater (smaller) for customers who are willing to disclose their demographic information to the retailer on social media. We also conduct additional mechanism-level analysis to investigate the dynamics between customer engagement and purchase behavior. Results suggest that customer adoption of the fan page showroom can increase their purchases both directly and indirectly through facilitating users’ engagement with the fan page and customer privacy sensitivity negatively moderates the mediation effect of user engagement on purchase behavior. Our results have implications for both theory and practice: a showroom section on social media fan pages is not a risk-free way to facilitate sales, and retailers should carefully consider the potential negative implications when showrooming products on their fan pages, especially if their customers are sensitive to privacy issues.

Keywords: Social media, business fan page, showroom, privacy, unfollow, purchase, engagement