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150 Million Facebook
Users Will Purchase
Something On a Brand’s
Fan Page This Year.
How many will buy
from you?
Want to get your piece of retail sales spent on
Facebook? Complete the following form to learn
how to get revenue from your brand’s Facebook
page without alienating your community.
Retail sales on
Facebook in 2011 will
be $100 million, what
portion of that will be
spent with your brand?
Want to get your piece of retail sales spent on
Facebook? Complete the following form to learn
how to get revenue from your brand’s Facebook
page without alienating your community.
A Retailers Guide to
F-Commerce
  Selling to People Where They Are
  Anyway – On Facebook!
A Retailers Guide to F-Commerce: Selling to People Where They Are Anyway–On Facebook!




                      About this whitepaper
                       The content is protected by copyright and cannot be
                       duplicated without permission from Zmags Inc., 320
                       Congress Street, Boston, MA 02210, USA.

                       The author or any other advisors distributing this guide can
                       under no circumstances be held responsible for any damage
                       or business impact from taking advice from this whitepaper.

                       For any questions regarding this whitepaper, please email
                       Peter Velikin, VP of Marketing at pvelikin@zmags.com

                       Published May 2011 © all rights reserved




2
The Fusing of Content
Introduction

               and Commerce
               As the Internet continues to          to evolve with it. These firms
               evolve at a rapid pace, so do the     have been diligent in building
               opportunities that brands and         active social media communities,
               retailers have available to them      and now want to turn those
               to increase their online revenue      communities into revenue
               and brand engagement. Now that        streams. The key to achieving
               social media networks, such as        this objective is to make your
               Facebook, LinkedIn, Twitter—and       products and services available
               countless others—are attracting       for purchase directly from
               millions of users on a daily basis,   the Facebook platform while
               all retailers and brands are          consumers are highly engaged.
               looking for ways to turn these        The question then becomes,
               social interaction tools into a       “Which Facebook commerce
               way to make money. Already,           solution will best help me meet
               some of the biggest brands in         and exceed my objectives?
               the world are harnessing the
                                                     In this paper, we will discuss:
               power of social media to increase
               their sales. This phenomenon          •    Why Facebook can be a
               is being defined as Social                 highly effective platform
               Commerce.                                  for selling your products
                                                          and services, if approached
               With the rapid pace of the
                                                          correctly.
               Internet and the growth of
                                                     •    How you can apply proven
               Facebook—and not just
                                                          solutions to turn your
               participating network members,
                                                          Facebook community into a
               but also the evolution of the
                                                          revenue stream.
               capabilities made available in
               the network—leading retailers
               and brands are being compelled


                                                                                        3
A Retailers Guide to F-Commerce: Selling to People Where They Are Anyway–On Facebook!



                      Facebook: The Social
                      Media Network Leader
                       “In three to five years, 10 percent to 15 percent of total
                       consumer spending in developed countries may go through
                       sites such as Facebook.” Mike Fauscette, Analyst, IDC
                       Consulting

                       “It’s a matter of time—within the next five or so years—before
                       more business will be done on Facebook than Amazon.”
                       Sumeet Jain, Principal, CMEA Capital

                       With 1 out of 11 people on Facebook, and with the total
                       number of daily users surpassing 600 million, Facebook is
                       now the undisputed leader in social networks.

                       Social media networks, like Facebook, have long been offering
                       retailers and brands the option to drive traffic to their own
                       e-commerce sites by enabling them to link from their pages to
                       other sites and content. Paid ads, ‘like’ button plug-ins, and
                       custom apps have all been made available by the network for
                       brands to leverage. In recent months, the actions and changes
                       made by the social network leader (e.g., Facebook Deals,
                       Facebook Credits, Facebook ‘Send’, etc.) validate Facebook’s
                       recognition of the rapid growth of their network, coupled with
                       the growth of e-commerce. Consequently, Facebook is now
                       encouraging brands and retailers to leverage their community
                       to build supporting revenue channels.

                       The availability and likability of social networks has
                       introduced a change in the buyer/seller relationship in recent
                       years, such that the consumer is now in control. With access



4
to user reviews, recommendations and other insightful
information available online, your buyers now have more
data about your products than you do as the seller. Since
consumers are spending so much of their time (1 out of every
8 minutes) on social media networks, it’s imperative that
brands strongly consider establishing a presence on social
media networks, and support customers who wish to conduct
purchase transactions on these social media outlets.

Consider this: You, as a retailer and brand owner, have already
recognized the power of this network when you decided to
add ‘Like’ or ‘Share’ buttons to your product and solutions
pages. Connecting a recommendation or product validation
            to additional information and ability to transact
            is a natural evolution in this connection between
            e-commerce and social networks. It then makes
            sense that Facebook would introduce the tools for
            brands and retailers to use the Facebook platform
            as a selling platform.

