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Is Facebook an effective tool to access foreign markets? Evidence from international export performance of fashion firms

Authors: Alice Mazzucchelli1, Roberto Chierici1, Angelo Di Gregorio1, Claudio Chiacchierini1

Abstract

Social networks are a driving force of digital transformation and offer firms the opportunity to market products and services to both international consumers and providers, establish durable relationships with them, and improve their own competitiveness. The study analyzes the role played by the use of Facebook for online advertising, building interaction and brand communities, implementing social CRM activities, and conducting market research, as well as a sales channel alternative to physical presence, in firms’ international export performance, both in terms of managers’ perceptions and Facebook buy button conversion rate. A survey-based empirical analysis of 105 fashion firms operating worldwide was conducted. The results of multiple regression analyses show that building conversations and brand communities positively affects international export performance, while advertising via Facebook yields mixed results. By comparing firms that have a physical presence with those that do not, the former turned out to benefit from especially in-store advertising and promotions to enhance their Facebook buy button conversion rate; while the latter can improve their performance mainly by adopting outdoor and transit advertising and digital marketing. The research contributes to the existing body of knowledge on social media marketing and international business and, by adopting a firm-level perspective, provides interesting insights for practitioners since it allows to understand how to develop an effective Facebook strategy to succeed in foreign markets.

Keywords: Fashion industry, Internationalization, International export performance, Social CRM, Facebook, Digital transformation

1 Introduction

In the increasingly digital and global marketplace, firms are undertaking their own digital transformations by rethinking their organizational structures, managerial practices, and marketing dynamics, and by exploiting emerging digital technologies, especially social networks, to extend their reach into foreign markets, engage customers all over the world, and increase their overall performance (Berman, 2012; Okazaki & Taylor, 2013; McCann & Barlow, 2015; Arnone & Deprince, 2016; Galati et al., 2017; Paniagua et al., 2017). As of 2019, the number of social network users worldwide was estimated at around 3.484 billion, representing a year-on-year increase of 9 percent; among social users, 83% access social networks daily by spending more than one-third of their time consuming content on social networks, and almost half of them follow one or more firms (Statista, 2018; We are social, 2019a). Among social networks, Facebook ranks first with over 2.32 billion monthly active users and more than 1.88 billion users reached through advertising initiatives on this social media platform (We are social, 2019b). Based on statistics for 2017–2018 (at the time at which the current research started), Facebook hosted the pages of approximately 65 million firms, with strong marketing effectiveness relative to other social networks, especially in terms of generation of real customers (Chung et al., 2019). In 2018, Facebook was the largest and most established online social network whose number of users, on a daily basis, was about four times higher than for any other social networks (Facebook, 2020). In addition, in terms of reach and visibility, Facebook has been reported to be extremely effective, with more than 5 million firms advertising on Facebook each month, and advertising revenue of about $6.82 billion (Reuters, 2017). In recent years, social networks, and in particular Facebook, have started to combine relational and transactional elements to offer their users the opportunity not only to search for a product but also to purchase it (Liang et al., 2011; Liang & Turban, 2011; Turban et al., 2015). This new phenomenon, known as social commerce and sometimes as Facebook commerce, opens up new opportunities for firms. One way to conduct such commercial activity is by using Facebook’s buy button, a call-to-action button on Facebook pages and posts that enables users worldwide to acquire a product directly from a brand without leaving Facebook. For this reason, and because of Facebook’s huge global user network, in 2017, e-commerce, retail, fashion, entertainment, and media were the biggest industries represented in Facebook pages and advertiser base (Business Insider, 2017). Therefore, by integrating Facebook into their marketing and communication strategies, firms can access international networks, increase their brand advantages in foreign markets, improve their export performance, and thus support their internationalization process (Okazaki & Taylor, 2013; Galati et al., 2017; Fraccastoro & Gabrielsson, 2018).

Because Facebook has become a crucial channel through which to communicate with consumers and sell internationally, greater insight into whether and how firms are using and managing Facebook to improve their international export performance is required. In this context, understanding among both managers and scholars of the role played by social networks in general, and by Facebook in particular, in influencing firm performance remains limited (Paniagua & Sapena, 2014; Tajvidi & Karami, 2017). Therefore, identifying the contributions of social media marketing and commercial activities to firm performance is key for both research and practice, and how to measure the effectiveness of social media has become one of the most relevant research questions in the marketing management arena (Garrido-Moreno et al., 2018).

The extant literature has mainly focused on examining the impact of social media on consumer perceptions and behavior, such as customer awareness, satisfaction, engagement, or buying behavior, as indirect metrics related to firm performance; on corporate processes; on the importance of online communities; or on issues arising from the effects of these new technologies on managerial practices and commitment (Park et al., 2016; Yoon et al., 2018; Lee et al., 2018; Chung et al., 2019). Despite the growing interest in the effect of social media on consumer behavior and managerial practices and social media’s great potential, especially for export-oriented firms, there is a lack of research seeking to analyze the complex relationships between the use of social networks and international export performance (Alarcón-del-Amo et al., 2018; Gibreel et al., 2018).

Moreover, only few studies have analyzed the role played by social media, and the mechanisms involved, in fostering firm performance in a quantitative way and from an organizational perspective (Galati et al., 2017; Garrido-Moreno et al., 2018; Foltean et al., 2019). Empirical studies examining the effect of Facebook and of Facebook commerce on firm performance are very limited (Ainin et al., 2015; Park et al., 2016; Tajvidi & Karami 2017; Braojos et al., 2019). In addition, studies that analyze the impact and the synergistic effect of Facebook in enabling both customer purchases and firm performance in an omnichannel perspective are still scarce (Li & Kannan 2014; Zantedeschi et al., 2017; Kalyanam et al., 2018).

To bridge this gap, the study aims to empirically investigate whether, and how, Facebook as a marketing and communication tool and its buy button function influence firms’ international export performance. The study develops a conceptual model that allows assessment of whether Facebook represents a crucial driver of firms’ international export performance. To this end, the study investigates a sample of 105 fashion firms operating worldwide.

The research provides interesting insights, for both academics and practitioners, and some novel contributions to the social media marketing and international business literature. First, to the best of the authors’ knowledge, the study is a first attempt to empirically investigate the potential roles of the different uses of Facebook in contributing to firms’ international export performance. In particular, this study is a starting point in offering a firm-level evaluation of the impact of different kinds of social networking marketing activities that expands beyond posts and other relevant statistics, such as the number of likes, comments, and shares, on firms’ performance. Second, the study answers the call to extend research on managers’ perceptions of the effectiveness of social networking sites for business performance in a quantitative way (Galati et al., 2017; Garrido-Moreno et al., 2018; Foltean et al., 2019). Specifically, the study takes into account two different performance indicators— perceived and effective—to evaluate whether and how the adoption of Facebook affects firms’ international export performance. In particular, the study compares the managers’ perception (namely, the perceived indicator) and the Facebook buy button conversion rate (namely, the effective indicator). Third, the study furthers the knowledge about social network marketing by highlighting the crucial role of Facebook in building interaction and brand communities and for implementing social customer relationship management (CRM) in affecting firms’ international export performance. Fourth, the research context and the sample represent an interesting alternative to extant literature that relies mainly on e-commerce websites, the Internet, and social networks in general. To date, very limited attention has been paid to the Facebook commerce phenomenon. Finally, by comparing firms that have a physical presence in foreign markets with firms that do not, the study contributes also to the realm of omnichannel marketing, by investigating the impact of Facebook when used together with other communication channels in enabling firm performance.

The remainder of this paper is organized as follows. The next section provides a brief review of the extant literature and develops the research hypotheses. Then, the paper presents the methodology used and reports the linear regression analyses results. Finally, the paper concludes with a discussion of the findings, from both theoretical and managerial perspectives, and with the limitations of the study and avenues for future research.

2 Theoretical background and research hypotheses

The digital transformation due to the Internet and new information and communication technologies (ICT) has supported firms’ internationalization process by allowing firms to enter new markets faster and engage people more effectively (Bell & Loane 2010). The Internet and ICT can play a significant role in competitiveness because they generate a unique shift in the way firms obtain, process, and transmit information and, consequently, gain a competitive advantage. Together with other determinants such as firm size, investments, and foreign ownership, new digital media are regarded as one of the key determinants of international export performance (Alarcón-del-Amo et al., 2018).

