Retail TouchPoints: J.C. Penney Extends E-Commerce Functionality with New Facebook Application
By Amanda Ferrante
Through a special arrangement, presented here for discussion
is a summary of a current article from the Retail TouchPoints website.
J.C.
Penney announced last week that customers will be able to purchase items directly
from its Facebook fan page, without having to click through to jcpenney.com.
While
retailers have been capitalizing on the thriving communities within Facebook
and Twitter for customer engagement, Penney is among the first to dabble in
directly linking Facebook to sales. In July 2009, 1-800-Flowers.com earned
credit for becoming the first retailer to launch a Facebook storefront, although
it wasn’t until February 2010 that consumers could purchase items directly
from its news feed (the community aspect of the page) without leaving the page.
Penney’s
new integration will support a full e-commerce experience within the retailer’s
Facebook page, including add-to-cart and checkout, among other key functionalities.
By utilizing the "Shop" tab on Penney’s
Facebook page, users can search all products currently included in Penney’s
product pages. Shoppers also can "Like" and share items and purchases
with their friends within the community.
Industry analysts agree that social
media usage is closely correlated to shopping.
"Social media is impacting retail buying patterns year-over-year," said
Chris Brogan, president, Human Business Works, an online education and community
company for small businesses and solo entrepreneurs. "As each year progresses,
the percentage of people who say they made buying decisions based on conversations
via social networks keeps growing. Whether you’re ready to participate, your
customers are already doing so."
While small- to mid-sized retailers have
leveraged technologies like Ecwid, Milyoni and Payvment to drive purchases
within their Facebook pages, Penney is one of the first leading retailers to
leverage a fully functional Facebook storefront.
"Retail is no longer about just getting a customer to walk into a physical
location," said Lori Schafer, executive advisor to SAS Retail and co-author
of ‘Branded! How Retailers Engage Consumers with Social Media and Mobility.’
"It’s about being wherever that customer is. You’ve got to bring your store
to where that customer likes to spend time. The biggest benefits come from
cross-channel engagement — reaching consumers wherever they are spending
their time so that they can find the products and services they specifically
want."
"With over 1.3 million friends and growing, our Facebook page remains
a vital tool for engaging our customers as they explore and share the JCPenney
brand," said Tom Nealon, group EVP, Penney, in a press announcement. "By
introducing commerce capability, we are able to take our Facebook experience
to the next level, providing convenient features that encourage social integration
and user contribution as our customers shop."
Discussion Questions: What’s the likelihood that Facebook will soon become
known more as a direct selling tool for retailers rather than a marketing
tool? What challenges does the social network tool face as an e-commerce
medium?
Selling on Facebook where you have a million likes certainly seems to make sense–going where the customers are–however, I think the real innovation will be new and interesting ways to sell/shop. Using what you can learn about an individual via their Facebook profile (combined with other sources) and how you can use that information–recommendations, promotions, and social shopping. There is quite a bit of innovation from 3rd parties on the social shopping dimension and more and more of these capabilities will be making their way to Facebook along with more and more retailers.
This is a natural evolution in e-commerce. Earlier studies showed that a large majority of individuals will purchase based on peer reviews while only 14% trusted “traditional” advertising. Adding sales functionality to a place where peers talk to each other about products is a natural. It is proactive selling vs. reactive selling on the web site.
I think this is a trend that will grow and grow.
It’s really clear to me that Facebook and Facebook market have the potential to become one of, if not the largest online marketplaces in the world. I don’t think I’m alone when I say that I think Facebook is obviously going to be gunning for Amazon, eBay, and anyone else in the online space.
The only real challenge that I see is that the market will become extremely crowded very quickly (being on Facebook won’t be novel) and retailers eventually will look for ways to once again differentiate and create distinct experiences. This may inevitably lead many to leave Facebook and establish private branded communities, where they can create a deeper more compelling user experience. Perhaps by that time the “new Facebook” will have come along.
J.C. Penney’s e-commece functionality via Facebook is a sign of what’s to come in the next generation of online purchasing.