           These statements drive home the point that
           f-commerce, retail enhanced by the use of
           Facebook, is the new online selling avenue in the
here and now, and will continue to be for the foreseeable
future.

The top three brands on Facebook, based on ratings derived
directly from the fans of the brands, include Coca-Cola® (24m
fans), Starbucks® (20m fans) and Disney® (19m fans). While
each brand sells different products and services, they have
each evolved their presence on Facebook to provide their
consumers with both meaningful content and the opportunity
to transact.



                                                                  5
A Retailers Guide to F-Commerce: Selling to People Where They Are Anyway–On Facebook!


                       Since these top three brands all “sell” on Facebook, they all
                       engage in f-commerce. Here’s how:

                       •    Coca-Cola sells branded products directly from its
                            Facebook page. Facebook users can buy branded items,
                            including clocks, sun visors, salt and pepper shakers,
                            popcorn bowls and other merchandise emblazoned with
                            the Coca-Cola brand.
                       •    Starbucks focuses its f-commerce efforts on its
                            current customers, so it engages in a loyalty strategy,
                            where Starbucks card holders can manage their My
                            Starbucks Rewards cards on Facebook. In short, it’s an
                            e-commerce-enabled customer retention management
                            (CRM) strategy. Starbucks Fans on Facebook have a
                            variety of options to demonstrate their loyalty. They
                            can buy and give a gift card to someone else, or load
                            more money onto a current Starbucks card, or check the
                            current balance on a card, or check the current loyalty
                            rewards status level, or cash-in rewards points for prizes
                            and Starbucks merchandise.
                       •    Disney sells tickets to current Disney movies in
                            theaters, directly from its Facebook Store (f-store).
                            Users can pick the movie they want to see, invite
                            friends to join them, and choose the date and time—all
                            without ever leaving the comfort of their Facebook page.
                            (Payment processing for the Disney f-commerce store is
                            handled by Fandango.)

                       Each of these brands is using Facebook in its own way to
                       reach and convince consumers to shop where they are
                       already connected to the products—on Facebook.




6
Keeping It in the Family:
The Case for Selling on
Facebook
Step back for a moment and think about the power of
Facebook from a logical point of view. Facebook is a business.
While it is selling itself as a “social” business, it is also a
booming business on its own. Similar to any business model
that is based on attracting visitors, the intent is to keep their
users engaged and interacting.

To encourage this, Facebook has created tools, applications,
games and a myriad of other ways that enable users to
communicate with each other, conduct business, and even
shop without ever having to leave Facebook. Essentially,
Facebook is a platform that other brands can use to attract
and engage shoppers where they are already electing to
spend their time.




                                                                    7
A Retailers Guide to F-Commerce: Selling to People Where They Are Anyway–On Facebook!
are on Facebook
57.1% of internet users
                            The proof is in the numbers:

                             •   According to Forrester Research and Shop.org, the
                                 conversion rates of an f-commerce store are just as
                                 high as a store from the brand or retailer’s website.
                                 Conversion rates for an f-commerce store are 2-4%,
                                 while a web store averages 3.4%.
                             •   Click-through rates on Facebook walls are 6.5%
                             •   Wetseal, for example, says that 20% of its e-commerce
                                 sales come from Facebook
                             •   1 in 11 people are on Facebook, which is 642,613,700
                                 users and growing
                             •   700 billion minutes are spent on Facebook on a monthly
                                 basis
                             •   57.1% of Internet users are on Facebook

                            These are just some of the figures that illustrate the power
                            of Facebook. These are but a few of the numbers that reveal
                            customers and prospective customers not only are on
                            Facebook, but are spending increasing amounts sharing and
                            shopping while there. In essence, this means that, to get
                            your products in front of new customers and prospects, your
                            products have to be on Facebook too.




                          642,613,700
                          Facebook users
8
Social Shopping
By nature, people are social. Not only are
people using Facebook to share pictures
and updates with friends, but they are also
shopping with friends and getting their
advice and opinions on what products
to buy. The old-school method of asking
friends and family members which product they recommend has
been replaced by the Facebook “like”. It’s happening everyday
and it’s happening with or without you, so you need to seriously
consider adding social commerce to your multi-channel web
strategy. Still have doubts? Take a look at these numbers:

•    75% of Facebook users have “liked” a brand
•    Facebook users share over 30 billion pieces of content on a
     monthly basis
•    The average Facebook user creates 90 pieces of content
     per month

The long and short of it is that social media has a tremendous
impact on shopping behavior. The fact is a referral from a
network connection has been found to be one of the most
influential drivers of purchase intent.

When you add consumer mobility to the equation, it further
increases the need for retailers and brands to be selling on
Facebook. More and more consumers are using their mobile
devices (smart phones and tablets) to access Facebook on a
more regular basis. As that trend continues to rapidly increase,
selling on Facebook allows brands to reach consumers in
their social environment and on the go. Instead of asking your
consumers to come to you, you’re now interacting with them on
their terms.