In particular, social networks, which facilitate information sharing and the content generation process (Kim & Johnson 2016), represent a set of strategic resources that contributes to capturing international opportunities and achieving superior firm performance (Trainor et al., 2014; Alarcón-del-Amo et al., 2018). In fact, by integrating social networks into export marketing programs, firms can enhance their survival rate, reputation, and performance (Rapp et al., 2013; Tajvidi & Karami, 2017). Although previous studies have shown interest in analyzing the effect of social media on firm performance, the academic literature has mainly focused on the impact of firms’ social media usage and actions on consumer psychology and behavior (Lee et al., 2018; Chung et al., 2019). In fact, according to Park et al., (2016), the extant literature has treated firm performance as the performance resulting from social networking activities of individuals, using metrics that are indirectly related to economic–financial performance, such as awareness, satisfaction, engagement, and intention to use, or using obvious and common metrics such as the number of likes, posts, or shares. In line with this stream of research, other studies have analyzed the impact of social media on the effectiveness and efficiency of marketing processes and firm performance; on customer relationship performance; brand performance; retailer performance; and the value of publicly traded companies rather than on overall economic-financial firm performance measures or on social media conversion rates (Trainor, 2012; Rapp et al., 2013; Paniagua & Sapena, 2014; Foltean et al., 2019).

Moreover, few academic studies have investigated effectiveness of social media in enhancing firm performance in a quantitative way by adopting a firm-level perspective (Galati et al., 2017; Garrido-Moreno et al., 2018; Foltean et al., 2019). In particular, many previous studies have adopted a theoretical perspective and, as highlighted by Galati et al. (2017), limited research has been undertaken by analyzing managers’ perceptions regarding the effectiveness of social networking sites for improving business performance.

With regard to export-oriented firms, only a few studies have attempted to investigate the potential influence of firms’ social media adoption and usage on their international marketing strategies and marketing and communication applications (Okazaki & Taylor, 2013; Alarcón et al., 2015; Arnone & Deprince, 2016; Alarcóndel-Amo et al., 2018).

Furthermore, few empirical studies have focused on the effects of using Facebook as both a marketing and commercial tool on firms’ performance abroad. Previous studies have demonstrated that by using social networks, and in particular Facebook, firms can obtain several benefits, such as enhanced brand value (Hudson et al., 2016), sales growth (Kumar et al., 2013), social commerce (Hajli, 2014), innovation, and new product development (Palacios-Marqués et al., 2015); knowledge sharing (Munar & Jacobsen, 2014); and customer relationship management (Trainor et al., 2014). Furthermore, thanks to recent innovative transactional features, Facebook is no longer just a marketing and communication tool but, by breaking into advertising and e-commerce, it could now represent a new and alternative way to engage with customers all over the world and sell them products directly. From this perspective, a new phenomenon known as social commerce has emerged that is sometimes also referred to as Facebook commerce (Gibreel et al., 2018).

These studies show that Facebook can help export-oriented firms to accomplish various marketing objectives such as advertising, branding, customer relationships management, market analysis, and sales.

2.1 Social media advertising and international export performance

The Internet has become one of the most important tools for the international market (Okazaki, 2004) and has deeply changed the way firms and consumers interact (Mangold & Faulds, 2009); managers are therefore actively integrating new media into their communication mix. In particular, social media, which encompass the web-based applications that “build on the ideological and technological foundations of Web 2.0, and that allow the creation and exchange of User Generated Content” (Kaplan & Haenlein, 2010), have been demonstrated to significantly contribute to self-brand connection and brand usage intent (Hollebeek et al., 2014) and offer opportunities to reinforce brand image in customers’ minds and enhance their performance (Dehghani & Tumer, 2015).

Moving into foreign markets is a challenging task for firms and requires tremendous efforts in order to succeed. To successfully deal with foreign markets, firms must carefully project and develop international marketing activities because they are crucial for ensuring competitiveness and success when firms operate abroad (Akgün et al., 2014). Social media advertising offers firms the opportunity to establish a direct connection with customers abroad, promote their products and services, sell directly, and collect customer feedback. However, customers are exposed to extensive branded content every day and, consequently, they have developed several advertising avoidance techniques (Johnson, 2013). To overcome this issue, firms attempt to exploit social networks’ characteristics to realize marketing campaigns based on consumers’ personal information and customized messaging. In fact, when consumers perceive an advertising initiative as relevant, they are more inclined to develop a positive attitude toward it and respond favorably (Zeng et al., 2009). Moreover, a study by Park et al. (2016) highlights that social media advertising when associated with top brands generates the highest number of clicks and, thus, contributes to increasing awareness and firms sales.

Although the debate over the contribution social networks can make to firms operating abroad is still ongoing, previous studies have highlighted a relationship between consumers’ attitude toward online advertising and the persuasiveness of the adverts (Wang & Sun, 2010); broadly speaking, it can be assumed that by communicating with foreign customers, via social networks and using the new media to advertise products and services, firms can establish stronger relationships with them.

With specific regard to Facebook, previous studies have demonstrated that Facebook advertising significantly affects firms performance because it orients consumer behavior by guiding the consumers’ journey and their decision-making process (Galati et al., 2017). In fact, according to Yoon et al. (2018), Facebook targeted advertisements drive consumers not only to purchase but to purchase more the advertised products, therefore positively affecting firm performance. In addition, Lee et al. (2018) have demonstrated that Facebook advertising, especially in the case of informative content such as deals and promotions, drives consumers to conversion. Facebook advertising additionally offers customers the opportunity to interact with the adverts on firms’ pages and shared these adverts with their peers. Furthermore, Facebook represents a wide platform for online recommendation (Smock et al., 2011) and, consequently, firms spend a reasonable proportion of their advertising budgets on targeting and engaging potential customers. Facebook advertising is an effective means of enhancing the brand image of various goods and services (Kaplan and Haenlein, 2010) and firms’ performance. Hence, we propose the following hypotheses:

H1a: Facebook advertising positively and significantly affects managers’ perception about the impact of the use of Facebook on international export performance.

H1b: Facebook advertising positively and significantly affects Facebook buy button’s conversion rate.

2.2 Social network interactions, brand communities, and international export performance

The advent of social networks has considerably altered the way firms interact with customers (Dahan & Hauser, 2002). By the mid-2000s, firms were increasingly using these media because they represent effective means for establishing collaborative communication between firms and their customers (Rathore et al., 2016).

Firms adopt social networks in their communication mix to engage with customers from all over the world, activate direct conversations, stimulate users to post and share content, and, finally, to establish online brand communities that contribute to creating and reinforcing brand credibility and reputation generation (Sashi 2012; Gensler et al., 2013). Prior studies have established social networks as empowering tools for brand equity creation, and have demonstrated that interacting with customers through online media could contribute to generating content, creating electronic word-of-mouth, and affecting customers’ purchase behavior (Goh et al., 2013; Laroche et al., 2013). However, even if the social networks’ interactivity supports firms in creating a brand’s presence in their customers’ minds (de Chernatony & Cottam, 2006; Spyropoulou et al., 2011), recent improvement and updates to these tools have changed their nature and opened up new business opportunities. Furthermore, social commerce has enabled firms to interact with customers and sustain user interaction with one another (Liang & Turban, 2011) as well online brand communities—virtual spaces that serve as effective tools for promoting sales (Adjei et al., 2010), where users and firms share information, opinions, and offer mutual support (Park & Mcmillan, 2015).

Social networks have become a powerful tool for firms operating abroad because they enable firms to communicate with foreign customers and, at the same time, they represent a many-to-many communication channel that transfers firms’ messages effectively when foreign customers are purchasing their products or services. By expanding the interconnectivity between firms/brands and consumers, the development of online brand communities has enabled firms to directly and rapidly communicate with their customers abroad; to support branding, sales, and customer services; and, thus, to achieve superior performance (Chung et al., 2019; Tajvidi & Karami, 2017). From this perspective, by enabling the formation of online interactions and brand communities, social networks could serve as a very strong marketing tool for firms’ sales growth, branding, and profitability.

In this context, Facebook appears to be the main marketing channel for firms to interact with customers, build communities, and drive engagement because it enables both the “broadcasting” and the “communicating” interactions modes (Kabadayi & Price, 2014). In fact, through Facebook interactions and communities, people could be exposed to a great number of comments (posted by peers or by the firm), be influenced by what their peers talk about on firms’ Facebook pages, join online conversation, form attitudes, and purchase more, thus affecting firm performance (Yoon et al., 2018). Hence, we posit the following hypotheses:

H2a: Facebook interactions and brand communities positively and significantly affect managers’ perception about the impact of the use of Facebook on international export performance.

H2b: Facebook interactions and brand communities positively and significantly affects Facebook buy button’s conversion rate.

