Commercializing Social Media? How Showrooms on Social Media Fan Pages Influence Customer Behavior

Abstract

While marketing on social media fan pages has received widespread attention, few studies have investigated the impact of adding a showroom on social media fan pages. A showroom on social media fan pages is unique in a way that it may amplify the conflicts between businesses’ commercial purposes (selling) and customers’ expectations (socializing) on social media, making it unclear how a showroom on social media fan pages may influence customer behavior. In this study, we open the black box by using data from a leading fashion retailer. We found that adding a showroom on fan pages has both a positive implication which leads to more user engagement and purchases from the retailer, and a negative implication which leads to more “unfollow” from the retailer’ fan page on social media. We further find that such impact is moderated by customer willingness to disclose private information. Specifically, the positive (negative) implication is significantly greater (smaller) for customers who are willing to disclose their private information to the retailer on social media. Mechanism-level analysis suggests that a showroom on fan pages can increase customer purchases both directly and indirectly by facilitating their engagement with the fan page and customer willingness to disclose private information negatively moderates the mediation effect of user engagement on purchase behavior. In addition, results from an online experiment indicate that such showrooms can increase unfollowing by undermining users’ social perception of the fan page and raising users’ privacy concerns. Our findings suggest that even when firms see a significant increase in user purchases and activities after adding a showroom on their fan pages, they should carefully consider the potential risk of driving away customers and strategically target users who are less privacy sensitive.

Keywords: Social media; fan page; showroom; privacy; purchase; engagement; unfollow