Internet retailers miss opportunities by not using Facebook login, Sociable Labs says

Only 30 of the top 500 Internet retailers offer Facebook login as a registration option for their sites, according to research by social commerce software company Sociable Labs.

That’s only 6 percent of the top online retailers making use of a feature the social network launched in 2008. Sociable Labs says it’s not because Facebook login isn’t useful. The option simplifies account creation, eliminates the need for another password, allows companies to better personalize their sites and collect richer CRM data, in addition to increasing referral traffic from the social network. Sociable Labs says the problem comes down to technical barriers, perceived security concerns and, in general, lack of priority among online retailers that have another registration system in place.

In fact, newer companies on the IR 500 list like Modcloth, ideeli,, One Kings Lane and Beyond the Rack, tend to use Facebook login. Without legacy systems as a barrier, these retailers are able to implement Facebook login from the beginning.

Some other companies that use Facebook login do so by using a third-party software vendor such as Gigya or Janrain, which often give users a choice between logging in with Facebook or other platforms like Twitter, Google or Yahoo. Sociable Labs points out that, compared to other networks, Facebook has richer user profile data and more robust options for sharing content back to Facebook, such as through Open Graph actions.

However, even among the companies that have integrated Facebook login, few are taking advantage of all the benefits it offers. Sociable Labs found that 30 percent of companies that implemented the feature did so incorrectly by requiring a user to create a separate site password. The point of the Facebook login button is to reduce friction in the sign-up and login process. Including a second password is perhaps meant as a security measure, but it mostly defeats the purpose of using Facebook login to streamline registration.

Sociable Labs also found that half of retailers that use Facebook login do not offer the option during the checkout process, which is often the point at which many consumers create accounts. And none of the top e-commerce sites with the login button use “persistent login” to automatically log in users when they revisit the site. An earlier Sociable Labs study found that 50 percent of users browsing e-commerce sites were logged in to Facebook, so retailers are missing a large opportunity by not enabling persistent login. Living Social, though not among the IR 500, is an example of a company that uses persistent login to instantly personalize the experience for return visitors., which is in the IR 500, uses Facebook login correctly in that it doesn’t require users to create an additional password. The site also integrated Open Graph in January to allow users to share what they buy and “fave” on the site. Within four months, the company doubled its referral traffic from Facebook and increased membership from 1.8 million to 3.2 million users.

When Facebook introduced Connect for websites in 2008, we suggested it could help developers improve the registration process and increase traffic for their sites. Thousands of websites integrated Connect within the first year, and Facebook reported that those that implemented single sign-on saw 15 percent increase in site registrations. However, developing this capability could take up to six weeks for some sites, so many either didn’t see the value or couldn’t put the resources toward it. In 2010, Facebook retired the Connect brand and released the Facebook login social plugin, which worked basically the same way as Connect but began to show users photos of their friends who have already joined a site. The company also offers a registration plugin that pre-fills sign-up forms with a user’s Facebook information.

Sociable Labs is a social commerce app provider with products to help online retailers integrate custom social plugins and Open Graph publishing on their sites. For this research, the company looked only at use of Facebook login and did not count sites that use Facebook APIs for purposes other than registration.

Here is the list of retailers in the IR 500 that have implemented Facebook login, organized by whether they ask users to create an additional password when they register.

Image credit: Sociable Labs