2.3 Social CRM and international export performance

Since the late 1990s, managers have been engaged in the widespread deployment of CRM technologies. In particular, managers have sought to integrate and exploit new technologies in order to gain useful insights about their customers and provide them with real-time support. ‘Social CRM’, which describes this new way of developing and maintaining customer relationships (Greenberg, 2010), is not a substitute for traditional CRM but instead “it includes social functions, processes and capabilities that consider the interaction between customers and firms as well as customers and their friends, relatives, and peers” (Choudhury & Harrigan, 2014). Social CRM lets firms collect and exploit information users share with their peers to glean new marketing trends, identify new potential markets, and create an offer that matches their customers’ exigencies and preferences. As previous studies suggest (Agnihotri et al., 2012; Choudhury & Harrigan, 2014; Garrido-Moreno et al., 2018), by combining CRM features and social networks, firms have the opportunity to gain a deeper knowledge of markets, better engage customers, reinvent customer relationships and, ultimately, enhance their performance. The development of social CRM thus has the potential to significantly affect firm performance through the development of longlasting relationships between firms and their customers all over the world. In this regard, social CRM represents a key marketing process that influences firm performance (Tajvidi & Karami, 2017; Foltean et al., 2019; Kim & Wang, 2019).

Literature on international new ventures suggests that firms attempting to do business abroad often suffer a lack of knowledge about the unfamiliar environment and its cultural, political, and economic peculiarities (Zaheer, 1995). The adoption of social CRM could offer firms several advantages because it not only enables communication with people living in different countries but also allows firms to engage customers in collaborative conversations, collect information to establish relationships with them, and store and exploit data to better serve foreign markets. In this vein, Garrido-Moreno et al. (2018) report that, by establishing contacts with customers at the global level and by exploiting knowledge acquired through social CRM, firms can improve their performance, including enhancing their economic value, especially in terms of sales. According to Agnihotri et al. (2012) and Trainor et al. (2014), because Facebook allows firms to interact directly with their customers and participate in customer-to-customer interactions, it provides firms greater access to information about customers’ sharing activities, dialogs, network members’ relationships, and groups that are particularly important in a CRM system.

Hence, we hypothesize:

H3a: Social CRM via Facebook positively and significantly affects managers’ perception about the impact of the use of Facebook on international export performance.

H3b: Social CRM via Facebook positively and significantly affects Facebook buy button’s conversion rate.

2.4 Social networks as a market research channel and international export performance

Extant research has demonstrated that social media marketing can contribute to several marketing activities such as marketing communication (Leeflang et al., 2014), engaging customers (Baird & Parasnis, 2011; Sashi, 2012), monitoring and analyzing customers’ behaviors and opinions (Lipizzi et al., 2016; Schweidel & Moe, 2014), and discovering customers’ preferences, thus satisfying their needs and addressing their latent needs (Narver et al., 2004). The last few years have witnessed an increasing number of firms exploiting social networks not only for communicating with customers but also for conducting market research. Social networks have transformed the processes involved in carrying out market research because new internet-based media provide firms the opportunity to develop their role within the relationship with their customers. Social networks, in fact, are online platforms that support the interaction and sharing of content with customers whilst also simultaneously enabling firms to undertake integrated marketing activities (Kim & Ko, 2012). By exploiting social networks for market research purposes, firms can not only obtain updated and valuable information about actual and potential customers, their preferences, and their social influence and interactions, but also gain marketing information useful to learn about their current performance and forecast future performance (Galati et al., 2017). Social media are now conceived as a free and powerful market research tool (Tajvidi & Karami, 2017).

Firms aiming to venture outside their home markets face a number of obstacles to success because they have to adapt products and processes to local customers’ tastes and preferences, take into account different cultural and governmental requirements, and overcome cultural and linguistic barriers (Lord & Ranft, 2000; Pedersen & Petersen, 2004). Because of the importance of gaining knowledge of foreign consumers, social networks represent key media through which to establish direct contact with locals. Firms that exploit social networks’ potentialities to become familiar with local customers, learn more about their cultural traits, investigate their habits and exigencies, and discover their preferences are more likely to succeed in their export initiatives. In this regard, Facebook enables firms to conduct market research by providing access to large and diverse samples of customers, allowing firms to understand how large their markets are, and inviting targeted customers to take part in surveys. Hence, we posit that:

H4a: Social networks as market research channels positively and significantly affect managers’ perception about the impact of the use of Facebook on international export performance.

H4b: Social networks as market research channels positively and significantly affect Facebook’s buy button’s conversion rate.

2.5 Social networks as alternative sales channels and export performance

Firms in foreign markets can adopt different paths when using social networks as a sales channel. On the one hand, social networks can be used as an additional tool by firms to support their traditional activities of promoting and advertising their products or brand in markets abroad; on the other hand, they can decide to fully exploit the potentialities of social networks by using them as an alternative means for connecting with worldwide customers. In fact, by interacting with foreign customers via social networks, firms have the opportunity to capture their preferences and needs in real-time (Trainor et al., 2014), involve them in an interactive process that leads to establishment of long-lasting relationships similar to those that firms would cultivate through a physical presence in abroad markets, and receive orders and sell goods or services potentially all over the world (Sinkovics et al., 2013).

Moving from resource-based view (RBV) and adopting the dynamic capabilities (DC) principles as a theoretical framework, social networks can be seen as one of the most important resources that firms can exploit to improve their performance. In fact, DC theory states that firms have the opportunity to enhance their performance if they are able to manage and combine the resources at their disposal in a way that allows them to develop a competitive advantage (Teece et al., 1997). From this perspective, IT technologies appear to be a resource that, either alone or combined with other non-technological resources, can significantly contribute to improving firms’ performance. Previous studies demonstrate that online channels positively affect firm performance in the retail sector (Xia & Zhang, 2010), suggesting also that the performance of online channels is related to firms’ commitment to these new means (Hulland et al., 2007). Consequently, it can be assumed that firms who decide to exploit social network features to establish a new sales channel in foreign markets and dedicate full commitment to this new project have the opportunity to obtain excellent results. In the present day, although social networks represent media that encourage firms to establish stronger relationships with customers (Sashi, 2012) they also offer an important selling channel (Marshall et al., 2012). Customers can buy directly online from social networks and affect firms’ sales growth, especially internationally (Tajvidi & Karami, 2017). In particular, Facebook has recently focused its website and app around social commerce features, adding the opportunity to tag items for sale in posts and allowing firms to add descriptions, prices, and locations to their content in order to simplify their customers’ buying process. These new features provide firms access to a new, credible, and reliable alternative to traditional commercial channels. Hence, we hypothesize that:

H5a: Facebook as an alternative sales channel positively and significantly affects managers’ perceptions about the impact of the use of Facebook on international export performance

Fig. 1  Conceptual model

H5b: Facebook as an alternative sales channel positively and significantly affects Facebook buy button’s conversion rate

Therefore, this paper develops a conceptual model based on social media marketing and international marketing literature that presupposes direct effects of five different uses of Facebook for marketing, communication and sales purposes on international export performance. In this regards, the study tries to explain how Facebook creates value for firms that have decided to access foreign markets, engage customers worldwide and enhance their international export performance.

Fig. 2  Models’ results

Figure 1 presents a framework explaining the relationships between Facebook uses and two firms’ international export performance, namely managers’ perceptions and Facebook buy button conversion rate (Fig. 2).

3 Methodology

3.1 Research context and sample

The empirical tests involve a final sample of fashion firms that sell apparel, bags, shoes, and related accessories internationally through the Facebook buy button. Facebook represents a relevant marketing and communication tool for firms operating in the fashion industry because it allows brands to communicate and interact with their consumers directly through the use of different forms of branded information and engagement activities (Touchette et al., 2015; Escobar-Rodríguez & Bonsón-Fernández, 2017). Despite the growth of other social networks and especially of Instagram in the fashion context, at the end of 2017, Facebook was by far the largest and most established online social network. In particular, during 2017-Q4, Facebook had more than 2 billion active users monthly, while Instagram reached 1 billion users only in June; furthermore, the number of users of Facebook on a daily basis was about 4 times higher than that for all other social networks (Facebook, 2020).

Facebook offers valuable opportunity for firms to find new prospective customers among over 2.32 billion monthly active users and over 1.88 billion users that can be reached through adverts on this social media platform (We are social 2019b). Therefore, most firms and, in particular, fashion firms have started adding shops with the “buy” call to action button inside Facebook pages (Leong et al., 2018; Socialbakers 2019). Specifically, in July 2014, Facebook began testing its buy button feature and, since then, one out of four firms have come to sell through Facebook. Moreover, almost one out of three online shoppers report finding new things to buy on social media and 26% of these shoppers state that they have bought products on Facebook, in contrast to 8% on Instagram and 6% on Pinterest (Business Insider 2020).

Therefore, this research setting provides an interesting alternative to extant literature that focuses mainly on e-commerce websites and the Internet in general. The sample analyzed was identified through collaboration with the LeFac database, a pay-per-use database that collects information and insights about firms from a wide range of industries and of different sizes that actively invest in marketing, advertising, and communication.

