As Facebook celebrates its 10th birthday, Retail Week looks at how it has benefited retailers.

Tesco developed a game, the Tesco Delivery Dash, which improves customer engagement.

1. Engagement

Facebook has 1.23bn monthly active users and the average user spends almost six hours a month on the site. With such a captive audience, retailers have done their utmost to engage with both customers and potential customers.

Facebook allows retailers to speak to customers in a more informal manner and give a voice to their brands. Electricals specialist Ao.com, which has 1.43m fans, uses Facebook as one of its biggest sales tools. It runs Facebook competitions to win goods to encourage people to review its product. It has also linked Facebook with its own website so shoppers can see what their friends think of products.

Other retailers have been equally inventive. Tesco developed interative game Delivery Dash on Facebook to build brand engagement and has also integrated virtual fitting room technology into its F&F clothing brand’s page.

eBay senior director for m-commerce Olivier Ropars said: “This year we’ll see an even bigger drive towards integration of social media and peer-to-peer recommendation. There’s a huge opportunity for brands to capitalise on the sweet spot between utility and engagement, and social media is uniquely positioned to take advantage as retailers become less reliant on search and find new ways to inspire and engage customers across social channels.”

2. Using and integrating data

Facebook’s Open Graph – the footprint of connections that Facebook users produce as they interact with friends and online content – has allowed retailers such as eBay to integrate marketing tailored for a specific audience. Although some users are uncomfortable with such use of their data, Facebook remains a free service which they are paying for with their information.

Retailers can also now integrate their Facebook page users’ data with their existing databases, allowing them to get in touch with customers quickly and effectively.

Facebook also claims that advertisers on its site can measure offline sales driven by its campaigns on the network. Marketers can upload hashed data - anonymous information they can analyse - and Facebook matches it to its own database to compare the purchase behaviour of customers who saw its ad to those who did not.

3. Driving traffic

A large number of retailers use Facebook simply to drive traffic to their own website. In the US, Facebook drove 5.32% of traffic to the top 500 retailer websites over Christmas. Social media as a whole is the third biggest source of traffic to retail websites, behind search engines and shopping sites with Facebook leading the surge. However, on Facebook itself retailers have struggled to make the social network appealing for customers to transact on. Several retailers including Asos, Oasis and Gap have closed their transactional Facebook stores due to poor demand.

4. Targeting new customers

Retailers have utilised the network to target new customers. Department store group House of Fraser teamed up with the National Union of Students to offer a 10% student discount to Facebook users who ‘like’ the retailer. It is one of many retailers from Boots to Ao.com which have used promotions to attract new customers to its brand pace.

5. Marketing

Burberry is one of the most effective retailers at using Facebook as a marketing tool. The luxury retailer, which has almost 17 million fans on the social network, devotes 60% of its ad budget to digital, producing lots of slick campaigns and original content which is perfect for sharing on social media.

The brand streams its London Fashion Week shows on its Facebook page an in 2012 linked the launch of its Burberry Body fragrance to Facebook by giving a sample to everyone who ‘liked’ it.

6. Instagram

Facebook acquired photo sharing app Instagram in 2012. The app had already been used by many retailers, particulary in fashion, to drive traffic and showcase collections and users and retailer activity has continued to grow.

Analysis: Six ways Facebook has changed retail