A Poisoned Chalice: Impact of Introducing a Store on Social Media Fan Pages on Customer Engagement and Product Sales

Abstract

While social media fan pages are being widely used by firms, their value in terms of influencing customer behavior is not clear. In this study, we examine the impact of introducing "stores" on social media fan pages on customer engagement and purchase. Using a unique dataset from a fashion retailer, we find that opening a fan page store can lead to negative outcomes for the firm. Our results suggest that introducing a fan page store significantly reduces customer engagement with the fan page by 26%. More importantly, results indicate that introducing a fan page store decreases the retailer’s sales by 4.6%. The study informs managerial practice on whether to leverage fan page stores for enhancing customer engagement and promoting sales.