The authors identified all the firms in the LeFac database that have at least one manager who is closely involved in international marketing activities and that sell their product in at least one foreign country. At the end of the screening process, a list of 430 direct email contacts of managers involved in international marketing was identified. The choice of this sample pool is consistent with the aim of the research and makes the research setting appropriate, given that international marketing managers seem to be the people who are best placed to answer questions about firms’ social media marketing and international activities. In fact, previous studies focusing on the effect of social media on firm performance have suggested that managers can be considered key respondents because they seem to be the most knowledgeable about their firm’s environment and performance (Ainin et al., 2015; Tajvidi & Karami, 2017; Alarcón-del-Amo et al., 2018; Ahmad et al., 2019).

3.2 Data collection

Online questionnaire-based surveys addressed to a sample of international marketing managers of firms active in foreign markets were administered twice, from November 2017 to February 2018 and from March 2019 to April 2019.

The first survey produced 168 completed questionnaires, resulting in an adequate response rate of 39.07% (Ilieva et al., 2002). In this first survey, the surveyed managers were asked to self-report their answers, on a 7-point Likert scale, to questions about their firms’ social networks marketing activities and capabilities, the use of social networks as a sales channel, and the perceived benefits of social networking activities in terms of brand advantage and economic–financial performance in international contexts.

Because the majority of managers interviewed were employed by firms that operate in the fashion industry and that use Facebook as an international sales channel to reach customers all over the world (119 firms, 70.83%), the second survey asked these firms to provide information about their actual exporting performance in terms of the Facebook buy button’s conversion rate. After two follow-ups and discarding 14 partially completed questionnaires, the final sample consists of 105 fashion firms.

As shown in Table 1, the majority of respondents operate within firms that export products in Europe. Moreover, the majority of interviewees operate within large and medium firms (respectively 56.9% and 23.5%). Furthermore, firms tend to use more than one form of social media to communicate with their international target market. In fact, almost all of interviewees confirmed that they adopt two or more different social networks, including Facebook, (95.2%) to communicate and interact with their customers worldwide, while only few firms declared that they use only Facebook to this end (4.8%). Besides, Facebook, which ranks first (used by 100.00% of respondents), Instagram (73.3%), LinkedIn (69.5%), YouTube (64.8%), and Twitter (49.5%) are among the most popular social networks used by firms interviewed.

Because the questionnaire collects self-reported responses, three different approaches were applied to control for non-response bias. First, by enrolling five experts in pre-testing the questionnaire, each question was clarified to minimize its ambiguity and the questionnaire was designed to distribute the independent and dependent variables across its different sections. Second, all information that could be used to identify the respondents was removed, guaranteeing their anonymity. Finally, Harman’s single-factor test was performed to check whether the variance of all variables was explained by only one component (Podsakoff et al., 2003). By loading all the measures into an exploratory factor analysis (EFA), the Harman’s singlefactor test reveals the presence of common method bias if either a single factor or a general factor accounting for the majority of covariance among measures emerges (Podsakoff et al., 2003).

Table 1  Sample characteristics

 

Percentage (%)

Foreign markets  

Africa

48.6

Asia

68.6

Eastern Europe

79.0

Western Europe

86.7

Northern Europe

70.5

Southern Europe

80.0

North America

66.7

South America

54.3

Oceania

42.9

Firm size  

Micro

3.9

Small

15.7

Medium

23.5

Large

56.9

Number of social media platforms adopted  

1

4.8

2–3

31.4

4–5

38.1

6 +

25.7

Social media  

Facebook

100.0

YouTube

64.8

Instagram

73.3

Twitter

49.5

LinkedIn

69.5

Findings of the EFA indicate that the total explained variance of a single factor is 23.32%, confirming that common method bias was not a major concern for this study.

3.3 Dependent variables

Because the study aims to investigate the impact of the different uses of Facebook as a strategic marketing tool and sales channel for fashion firms on their international export performance, the study uses and compares two indicators aimed at reflecting firms’ international export performance.

Specifically, building on data gathered and following previous studies on e-commerce and the Internet in general (Ayanso & Yoogalingam, 2009; Spyropoulou et al., 2011; Sinkovics et al., 2013; Del Bosco et al., 2017; Di Fatta et al., 2018), this article identifies the managers’ perceptions about the impact of the use of Facebook on international export performance and the Facebook buy button’s conversion rate as the two main dependent variables.

With regard to the managers’ perceptions about the impact of the use of Facebook on international export performance, respondents were asked to evaluate this variable by using the international export performance construct, measured through a five-item scale based on Spyropoulou et al. (2011). This construct refers to the economic–financial benefits (market share growth, acquisition of new customers, increase of sales to current customers, profit margins, and return on sales) that a firm can achieve by selling its products and services in foreign markets. Thus, the first dependent variable was constructed using the average values reported for the five indicators (Cronbach’s alpha is 0.901).

With regard to the Facebook buy button’s conversion rate, the respondents were asked to report the number of Facebook buy button transactions and buy button visitors in 2018 from foreign countries to which the firms interviewed export. Following the studies of Ayanso & Yoogalingam (2009) and Di Fatta et al. (2018), the second dependent variable was constructed by calculating the ratio between annual Facebook buy button’s online purchases and visitors.

The variables used as proxies for international export performance assess perceptions rather than objective measurements because of the difficulty in accessing economic–financial data strictly related to the effect of social media in general and of Facebook in particular on firm performance. In many cases, this information is likely to be unavailable, unreliable, or difficult to crosscheck (Ahmad et al., 2019). According to the extant literature (Ainin et al., 2015; Tajvidi & Karami, 2017; Alarcón-del-Amo et al., 2018; Ahmad et al., 2019), responses based on manager perceptions are considered to be reliable and have been shown to generate results that are consistent with objective measures.

3.4 Independent variables

To test our research hypotheses, the paper considers the different uses of Facebook as a marketing tool for online advertising, building interactions and brand communities, social CRM, market research, and as an alternative channel to physical presence, as independent variables.

With regard to the first hypothesis, the use of Facebook for online advertising captures the extent to which fashion firms engage in international Facebook advertising by conducting marketing campaigns based on consumers’ personal information and customizing messages.

With regard to the second hypothesis, the use of Facebook for building interactions and brand communities is a measure of the propensity of fashion firms to interact and build relationships with their customers through attempts to engage them through brand communities.

With regard to the third hypothesis, the use of Facebook for social CRM described the degree to which firms tailor their social networking activities toward generating, integrating, and responding to information gathered from customers’ interactions.

With regard to the fourth hypothesis, the use of Facebook for market research captured the extent to which firms use Facebook as a real-time information and data analytics platform that allows them to better understand their customers’ exigencies and needs, estimate user interests, and conduct forecasting and predicting.

All of these independent variables range from 1—To a small extent to 7—To a very great extent.

Finally, with regard to the fifth hypothesis, the use of Facebook as an alternative channel to physical presence measured the degree to which firms exploit all the potentialities of Facebook by using and managing it as a direct channel to sell products and services in international markets. In this case, the respondents were asked to evaluate this variable by using the scale derived from Sinkovics et al. (2013) and Wu et al. (2006) and consisting of six items. Thus, this independent variable was constructed using the average values reported for the six indicators (Cronbach’s alpha is 0.760).

3.5 Control variables

To exclude other potential effects on the dependent variables, some control variables were included into the model. According to Alarcón-del-Amo et al. (2018) and Park et al. (2016), the study includes among the explanatory variables firm size (number of employees in 2018); and firms’ export experience (years since firms started exporting until 2018). Industry could not be included as a control variable in this study because this covariate was considered in the selection of the sample for analysis. Likewise, because the firm’s export experience was strictly related to the firm age, this covariate was not included in the models to avoid multicollinearity issues.

Moreover, according to Chung et al. (2019), several control variables related to firms’ marketing and communication activities outside of Facebook were included. In particular, the study controls for TV advertising, radio advertising, press advertising, outdoor and transit advertising, in-store advertising, promotion, trade fairs and events, PR and media relations, digital marketing, other social media marketing, and mobile marketing in foreign markets.

In regard to firm age, the number of social networks employed by the firms to communicate with customers was not included in the models to avoid multicollinearity issues. This variable was excluded because of its high correlation with the dummy variables concerning the marketing and communication activities outside of Facebook (Tabachnick & Fidell, 1996).

Finally, in accordance with Sinkovics et al. (2013) and Wang and Goldfarb (2017), the study also controls for firm physical presence versus firm physical absence in foreign markets.

Appendix 1 shows a detailed description of the dependent, independent, and control variables.

3.6 Independent sample t‑test and multigroup analysis

According to Sinkovics et al. (2013) and Wang & Goldfarb (2017), firms with a physical presence in foreign markets tend to integrate physical and virtual channels because the physical store acts as an informant by enabling communication of the values of the brand and because when a store opens, offline and online sales increase. The balance between online presence and offline presence is manifested during the internationalization process, but still requires deeper investigation (Li & Kannan, 2014; Wentrup 2016; Zantedeschi et al., 2017; Kalyanam et al., 2018). Therefore, this study examined Facebook usage and its effect on firm performance by comparing two groups: the physical-presence group and the physical-absence group.

