When rebrands go wrong

(And how to avoid the pitfalls)

Brands must believe the f-commerce hype

The opportunity Facebook commerce offers brands is currently worth many billions of pounds and it is likely to grow in value.

We live in an instant gratification society. Everything has to be now, now, now. When we search for something we need instant results; when we talk to someone we want a response straight away; and when we want to shop we need the store to be available to us at all times.

Now there is something that marketers need to know about immediately: f-commerce. This phenomenon, also known as Facebook commerce or social shopping, is likely to reach a value of $30bn by 2015, according to Booz & Company.

F-commerce takes our instant gratification needs to the next level. Rather than Facebook being a place to chat, share photos or stalk ex-partners, it becomes a mini-internet in its own right. You can get everything you need without ever leaving the social network where you are spending your leisure time.

Want to watch a film online? You can now rent Warner movies, like The Dark Knight, through Facebook. If you fancy a new outfit, simply head to ASOS’ Facebook store. Even Heinz is in on the act, flogging a new ketchup variant to social networkers before they hit supermarket shelves.

But shouldn’t brands concentrate on driving any interested customers to their own websites, where they have their retail environment set up already? With all the hype about the social networking area, it is easy to dismiss a new buzz phrase like f-commerce as another unnecessary distraction from the real business of selling stuff.

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Rather than Facebook being a place to chat, share photos or stalk ex-partners, it becomes a mini-internet in its own right. You can get everything you need without ever leaving the social network where you are spending your leisure time

But f-commerce is one of the most exciting opportunities for marketers that we are likely to see in 2011. Just look at the numbers. Facebook has more than 600 million users worldwide and 30 million in the UK - half the British population. That is an enormous audience all in one place. There is no high street on earth that offers that many people ready to walk into your store.

It’s not just the size of the audience that should thrill marketers either. It is the nature of the audience. When consumers transact with brands through a Facebook store, the companies have access to a mine of data about that shopper. Privacy settings may mean that a brand can’t see everything that someone has ever posted on Facebook, but people reveal so much about themselves on a social network that marketers should still be able to build up an unrivalled picture of consumer attitudes, interests and propensity to buy.

Facebook also offers marketers the chance to get close to consumers who are passionate about their products. After all, if a consumer “likes” your brand’s page or store, they are far more likely to buy something from you. You are selling to people who want what you have to offer.

This audience is also one that is used to recommending something they like. The very nature of chat on a social network means that people discuss the latest films, clothes, drinks and events. And they want to tell other people their views. So when you rent The Dark Knight film on Facebook, you are likely to post your feelings about it after you have seen it. Or be keen to watch the movie because all your friends are chatting about it. Word gets around.

F-commerce also gives brands the chance to make concrete links between the “likes” that a brand can amass on Facebook and the company’s bottom line. At the moment, marketers are forced to show their impact in the social space through what many finance directors consider to be “fluffy” metrics. So 3 million people “like” your brand page? But does that mean anyone actually bought the brand as a result of seeing it on Facebook?

F-commerce means that marketers can finally track how any positive affection for the brand has translated into sales. Rather than fobbing the finance director off with talk of how everyone is getting social, marketers should now be able to show the exact path their Facebook consumers took from affection to purchase. This will also help inform future marketing campaigns.

Of course, marketers shouldn’t pile into Facebook just because they see Heinz or Warner appearing there. The social space and the mini-internet of Facebook is slightly different from the larger internet as a whole. People go there to build relationships. Facebook wasn’t set up as a shopping platform, it’s designed to connect people.

Many people don’t want to come across brands at all on a social platform. They simply want to chat to friends and go about their own business. If they feel like the space is becoming overly commercial, they might lose interest in the network altogether. And they are likely to take away with them a negative view of the brand that stepped over the line.

