Online Shopping and Social Media: Friends or Foes?

Abstract

As social network use continues to increase, an important question for marketers is whether consumers’ online shopping activities are related to their use of social networks and, if so, what the nature of this relationship is. On the one hand, spending time on social networks could facilitate social discovery, meaning that consumers “discover” or “stumble upon” products through their connections with others. Moreover, cumulative social network use could expose consumers to new shopping-related information, possibly with greater marginal value than the incremental time spent on a shopping website. This process may therefore be associated with increased shopping activity. On the other hand, social network use could be a substitute for other online activities, including shopping. To test the relationship between social network use and online shopping, the authors leverage a unique consumer panel data set that tracks people's browsing of shopping and social network websites and their online purchasing activities over one year. The authors find that greater cumulative usage of social networking sites is positively associated with shopping activity. However, they also find a short-term negative relationship, such that immediately after a period of increased usage of social networking sites, online shopping activity appears to be lower.