Respondents were divided into two groups, the physical-presence group (n = 59) and the physical-absence group (n = 46), based on the answers given in the questionnaire.

To test the hypothesis on the difference in international export performance between firm with a physical presence and a firm without, an independent samples t-test was performed. By applying the t-test analysis (Park, 2009), the study controls for the statistical significance of the physical-presence and physical-absence groups on the two dependent variables.

With regard to the managers’ perceptions about the impact of the use of Facebook on international export performance, there was no significant difference between the group with a foreign physical presence (M = 4.97; SD = 1.07) and the group with no physical presence in foreign markets (M = 4.44; SD = 1.31).

With regard to the Facebook buy button’s conversion rate, the t-test results demonstrated that the differences between the mean score for firms with a physical presence (M = 52.08; SD = 22.92) and firms without a physical presence (M = 42.28; SD = 29.76) were all statistically significant at p= 0.05.

3.7 Models and data analysis

To test the hypotheses proposed, two models were run by performing multiple linear regression analyses in order to understand and compare the influence of the explanatory variables and control variables on managers’ perceptions about the impact of the use of Facebook on international export performance (Model 1) and the Facebook buy button’s conversion rate (Model 2). Moreover, based on the independent samples t-test results and data on the Facebook buy button’s conversion rate, multiple regression analyses were independently performed for the group of firms with a physical presence and the group of firms without.

4 Results

4.1 Correlation and VIF analysis

To investigate the correlation between the variables included in the model, Pearson correlation coefficients were calculated. For the two multi-items constructs, the average score was computed and used in both correlation and multiple regression analyses. With regard to the correlation analysis, inter-correlations among variables ranged from − 0.260 to 0.573. Because of some high correlation values among independent variables, the variance inflation factor (VIF) was applied to avoid multicollinearity and common method bias issues. The VIF statistic, which assesses how much the variance of an estimated regression coefficient increases if predictors are correlated, showed each value to be equal or below three (Hair et al., 2010). This suggests that there were no multicollinearity problems among independent variables and that the model can be considered free of common method bias (Kock, 2015). Hence, the model fit the collected data.

4.2 Multiple regression analyses

The regression results are reported in Table 2.

Table 2  Results of regressions

Dependent variable Model 1 Managers’ perceptions about the impact of the use of Facebook on international export performance Model 2 Facebook buy button’s conversion rate
Number of observations 105 105
R2 0.503 0.490
Variables Β Coef. Sign. VIF Β Coef. Sign. VIF

(Constant)

0.172

0.829

56.808*

0.016

Advertising

0.061

0.592

2.158

− 4.298*

0.056

1.586

Interactions & community

0.402**

0.000

1.563

5.913**

0.008

1.663

Social CRM

0.195*

0.037

1.786

4.643

0.081

2.096

Market research

0.099

0.228

1.503

− 4.947

0.117

2.216

Alternative to physical presence

0.002

0.989

1.802

− 3.202

0.298

1.785

Firm size

0.221

0.141

2.282

− 5.874

0.170

3.030

Export experience

0.142

0.235

1.393

− 2.076

0.529

1.549

TV advertising

0.215

0.375

1.636

− 11.203

0.078

1.658

Radio advertising

− 0.215

0.335

1.633

− 4.291

0.473

1.767

Press advertising

− 0.040

0.873

1.709

8.853

0.200

1.845

Outdoor & Transit advertising

− 0.203

0.771

1.836

11.359

0.515

1.965

In store advertising

0.085

0.877

1.873

18.897

0.172

1.990

Promotion

0.573*

0.019

1.521

9.409

0.153

1.713

Trade fairs and events

0.142

0.714

2.352

− 0.354

0.971

2.413

PR and media relations

0.117

0.656

1.547

− 1.154

0.867

1.636

Digital marketing

− 0.018

0.940

1.586

12.343*

0.043

1.630

Other social media marketing

− 0.147

0.625

1.970

− 13.958

0.131

2.687

Mobile

− 0.325

0.346

2.381

13.101

0.174

2.937

Physical presence

− 0.247

0.308

1.891

7.224

0.309

2.393

* p < 0.05

** p < 0.01

Model 1, which concerns managers’ perceptions about the impact of the use of Facebook on international export performance as the first dependent variable, exhibits an adequate goodness of fit  (R2 = 0.503). This result is quite satisfactory, especially considering the perceptive nature of data collected (Hair et al., 2011). Model 2, regarding Facebook buy button’s conversion rate as the second dependent variable, shows an acceptable goodness of fit ( R2 = 0.490). Moreover, the linear combination of the variables in both Model 1 and Model 2 is significant (Model 1: F = 4.369; Sig. 0.000 < 0.05; Model 2: F = 3.488; Sig. 0.000 < 0.05). These results suggest that F values are quite reliable and that, overall, the applied models statistically predict the dependent variables.

Drawing from a closer analysis of beta coefficients, Model 1 reveals that managers’ perceptions about the impact of the use of Facebook on international export performance is positively and significantly related to the use of Facebook for building interactions and brands’ communities (β2 = 0.402, t value = 4.896, p < 0.01) and for social CRM activities (β3 = 0.195, t value = 2.124, p < 0.05), supporting H2a and H3a. The coefficients regarding the use of Facebook for international advertising, market research, and as an alternative channel to physical presence are not significant; thus, H1a, H4a, and H5a are not supported. Model 1 also highlights that the managers’ perceptions about the impact of the use of Facebook on international export performance is positively and significantly related to the promotion activity of the firms.

As for Model 1, Model 2 shows that the Facebook buy button’s conversion rate is positively and significantly associated with the use of Facebook for building interactions and brand communities (β2 = 5.913, t value = 2.710, p < 0.01), thus supporting H2b. In addition, the use of Facebook for international advertising appears to affect the Facebook buy button’s conversion rate, even if in a negative way (β1 = – 4.298, t value = – 1.945, p < 0.05), partially supporting H1b.

The coefficients regarding the use of Facebook for social CRM, market research, and as an alternative channel to physical presence are not significant; thus H3b, H4b, and H5b are not supported.

Model 2 also shows a significant and positive effect between digital advertising and the Facebook buy button’s conversion rate.

4.3 Results from multiple regression analysis: physical presence vs. physical absence

The t-test analysis was conducted to compare the effectiveness of firms with a physical presence and those without, in foreign markets. Levene’s test and normality checks were carried out and the assumptions were met. There was a significant difference in mean Facebook buy button’s conversion rate between the two groups.

Table 3 presents the results of the multiple regression analysis performed for the two groups.

Table 3 Results of regressions: physical presence vs. absence of physical presence in international markets

Dependent variable Facebook buy button’s conversion rate
  Physical presence Physical absense
Number of observations 59 46
R2        
Variables Β Coef. Sign. Β Coef. Sign.
(Constant) 17.546 0.601 85.526 0.080
Advertising − 5.245** 0.099 − 7.227* 0.073
Interactions & community 4.939** 0.054 6.300 0.124
Social CRM 2.661 0.368 10.271* 0.084

Market research

− 2.186

0.453

− 7.459

0.317

Alternative to physical presence

− 0.504

0.883

− 1.505

0.850

Firm size

2.095

0.751

− 19.020**

0.030

Export experience

− 3.590

0.325

5.675

0.486

TV advertising

− 10.687

0.145

− 3.259

0.843

Radio advertising

0.411

0.951

− 13.613

0.295

Press advertising

20.085

0.181

− 6.478

0.706

Outdoor & Transit advertising

− 17.846

0.367

138.239***

0.002

In store advertising

23.008***

0.003

Promotion

15.015**

0.056

15.224

0.222

Trade fairs and events

9.339

0.422

− 46.918

0.069

PR and media relations

− 2.050

0.811

− 25.597

0.130

Digital marketing

8.473

0.199

25.726**

0.058

Other social media marketing

− 7.518

0.446

− 24.714

0.286

Mobile

3.221

0.740

− 6.398

0.838

* p < 0.10

** p < 0.05

*** p< 0.01

In line with the overall Model 2, the results of the regression analysis performed by considering the physical presence group reveal that the use of Facebook for building interactions and brands’ communities and for international advertising are significantly associated with the Facebook buy button’s conversion rate (β = 4.393, t = 1.994, p < 0.05; β = – 5.245, t = – 1.695, p < 0.10). Moreover, the model referred to the physical presence group also shows significant and positive effects between in-store advertising and promotion and the Facebook buy button’s conversion rate.

