Coming to a Retail Site near You: Social Sign-ins

This coming year, look for a growing number of online retailers to use visitors’ Facebook sign-ins as an on-site registration tool rather than their own proprietary log-in systems, according to a new analyst report from eMarketer.

The reason? While retailers have used site registrations in the past to help them tailor online offerings to specific consumer preferences, letting consumers sign in using their social network identities offers a kind of ad hoc “universal registration”. More importantly, it also holds the promise of using some of the information visitors have posted to their Facebook page about their likes, preferences and social graph—a potential data bonanza for merchants, provided they learn to use it safely and within accepted limits.

The eMarketer report, titled “Social Commerce; personalized and collaborative shopping Experiences”, points to research published last September by Gigya, a provider of solutions that let visitors sign on to their social networks while on third-party sites.

According to that study, 18% of ecommerce providers said they had already implemented a social sign-on within their sites by August 2010, while another 18% said they were in the middle of such an implementation and 21% said they planned to start building such a capability in the next 12 months.

“So a minority of retailers has social sign-in now on their sites, but a majority has implementation plans in various stages,” says Jeffrey Grau, senior ecommerce analyst with eMarketer and author of the new report.

One driver behind this trend to incorporate social sign-ins on retail web sites is the desire to relieve visitors of the burden of remembering multiple logins and passwords. “Think of it as a universal sign-on,” he says. “You’ve got 500 million people already registered on Facebook. So they don’t need to register with a new retailer.”

But with that social sign-on in place and activated, retailers can then avail themselves of a much richer stream of preference data than most consumers would volunteer in the course of a standalone site registration. Because Facebook in particular serves as a social hub, merchants can get a look not only at what those visitors using the social sign-in have written in their profiles but also what sites, products and content they’ve “liked” elsewhere on the Web.

They can also make use of the Open Graph feature Facebook deployed in April 2010, giving them (with user permission) a view into the likes and preferences of members’ friend lists. Grau points out that Amazon.com has already integrated this feature into its recommendation engine and uses it to pull up both Facebook friends’ birthdays and suggested music or movie gifts based on those friends’ profile preferences.

Several obstacles remain to wider and more extensive use of social sign-ins among online retailers, Grau points out. First among these is consumers’ general wariness to let retail sites less trusted than Amazon.com access their Facebook or other social accounts. A July 2010 survey by the Marist Institute determined that half of social network users are concerned about privacy on social networks. That anxious proportion increases among consumers 30 and older—and of course with the periodic missteps by social networks like Facebook in altering their privacy and access policies.

The other limitation to wider, more effective use of social sign-ins is that right now marketers are limited to tailoring their sites to the explicit preferences expressed by users in their profile statements, their likes, and their friends’ preferences. Future recommendation engines may be able to look not only at these clear markers but to analyze comments made in wall posts and use the preferences found there to further target displays and ads served up to Facebook users.

“These early merchant users [of social sign-ins] are walking very gingerly with the access they have,” Grau says. “If it’s a success, there may be more powerful ways to use this personal information. But companies like Amazon are still just testing the waters right now, to see how people react to seeing recommendations based on their Facebook likes and interests and their friends’ birthdays.”