Yet if marketers get it right, f-commerce could be a powerful tool. It might be important to do it properly, but it certainly isn’t just hype. According to agency SortPrice, which builds Facebook retail storefronts for brands, it alone has already constructed 1500 stores for clients, which translates into 7.6 million products - or $3.78bn in merchandise - on the site in 2010. Thousands of brands already “like” f-commerce, what about you?

Readers' comments (10)

  • Isn't this just more hype? Brands must believe the hype, because the hype tells them to.
    This article lacks balance.

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  • Could it be that this new channel to market simply dilutes the existing level of sales and spreads it through more channels?

    Is it more suitable for 'trials' or 'sampling' as it may well lend itself to this more suitably?

    When looking at a new sales outlet, a major question should be to what extent it will impact existing outlets with the necessary cost implications this has. The article doesn't touch on any of this and is very basic in nature to say the least. Not well balanced and lacking in serious consideration. More of a 'knee jerk reaction'.

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  • Technology will soon allow you to understand you have 20000 clients in your facebook network who have just announced their engagement that week. You will be able to drive viral marketing in way not currently possible through this channel. There are apps on facebook generating multi millions of hits per week. The economics in F-Commerce will change the game for those who adopt it.

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  • This is merely a new sales channel. The question it does pose well is what will be the sales channels of the future i.e as we see more and more consumer goods move into the online arena will there be a traditional retail front?

    It does provide a contradiction though. The article begins with a proposition that the consumer seeks instant gratification, however, online merely provides part of the gratification process. This is not fulfilled under the goods arrive, which in most cases can be easier and quicker to satisfy through traditional retail shopping. What facebook does provide is a way to seek peer approval and gratification that your purchase may provide through 'sharing' your purchase. This then allows for peers to comment accordingly.

    In my opinion, this is a dilution of the host brand, namely Facebook. This was established as a social platform to share thoughts and ideas and now is extending its model into a commercial market to become a shopping portal. I am unsure what consumers will make of the 'shop' platform, however, I for one prefer to maintain my connection with a brand directly rather than via a third party.

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  • A thought for user perception of security on Facebook - US banks have begun allowing users to view account data via their Facebook page.

    While we're happy with e-commerce via Facebook, will UK users go further and adopt banking apps? The industry leading First Direct (HSBC Group), Natwest and LloydsTSB have all upped their game of late and are obvious candidates to experiment. But would you feel comfortable 'f-banking'?

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  • Whilst this might sound lovely for brands, what's the experience us lowly users want to have with FB going to be like? I go on the site to catch up with friends and an abundance of commercialisation is likely to drive people away.
    The cynic in me thinks this is a ploy to drive perceived value up for when they IPO knowing that in 4-5yrs it might well implode!

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  • Yes, many users may be put off and feel that fb has lost it's purpose, also, it may not be right for every product/service/brand - each product and market will demand a different sales model. But if it is right, then the advantages in terms of data mining, level of consumer engagement, reach and 'likes' that can potentially translate into (measurable) sales are unquestionable.

    In my view, it's still early days and the scepticism surrounding this new model is well founded, but F-commerce is definitely beyond hype now. As one of the comments above, it is, like it or not, yet another sales channel which social media-savvy marketers will now at least need to consider when planning a well integrated campaign.

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  • Yes it's definitely beyond hype now.

    We've just changed our business model to focus on it. But I think for retailers and fashion brands it opens doors they have only dreamed of up to now. Think about knowing that a customer has just been dumped (relationship status permission update) and being able to send her a discount on a new dress and on and on. This is marketing gold dust it's like ecommerce meets AI...

    http://bit.ly/dLA0jN

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  • Facebook Commerce, as it is might not seem like it is going to be huge, but in the long-term as Aps improve and facebook improves it's integration I think it will be a key driver for the future. http://www.youtube.com/watch?v=2MlW1djomZQ

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  • Hmm, as online marketers and merchants we need to present our products in an appealing way at the right time to the relevant audience... and if they like it they will actually buy it? Interesting :-)

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