Different and interesting results emerge from analysis of the physical-absence group. The regression analysis revealed that besides the use of Facebook for international advertising (β = – 7.277, t = – 1.905, p < 0.10), its use for social CRM activities is significantly associated with the Facebook buy button’s conversion rate (β = 10.271, t = 1.828, p < 0.10). This model also reveals that outdoor and transit advertising and digital marketing exert a positive and significant effect on the Facebook buy button’s conversion rate.

5 Discussion

There is a widespread consensus that social media, and in particular social networking sites, represent a strategic tool for firms to communicate and engage with customers all over the world.

Moreover, social networking sites have begun to offer the delivery of e-commerce activities and transactions by exploiting Web 2.0 tools and capabilities (Liang et al., 2011; Liang & Turban, 2011; Turban et al., 2015). This new phenomenon, which is referred to as social commerce, is an innovative way through which firms can engage their customers and offer a more interactive online shopping experience (Leong et al., 2018). Facebook is the most popular social networking sites among both customers and firms, and by introducing Facebook commerce (or f-commerce) features, Facebook allows firms to display their products on their Facebook pages and customers to checkout and pay from them without leaving Facebook itself. In the current day, Facebook represents a strategic marketing and sales channel by enabling firms not only to drive their brand performance and engagement, but also to benefit from direct sales (Gibreel et al., 2018). Therefore, social networks, and in particular Facebook, can have a more direct and rapid impact on firm performance than other digital media.

Several studies have analyzed the effect of the Internet and ICT on firms’ performance (Liu et al., 2013; Zhang et al., 2013; Mathews et al., 2016); more specifically, studies have investigated the impact of social media on firms’ international marketing strategies and export performance (Okazaki & Taylor, 2013; Alarcón et al., 2015; Alarcón-del-Amo et al., 2018). However, to date, scarce research has been conducted to empirically analyze the role that social networking sites, and in particular Facebook, play in firms’ economic–financial performance, especially with reference to international contexts and firms’ internationalization process. More research is needed to better understand how Facebook has altered brand relationships as well as how it influences consumers to make purchases and thus affects firm performance (Kontu & Vecchi, 2014). In addition, very limited attention has been paid to the relationship between the different uses of Facebook and its buy button feature and international export performance (Mathews et al., 2016; Escobar-Rodríguez & Bonsón-Fernández, 2017). This represents an important research gap considering the increasing exploitation of Facebook to extend firms’ reach into foreign markets, engage customers all over the world, and enhance firm performance. This paper seeks to address these issues by identifying the different ways in which Facebook can contribute to influencing firms’ international export performance. Accordingly, this article investigates whether and how the use of Facebook for online advertising, building interactions and brand communities, social CRM, market research, and as an alternative to firms’ physical presence positively influences international export performance, in terms of both managers’ perceptions and Facebook buy button conversion rate. As indicated previously in the methodology section, this paper focuses upon findings drawn from 105 fashion firms operating worldwide that use Facebook to communicate with their targets and, through the Facebook buy button feature, sell to foreign customers directly.

The regression analyses performed in this study provide evidence to identify firms’ uses of Facebook for marketing that affect their international export performance, both perceived and effective. Results show that the effect of the specific use of Facebook for online advertising is negative when we consider the Facebook buy button conversion rate as a proxy for firms’ international export performance. In contrast, the use of Facebook for online advertising is not statistically significant when we consider the managers’ perceptions about the impact of Facebook on firms’ performance. These results support H1b, while H1a is rejected. This mixed result could be explained by the fact that social network users interact with each other far more than any advertising campaign can. Nowadays, customers appear to be particularly interested in their friends and relatives’ opinions and find them more reliable compared with traditional marketing advertisements (Lin et al., 2017). The use of traditional one-way communication to promote brands and products has lost its persuasive effect because of the overarching appeal of Facebook as a method of connection amongst peers (Kim & Ko, 2012; Shareef et al., 2019), because traditional advertising does not offer firms the opportunity for immediate contact with customers. Although social media advertising differs from traditional advertising in being more effective in generating leads and transforming prospects into loyal customers; building a dialog; and reaching out, engaging, and interacting with customers, firms in the present day need to generate support for their products and brands by exploiting interactions and community.

Online interactions and communities facilitate the social and collective actions of customers and, thus, an increasing number of firms are exploiting this phenomenon by hosting online communities to establish long-lasting relationships with customers, obtain their feedback, strengthen the brand, enable peer-to-peer interactions, and increase sales (Dessart et al., 2015; Momany & Alshboul, 2016). In this regard, the empirical results suggest that the use of Facebook for building interactions and brand communities has a strong impact on international export performance, in terms of both managers’ perception and conversion rate, supporting H2a and H2b. Facebook provides firms with the opportunity to enhance customers’ engagement, participation, interactions, and brand community relationships (Wang et al., 2020). In addition, on Facebook, people choose to like or follow certain pages or become members of communities and firms; through these communities, firms can disseminate a large amount of information in an official, public manner to people who choose to connect with them (Zaglia, 2013). Facebook is thus used to achieve important marketing goals such as building and maintaining customer–brand relationships, generating brand-related interactions, and increasing firm performance (Popp et al., 2016). In the specific context of fashion firms, Facebook represents a strategic marketing tool that, by supporting direct interactions between the brand and the customer, allows firms to offer information, playfulness, and seamless brand experience to improve customer attitudes toward online social shopping through Facebook itself (Escobar-Rodríguez & Bonsón-Fernández, 2017). The findings also show that the use of Facebook for social CRM affects only managers’ perception about the impact of the use of Facebook on firms’ international export performance. The use of Facebook data to feed social CRM enables firms to learn about the expectations of their customers, respond to their requests, resolve their concerns or complaints, and provide customer service in real-time (Abedin, 2016). The use of Facebook for social CRM allows managers to enhance their knowledge of their customers, and to better follow their evolution and social journey. Despite the positive perception of managers regarding this particular use of Facebook, social CRM seems to not affect the Facebook buy button conversion rate, suggesting that more efforts are needed in order to adopt an individual approach by personalizing communication and customer care services (Agnihotri et al., 2017).

Surprisingly, the findings did not identify a relationship between the use of Facebook for conducting market research and the use of Facebook as an alternative channel to physical presence abroad, either for firms that have a local presence in a foreign country or for those that sell their products only through online channels. There are some possible explanations for why the related hypotheses were rejected. The use of Facebook as a market research tool is still in its early stage and, consequently, firms are still learning how to fully exploit the potentialities of this new technology to recruit participants to their surveys and investigate their customers’ preferences and needs. In addition, in order to deliver a seamless customer experience, Facebook must be used by firms as a sales channel that is complementary to their offline presence, enabling them to achieve better results (Hansen & Sia, 2015).

Additionally, by testing some controls variables related to firms’ marketing and communication activities outside of Facebook, promotional initiatives were found to affect managers’ perceptions about the impact of the use of Facebook on international export performance. This result is in line with previous research that highlights a positive relationship between promotion programs and firm export (Wilkinson & Brouthers, 2006), and could be due to the fact that these activities enable managers to obtain interesting insights about foreign markets and their customers’ habits. With regard to the Facebook buy button, this study reveals that digital marketing affects customer conversion rate. By using digital marketing, firms can acquire customers, understand customer preferences, promote their brands, retain customers, and increase their sales. Digital marketing affects firms’ value creation processes by creating value for customers (through brand equity, relationships and customer satisfaction), customer equity (through strategies for acquisition, retention, and higher margin), and firm value (through sales, profits and growth rate) (Kannan & Li, 2017).

Because of the emergence of the omnichannel era, integrating physical and digital channels has become a critical issue for firms that compete in international markets. Previous studies have highlighted the importance for fashion firms of using physical and online stores interchangeably and simultaneously, especially in foreign markets (Bell et al., 2018). In particular, firms with a physical presence in foreign markets tend to integrate physical and digital channels because they exploit their physical presence to share and communicate their brand values, overcoming obstacles related to geographical distance between the firms and their customers (Sinkovics et al., 2013; Wang & Goldfarb, 2017). In addition, firms with a physical presence can improve their online sales performance using their local stores as a place for interacting, socializing, and communicating with customers (Alexander & Blazquez Cano, 2020). Moreover, from a customer’s perspective, physical presence still has importance, especially when customers are seeking to buy products such as those offered by fashion firms. Despite e-retailing being described as an effective foreign market entry strategy in the fashion industry (Guercini et al., 2018; Reynolds, 2002), physical stores still support brands in differentiating themselves and increasing their visibility, and support other sales channels. Furthermore, digital commerce still suffers some critical issues related to product returns and exchanges (Fabri & Márquez, 2020), and fashion consumers appreciate the opportunity to view and try on products before purchasing them (Mir-Bernal et al., 2018). Additionally, previous studies suggest that foreign direct investment in the form of physical stores could be an effective strategy for firms seeking to operate abroad (Guercini & Runfola, 2015) and represents a key element in the internationalization of a fashion firm (Guercini & Milanesi, 2017).