Selling directly on Facebook will inevitably become the norm; JCPenney is the largest retailer to offer direct retail sales to date but not the first (mostly smaller specialty retailers have been pioneering in this space for the past year or so). Also, full-fledged m-commerce will soon become a standard as well. I could also foresee direct selling via Twitter (in terms of things like flash sales on specific items, Twitter doesn’t lend itself to full-scale retailing like Facebook does).
When I read that JCP had directly linked their entire catalog to their Facebook fan page I thought, “So what?”
Is it important to be where your customers are? Absolutely. But I think simply giving access to something that is already available online without any kind of a twist beyond liking and sharing, is a waste. Facebook is where we go to connect and contribute. Retailers who participate should make the effort to join the conversation in a meaningful way or they will miss the point and the benefits entirely.
Wherever there is a crowd, there will be commerce. Facebook offers an excellent opportunity for e-commerce. The same maxims apply in order to be successful:
– Keep the ordering process simple
– Don’t ask consumers to click too many times
– Make it easy to checkout
– Back the process with excellent customer service.
Look for more e-retailers to utilize Facebook to generate direct sales in the coming months.
Several have hit on this. Facebook is about friends, connecting and sharing–not shopping. As a Facebook user the only way I would buy on FB is if it were an opportunity to buy something I wanted well ahead of a national launch or an item being tested on FB and FB was the only place to get it at that time.
After 40 years of observation I feel I am on very safe ground saying “Where J.C. Penny’s leads, nobody follows.”
Remember the internet bubble of 99/2000 where everything you could do in life (and some things you never knew you needed), you would now do on the web? Not because it made sense but because you could. Facebook is in danger of becoming a new bubble. While this may be a bold prediction, I don’t think it will last. Facebook is a rather closed eco-system that is much smaller than the whole of the web. Closed-loop companies have historically always faded, eventually.
Social is important but social is again just one facet of the current and future web. So while I think some of these initiatives will have short-term success, I would be hesitant of gambling too much on Facebook itself as a go-forward platform. The pendulum will swing, it always does, and you don’t want to be left behind when it does. I don’t think any brand should neglect its own e-commerce site and efforts.
This is great news. Penney’s is moved into the 21st century and with some work will no doubt reap the rewards. The next step is to invite the “Facebook” base to visit and ask the customer for ideas and support. There will no doubt be many negative replies from the ignorant and the competition but honest positive comments will be very valuable. E-commerce is not the future, it is now. Corporations desiring to succeed will be in front of and throughout wherever the legitimate and legal activity is. If Wilmington, Ohio can use it to grow, everybody can and should.
“…customers will be able to purchase items directly from its Facebook fan page, without having to click through to jcpenney.com.”
One small step for man, one even smaller step for mankind.
(My comment about Penney’s is slightly off topic). I would like to see Penney’s embrace P.O.S. discounts and ad flyers the way Kohl’s does. I think they need to step up their circulars and embrace the high-low-price-game business model.
Kohl’s success is probably more due to weekly circular promotions than to any exclusive celebrity fashion line or “shopping experience.”
Facebook could certainly help, and definitely would not hurt Penney’s business.
If Facebook becomes a marketing/sales tool; what will people use to tell their immediate world what they had for breakfast or what time they got up in the morning?
More retailers are bound to follow JCP’s lead. That’s not a bad thing. Social media’s big opportunity is in creating deeper relationships with consumers. That can be done while still selling to the consumer, e.g., apps that scan a consumer’s Facebook page and then make product and/or gift recommendations. But if social media is used to simply sell more stuff to consumers, then there’s no value add. Selling via Facebook will be a growing part of retail. But brands need to bring something more to the social media space vs. what’s already on the brand’s web site.
Sorry, Mike Tesler, but I think people do follow the lead of JCPenney.
Penney was the first retailer to put its entire catalog online, unlike some retailers who think that a brochure site is adequate.) Penney has pioneered a number of online features that we now take for granted. So whether or not this move seems smart, JCP will have gone there where few have gone before. Kudos.