Social Shopping Ready for Liftoff
By Tom Ryan
While retailers have been tapping Facebook to show "fans" what’s
new in stores, to hold contests and to post weekly ads, for many, the next
step is building Facebook "stores" that will allow people to shop
without leaving Facebook.
Last week, Procter & Gamble led the way with the launch of a "Shop
Now" e-commerce tab on its Pampers Facebook page, offering consumers a
way to shop without ever leaving the site. The service is powered by Amazon
Webstore, marking Amazon’s first e-commerce storefront on Facebook. In a statement,
P&G said the Pamper’s initiative comes a few months after the brand’s success
with its Facebook pre-sale of Pampers Cruisers with Dry Max, which sold out
its 1000-pack allotment in less than an hour.
"We are so thrilled to have such a dynamic, active community on our Facebook
page, and want to find ways to provide benefits to our most loyal fans," said
Jodi Allen, vice president of North America Baby Care at Procter & Gamble. "Plus,
we are also excited to be the first P&G brand to launch these resources
and are looking forward to rolling this out to other brand Facebook pages in
the future."
Speaking to Dow Jones Newswire last week, Ethan Beard, who runs
Facebook’s developer network, predicted social shopping would surge over the
next twelve months. The article cited a recent survey of 135 leading retailers
and consumer goods manufacturers by research firm Altimeter Group that found
86 percent were preparing to launch some sort of social commerce strategy by
2011.
"Social commerce will be big and disruptive," Mr. Beard said, referring
to the wide range of social media tools and content, such as user profiles,
customer ratings and reviews, user recommendations and wish lists. All hold
the potential to make online shopping a more social experience. Mr. Beard noted
that brands such as Levi Strauss are embedding Facebook’s "Like" button
on its site. Children’s clothing retailer Tea Collection used it this summer
to let shoppers vote on their favorite items, with the winning piece going
on sale the next day.
In August, U.S. internet users spent 41.1 billion minutes on Facebook, surpassing
Google Inc.’s 39.8 billion minutes for the first time, according to comScore.
"It’s inevitable that e-commerce and Facebook will overlap or collide," Scot
Wingo, chief executive of ChannelAdvisor Corp., a software maker that helps
merchants sell goods on Amazon and eBay, told Dow Jones. "Facebook
will be a top-three channel for all retailers within two or three years."
Discussion Questions: How do you think e-commerce will be transformed
by Facebook and other social media platforms?
Facebook and other sites will enable consumers to buy products in more locations. This will boost e-commerce sales as a whole. It’s yet to be seen whether this will revolutionize shopping.
The trend of offering consumers more opportunities to purchase products has been growing for some time. First there were online stores, then manufacturer websites, then custom landing pages, and now social shopping. This is a natural outgrowth of that trend.
I doubt that consumers will take the time to visit multiple manufacturer websites to complete a full shopping list, but social commerce could cut retail shopping lists. This will put more pressure on retailers to make their environments more customer-centric and entertaining.
Commerce that is done directly between consumers and manufacturers should yield a higher margin for manufacturers, allowing them to plow the additional money into promotions and cut shipping costs.
It will take time for social commerce to catch on, and longer for it to greatly impact consumer shopping habits. But it will have an impact.
A recent study showed that 74% of potential customers believed peer recommendations, while only 14% believed traditional advertising. If you step back a bit, Facebook is all about peer recommendations and comments. The traditional web page is, essentially, traditional advertising with a commerce component and (occasionally comments). By adding a commerce component to a site of peer recommendations, the traditional web page is turned upside down and is effectively driven by the customer.
Do I think this is going to be a big trend? How could it not be? Indeed, Facebook could potentially become the e-commerce site.
People are spending so much time on Facebook that it makes total sense for retailers to be there as well. The so-called f-commerce movement is gaining momentum, and soon many retailers will offer a subset of their catalog through Facebook stores.
Historically, shopping has been a social activity. If anything, the idea of a Facebook market is a throwback to the 8th century BC Greek Agora. A place where people can socialize while shopping. It just makes perfect sense in human terms.
I agree that this is big and disruptive. It’s all about bringing shopping to where the customers are. “Location” is not a new concept, however, the concept of real estate is continually being redefined.
I can’t see an end to Facebook’s ubiquity in sight. The company wisely never started charging users (it does try to find way to get “micro-money” via its games and gifts.
In the end, the data the company will have on consumer tastes and preferences will be data currently captured by IRI and the like seem pedestrian. That should make selling on the platform as natural and easy as pie.
Is Facebook TV far behind?
Peer to peer influence is indeed the dominant force in shopping influence. Adding shopping real estate within the Facebook space is going to change the landscape in a direction that shoppers will indeed respond to. When leaders like P&G boldly go forth, other brands will follow. The shopper response will ultimately determine the market potential, and my guess is that it will be bigger sooner than traditional retail might imagine.
It is all about easy and opportunity. The more and easier opportunities to purchase that are offered on any electronic media only generates more sales via e-commerce.
Will it transform e-commerce? No, e-commerce is transforming retail. For every Pampers I can easily order when needed, means one less trip to the brick & mortar store.
Facebook and other social media forms are eons ahead of the curve. Social shopping on these sites means enormous growth and income for the retailers, Now the shoppers have a new version of catalog shopping through the electronic world. My mother who is 98 would be amazed at how much shopping she can do without ever leaving her apartment. Another step toward seriously reducing the brick and mortar footprint.
Just another reason for some kind of regulation. Media selling such as this will be inevitable, but too much and the public will revolt. Companies such as Facebook can try to regulate themselves, but greed always gets in the way. Some some sort of guidelines must be established, and soon.
One more HUGE step in the Convergence of Online, Mobile and Bricks-and-mortar (COMB) retailing. For me it is exciting to see the premier player at retail, Amazon, partnering with the premier brand supplier, P&G, leveraging the most powerful sales force, social, with the leading social online player, Facebook.
Of course Facebook is already a major mobile player, too. What is missing here is Walmart. Whether there is coming some kind of convergence/cooperation between Walmart and Amazon remains to be seen. Amazon is clearly a superior “selling” organization. But Walmart has the leading physical presence globally, the impact of which will not dissipate in the immediate future. One way or another, there WILL be an “Amazonification of Walmart” in the next few years. This move of Amazon onto Facebook simply demands a response/accommodation by Walmart.
Adding e-commerce to a social network, in this case Facebook, makes sense and capitalizes on consumer desire for added convenience. More channels gives the merchant additional opportunity to sell and the social channel combines reviews and referral with an immediate way to capitalize on triggered behavior. I see this trend expanding throughout Facebook and other networks.
When I think of social shopping, I also think of the brick and mortar world. Zavee and Thanks Again offer brick and mortar merchant networks to benefit consumers.
Thanks Again is focusing on the frequent traveler market, having established a presence in airports.
Zavee, which coined the term social shopping, combines the elements of social networks, referral, review and ability to support a charitable cause into one value proposition.
It’s good to include both online and offline activities in anything “social.”
The danger to Facebook is that commercialization will make the target consumer move on if they feel too exploited.
Facebook is a social entity, so business needs to heed past warnings and not make their presence too commercial or “salesy” in nature. The opportunity is there for manufacturers and retailers alike. Perhaps complimentary manufacturers can create fan pages to mimic a retail, a more product-diverse presence.