From this perspective, the study compares the effect of the different uses of Facebook on Facebook buy button conversion rate between firms that have a physical presence abroad and those that only operate online in foreign markets.

In regard to the overall model, results suggest that the use of Facebook as an advertising tool negatively affects the conversion rate of customers that buy fashion products through Facebook. However, firms that do not have a physical presence could gain benefits from using Facebook for retrieving data that, in turn, feed the firm social CRM. This latter result could be explained by the fact that firms selling abroad using only online channels can establish virtual relationships exclusively, and, consequently exploit only digital platforms to manage and build closer relationships with customers, and obtain fine-grained information about them. Social media plays a crucial role in firms’ relationship-building and communication with their customers (Choudhury & Harrigan, 2014), especially in foreign markets (Alarcón-del-Amo et al., 2016). The main purpose of CRM is to build closer relationships with customers and communicate with them: in particular, social CRM, which places more emphasis on listening to customers and what they say about firms, their products, and brands, plays a role in establishing relationships with customers, having a dialogue with them, and engaging them in discussions and activities. Therefore, by generating conversations and relationships with customers, social CRM contributes to improving firms’ conversion rate (Trainor et al., 2014; Agnihotri et al., 2017).

By testing some controls variables related to firms’ marketing and communication activities outside of Facebook, this study results show that in-store advertising and promotion could have a significant effect on firms’ performance in international markets, only for firms with stores abroad. The omnichannel environment is popular among customers (Balakrishnan et al., 2014); furthermore, thanks to the show-rooming phenomenon, customers increasingly visit the offline and online stores of the same retailer because, as also suggested by previous studies (Gensler et al., 2017), they expect to buy at a lower price when they purchase products online. From this perspective, it is not surprising that in-store advertising has positive effects on Facebook shopping. Moreover, firms could drive store traffic in a variety of ways, in particular by conducting promotional activities which increase product and brand awareness, firms exposure to customers, and their conversion rate. Promotions can affect consumer purchasing patterns and stimulate sales (Jiang et al., 2015).

Interestingly, results suggest that firms without a physical presence in foreign markets rely heavily on digital marketing and outdoor & transit advertising. In the context of digital marketing, fashion retailers encounters unprecedented impact and the competitive edge of traditional marketing is disappearing. This change generates extensive opportunities to interact with foreign customers, even if not all firms have sufficient knowledge to optimize the usage of digital marketing to add value to their offers. Customers require real-time interaction with their favorite fashion brands, preferring an active social media presence that contributes to generating emotional attachments (Chu & Seock, 2020). With regard to outdoor & transit advertising, these results are in line with recent trends for global online firms that approach advertising differently than other businesses. These firms combine innovation and creativity to obtain better results from their marketing activities, using billboards more than ever to engage their customers. In particular, digital out-of-home advertising provides firms with innovative ways to act immediately on new ideas, allowing people talking about these initiatives on social media and, consequently, enabling firms not only to raise their brand awareness but also improve their performance in international markets (Adivar et al., 2019).

6 Conclusion

In the present day, technologies, especially social networks, are acknowledged as one of the most important sources of engagement for firms. In order to interact with customers all over the world and sell their firms’ products, marketing managers seek to fully exploit social networks’ features. Accordingly, this paper explores the use of Facebook as a marketing and sales channel in the international scenario. In particular, this study attempts to shed light on managers’ perceptions of the effects of Facebook on export performance in the fashion industry, offering a subjective quantitative perspective of the adoption of this social network to sell products in foreign markets, as well as to understand whether and how different uses of Facebook affect online conversion rate from an omnichannel perspective. Some interesting theoretical and managerial implications emerge from the study.

From a theoretical perspective, this study constitutes an important step forward in understanding the role played by the different uses of Facebook in enhancing firms’ international export performance. In fact, to the best of authors’ knowledge, there is a lack of research analyzing the different uses of Facebook as a marketing tool (Escobar-Rodríguez & Bonsón-Fernández, 2017). This study is a first attempt to empirically investigate whether and how the use of Facebook, as a strategic marketing and sales channel, contributes to firms’ international export performance. Specifically, this study adds to the extant literature by offering a quantitative and a firm-level evaluation of the impact of different kinds of social networking marketing activities that go beyond posts and other relevant statistics widely used in previous studies, such as liking, commenting, and sharing, on firms’ performance.

Second, the study furthers the knowledge about social-network-based marketing strategies by highlighting the crucial role of different uses of Facebook. In line with previous studies, the findings reveal that the effectiveness of Facebook as a marketing tool is evidenced by its effect on firm performance, especially in terms of sales (Tajvidi & Karami, 2017; Yoon et al., 2018). More in detail, this study’s results add to the current knowledge on marketing advertising by stressing the stream of literature suggesting that nowadays firms have to integrate peer-to-peer interactions within their marketing strategies in order to better advertise their products and brands, co-create value with customers, and enhance their sales performance. Furthermore, drawing on social interaction and social support theories, this study’s findings confirm that Facebook offers different values to firms by enabling word-of-mouth, increasing sales, sharing customer experience and generating social support for consumers internationally (Lu et al., 2010; Agnihotri et al., 2012; Hajli 2014). By developing long-lasting relationships and online communities that have the potential to rapidly expand international communications, firms can effectively achieve superior performance via Facebook. In fact, Facebook, by enabling the formation of interactions and brand communities, supports firms in branding and sales. In addition, firms can use Facebook also to enhance the effectiveness of their social CRM and thus improve their performance. Facebook social CRM represents a core marketing process that influences firms’ performance by improving customer interaction and relationship management through acquisition of the required knowledge from customers, both actual and potential (Garrido-Moreno et al., 2018; Foltean et al., 2019). However, this study opens up a debate regarding the contribution of social CRM via Facebook to firm performance in terms of international sales. In fact, mixed results have emerged: from the one hand, managers have a positive perception regarding the use of Facebook for social CRM activities; from the other hand, Facebook social CRM activities turned out to not affect the Facebook buy button conversion rate.

Additionally, in terms of the impact of the use of Facebook for conducting market research abroad and as an alternative channel to physical presence on foreign markets, this study findings are not consistent with the extant literature focused on export performance (Sinkovics et al., 2013; Wang and Goldfarb, 2017). Thus, more research could be useful to clarify the relationship between the use of Facebook for social CRM, market research, and for selling products abroad, and firms international export performance.

Third, by taking into account and comparing two different international export performance indicators, namely the managers’ perception and the Facebook buy button conversion rate, the study results provide interesting insights into which Facebook uses are particularly important for the achievement of superior performance, both perceived and effective. This represents an advancement over previous studies that have only considered either the managers’ perception or the conversion rate as indicators of international export performance. Moreover, the study answers the call to extend research on managers’ perceptions of the effectiveness of social networking sites for enhancing business performance. In fact, previous studies have mainly investigated the impact of social media on the effectiveness and efficiency of marketing processes and firm performance by using performance measurements focused on customers, such as customer awareness, satisfaction, engagement, intention to use, number of likes, posts or shares, rather than on managers’ perception about the overall economic–financial performance or conversion rates.

Fourth, the study contributes to the current understanding about the impact and the synergistic effect of Facebook in enabling both customer purchases and firm performance through an omnichannel perspective, by comparing firms that have a physical presence in foreign markets with those that sell their products exclusively online. The regression analysis has highlighted that, in the era of omnichannel retailing, the physical presence allows customers to obtain information through in store advertising and promotion. At the same time, results reveal that firms not having a physical presence on international markets could rely on outdoor and transit advertising and on digital marketing activities to attract and engage foreign customers. These results are in line with previous studies on omnichannel marketing management (Reynolds, 2002; Guercini et al., 2018; Alexander & Blazquez Cano, 2020). These differences call for a better understanding of how Facebook has altered the firms’ marketing and communication activities, and the relationships between firms and their customers, in particular by influencing consumers choices, buying behavior, and their willingness to recommend products within their social networks (Li & Kannan, 2014; Zantedeschi et al., 2017; Kalyanam et al., 2018).

Finally, because the extant literature has paid very limited attention to analyzing the effect of Facebook and the Facebook commerce phenomenon on firm performance (Ainin et al., 2015; Park et al., 2016; Tajvidi & Karami, 2017; Braojos et al., 2019), the research context and the sample represent an interesting alternative to previous studies that rely mainly on e-commerce websites, the Internet, and social media in general. Therefore, the study of the innovative use of the Facebook buy button in the fashion industry landscape represents an important theoretical contribution.

From a managerial perspective, the findings of this study contribute to practice by providing firms with real guidance on how to develop a successful Facebook strategy in order to positively affect their international export performance. First, the study provides marketers with useful insights on how to allocate their resources and exploit Facebook for building interactions and brand communities and implementing social CRM activities to directly influence outcomes, in terms of economic–financial performance, within the increasingly digital and global marketplace. In particular, marketers should develop specific actions to communicate their brands, take part in conversations, and engage customers worldwide by building brand communities. In addition, by using Facebook as a strategic marketing tool, marketers can implement a social CRM strategy that helps firms to better understand their potential and actual customers and engage with them by facilitating collaborative experiences and creating customer value. The second implication for marketers is that they should focus their attention on the use and management of Facebook as a direct sales channel to foster and support their foreign customers’ decision-making process and consumption behavior, and, consequently, to enhance their international export performance. Making marketers aware about the potential use of the Facebook buy button as a new way to sell to their customers in foreign markets can open up new opportunities for international market growth. A final implication, related to the previous one, concerns the relationship between international export performance and the use of Facebook as an alternative channel to physical presence. Practitioners should be aware that Facebook as a direct sales channel can effectively contribute to achieving greater economic–financial performance in international contexts as well, especially in terms of conversion rate. However, although Facebook does not replace the firm’s physical presence abroad, it can represent a crucial complementary tool useful to increase brand image and awareness among foreign customers, drive customers’ preferences, and support their buying behavior.

6.1 Limitations and future research agenda

This research has certain limitations that need to be addressed in future research. This study is based on survey data with only one informant from each firm, and is focused only on one sector of activity. In order to extend the findings and make results generalizable, future research might adopt a wider sample of analysis, collecting information from several industries and investigating different perspectives within the same firm. Moreover, with regard to the sample of analysis, future research could further validate the empirical model developed by also taking into consideration different kinds of firms especially in terms of either export experience (born global versus traditional ones) or Facebook usage (firms that are using Facebook versus firms that are not).

In addition, the study analyze only some uses of Facebook as a marketing and sales channel in the context of their effect on firms’ performance. Future research might examine the potential impact of other uses of Facebook on international export performance, in terms of both perceived and effective indicators. Although this study provides interesting insights for understanding the contribution of Facebook to firms’ export performance, it uses perceptual information retrieved from managers directly involved in planning marketing activities in foreign countries, making it difficult to generalize the findings. Future research may adopt more objective measures in order to better evaluate marketing activities on Facebook, as well as their contribution to foreign customer engagement.

Furthermore, data collection was only performed over a single analysis period, because the Facebook buy button is a relatively recent and underexplored feature. Future research could extend the analysis period by analyzing longitudinal data in order to increase the generalizability of the results.

Finally, this study, through its analysis of the Facebook buy button feature, is a starting point for future research. Other social networks, such as Instagram, WhatsApp, and WeChat (on the Chinese market) have also started to combine transactional features with relational ones. In particular, given that visual content is more rapidly processed by users than text, visual-based social media are growing faster than ever. In this scenario, Instagram has seen serious growth in 2019 and consumers continue to prefer images/videos over text, suggesting that future research should take into account this trend and compare how different uses of these platforms can affect conversion rates in foreign markets.

Appendix: Description of variables

Variables

Description

Dependent variables  

Managers’ perceptions about the impact of the use of Facebook on international export performance

Managers’ perceptions about the impact of the use of Facebook on market share growth, acquisition of new customers, increase in sales to current customers, profit margins, and return on sales

Facebook buy button’s conversion rate

Ratio between annual number of purchases through Facebook’s buy button and number of visitors

Independent variables  

Advertising

Ordinal variable with seven levels describing managers’ perceptions about their firms’ engagement in realizing Facebook marketing campaigns based on consumers’ personal information and customizing messages

Interactions & community

Ordinal variable with seven levels describing managers’ perceptions about their firms’ engagement in interacting and building relationships with their customers in order to engage them through brand communities

Social CRM

Ordinal variable with seven levels describing managers’ perceptions about their firms ability to tailor social networking activities to generating, integrating, and responding to information obtained from customers’ interactions

Market research

Ordinal variable with seven levels describing managers’ perceptions about their firms’ usage of Facebook as a real-time information and data analytics platform that allows them to better understand customers’ exigencies and needs, estimate user interests, and conduct forecasting and predicting

Alternative to physical presence

Average of six items’ values reported by managers to express the degree to which their firms exploit the potentialities of Facebook by using and manage it as a direct channel to sell products and services in international markets.

Completely withdrawing our physical presence from foreign markets is our key objective; Facebook has given us a much better understanding of our target foreign markets; Facebook interaction with our foreign markets allows us to see things that we would have seen via physical interaction; our company has gained the same customers as it would have via a physical presence in foreign markets; our Facebook page is used to order and purchase our goods or services internationally; relative to our competitors, our Facebook usage for export management is more advanced

TV advertising

Dummy variable that equals 1 if a firm uses TV advertising to promote its products in foreign markets; 0 otherwise

Variables

Description

Radio advertising

Dummy variable that equals 1 if a firm uses radio advertising to promote its products in foreign markets; 0 otherwise

Press advertising

Dummy variable that equals 1 if a firm uses press to promote its products in foreign markets; 0 otherwise

Outdoor and transit advertising

Dummy variable that equals 1 if a firm uses billboards and public transport to promote its products on foreign markets; 0 otherwise

In store advertising

Dummy variable that equals 1 if a firm uses in-store advertising to promote its products in foreign markets; 0 otherwise

Promotion

Dummy variable that equals 1 if a firm uses promotion to promote its products in foreign markets; 0 otherwise

Trade fairs and events

Dummy variable that equals 1 if a firm uses trade fairs and events to promote its products in foreign markets; 0 otherwise

PR and media relations

Dummy variable that equals 1 if a firm uses PR and media relations promote its products in foreign markets; 0 otherwise

Digital marketing

Dummy variable that equals 1 if a firm uses digital marketing (different from social media marketing) to promote its products in foreign markets; 0 otherwise

Other social media marketing

Dummy variable that equals 1 if a firm uses social media other than Facebook to promote its products in foreign markets; 0 otherwise

Mobile marketing

Dummy variable that equals 1 if a firm uses mobile devices (smartphones and tablets) to promote its products in foreign markets; 0 otherwise

Firm size

Number of employees in 2018

Export experience

Number of years since firm started exporting until 2018

Funding: Open access funding provided by Università degli Studi di Milano – Bicocca within the CRUICARE Agreement.

Open Access: This article is licensed under a Creative Commons Attribution 4.0 International License, which permits use, sharing, adaptation, distribution and reproduction in any medium or format, as long as you give appropriate credit to the original author(s) and the source, provide a link to the Creative Commons licence, and indicate if changes were made. The images or other third party material in this article are included in the article’s Creative Commons licence, unless indicated otherwise in a credit line to the material. If material is not included in the article’s Creative Commons licence and your intended use is not permitted by statutory regulation or exceeds the permitted use, you will need to obtain permission directly from the copyright holder. To view a copy of this licence, visit http://creativecommons.org/licenses/by/4.0/.

Originally published at: Journal of Management and Governance https://doi.org/10.1007/s10997-021-09572-y

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Authors and Affiliations

Alice Mazzucchelli Ph.D. is Assistant Professor of Management at the University of Milan-Bicocca. She is a Temporary Lecturer in Marketing Management and Entrepreneurship at the University of Milan-Bicocca. She is also involved in several research projects, and her research is accomplished in collaboration with different national and international research groups. Her research interests include social media marketing, digital transformation, knowledge management, innovation management, and entrepreneurship.

Roberto Chierici is Assistant Professor of Marketing at the Department of Business and Law of the University of Milan-Bicocca, Italy. He obtained his PhD in Business Administration, Management and Territorial Economics from the University of Milan-Bicocca in 2016. His research interests lie in the areas of social media and customer relationship management, social commerce, multichannel customer management, social media, information and knowledge management, and new forms of entrepreneurship.

Angelo Di Gregorio is Full Professor of Management at the University of Milano-Bicocca (Italy), where he also acts as Scientific Director of CRIET, Inter-University Research Center in Territorial Economics. He teaches Marketing Management, at the Faculty of Economics, University of Milan-Bicocca. He serves on several advisory committees to the Italian Ministry of Economic Development and he is a member of the steering committee of the various scientific disciplines and has published numerous contributions on business strategies, marketing and communication and has carried out consultancy activities related to strategy, marketing, communication and business start-ups.

Claudio Chiacchierini is Full Professor of Management at the University of Milano-Bicocca (Italy), where he also acts as deputy Director of CRIET, Inter-University Research Center in Territorial Economics. He teaches Management and Communication Management at the Faculty of Economics, University of Milan-Bicocca. He has published several contributions on business strategies, management, marketing and finance.


[1] Department of Business and Law, University of Milano – Bicocca, Via Bicocca degli Arcimboldi, 8, 20126 Milano, Italy

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