                                                                   9
A Retailers Guide to F-Commerce: Selling to People Where They Are Anyway–On Facebook!



No Need to Reinvent the you don’t have to spend
         The great news for brands is that
                                           Wheel
                       valuable time coming up with a super unique way to leverage
                       the social shopping phenomenon. That’s because Facebook
                       already ‘gets it’ and Facebook is making it easy for you to sell
                       where people are shopping. Here’s how:

                       •    Facebook already combines visual content with
                            experience, which engages users and drives them to
                            interact with each other.
                       •    Facebook is primarily driven by visual content,
                            specifically pictures. And, as we all know, visual content
                            is core to effective merchandising.
                       •    Facebook combines the personal experience of
                            shopping, which a brand’s website cannot offer
                            shoppers directly (unless they leverage the power of
                            Facebook or allow product reviews on their own site).
                       •    Facebook users are receptive to using the platform to
                            shop because it is interactive.

                       Progressive retailers and brands have been diligent in
                       establishing communities of target consumers on Facebook.
                       Enabling f-commerce capabilities allows these loyal, engaged
                       target consumers to both have a dialogue and transact with
                       you, and then spread the news of that purchase through their
                       networks.

                       When you employ the ability to conduct commerce on
                       Facebook and offer shopping applications to the users of
                       Facebook, you are providing the platform for communication
                       and leading them from having these conversations to taking
                       action.



10
Creating an Exciting
                 Online Experience Is Key
                 to Success
                 When you think about in-store shopping behavior, you
                 realize that an exciting shopping experience is critical to
                 success. When you merchandise the store carefully, play
                    the right music, have the right fragrances, and provide
                    knowledgeable sales people that engage with consumers,
                    you have created a retail experience that will keep
                    customers in the store longer and ensure higher purchase
                    intent levels. Today, you have to transfer this competency
                    to Facebook.

                    In other words, you have to learn how to create a carefully
                    merchandised shopping experience on your Facebook
                    page. The majority of the ingredients you need for the
                    recipe already exist within Facebook. You do, however,
                 have to take the steps necessary to get it up and running for
                 your own brand. Here are the necessary steps, along with
                 valuable tips on successful execution of each solution:

INTERACTION: The primary ingredient to a successful consumer-brand
                 relationship is interaction. This is as true in an f-commerce
                 situation as it is with an offline one. On Facebook, retailers
                 and brands are interacting with an organic community of
                 loyal brand fans. And, just as you have to stay connected with
                 your audience in other marketing strategies, it’s critical that
                 you interact with them frequently and with exclusive insider
                 information to keep this community engaged and growing.




                                                                                   11
A Retailers Guide to F-Commerce: Selling to People Where They Are Anyway–On Facebook!


                      Tip for Interaction: Turn your Facebook community into an
                      elite group of lead users. To build a loyal following, companies
                      have to interact and engage with Facebook users and fans
                      on a regular basis and make them feel as if they are part of
                      the company. This group should receive preferred offers on
                      new products and services, and be invited to function as an
                      incubator for feedback on new product concepts.

     FOLLOWING: Interaction between your brand and Facebook users creates
                      a following. It builds up a group of individual consumers or
                      potential customers that have an interest in your brand. The
                      more people that have an interest in your brand, the better
                      the chances you have to convert these followers into paying
                      customers, for the first time and on a repeat basis. Providing
                      Facebook users with the right mix of content on a consistent
                      basis is what builds up this following.

                      Keep in mind, too, that the average Facebook user has 130
                      “friends” on Facebook. This means that when you interact

      Like            with the user or the user interacts with your brand or
                      retail store, it also exposes the brand to an average of 130
                      additional people.

                      Tip for Creating a Following: Build a following on Facebook
                      with the content and information you share. Once you have a
                      large, high-quality group of followers, you can then offer them
                      the opportunity to buy directly from you on Facebook. The
                      reason you want to build your following and then introduce
                      f-commerce on the Facebook platform is that brands that
                      have a following on Facebook, and then choose to conduct
                      commerce on the platform, see benefits more rapidly than
                      those that are still in the process of building a following.




12
FAMILIARITY: Humans tend to steer clear of the unknown. Even when we
                 shop, we tend to gravitate to the stores we know. When we’re
                 shopping in these stores, we tend to be attracted to the
                 brands we are familiar with.

                 Tip for Familiarity: Facebook allows brands to move the
                 familiarity of the brand from the offline world to the online
                 world. Not only is the consumer familiar with your brand, but
                 they are also very familiar with using Facebook, and they are
                 comfortable in conducting various types of transactions on
                 Facebook. This includes communicating with other users and
                 with brands. It also includes making purchases directly from
                 the brands and retailers that offer some kind of f-commerce
                 option.

                 When it comes to familiarity, Facebook also endorses a
                 casual relationship between brands and shoppers. The
                 Facebook community is really a place where brands and
                 retailers can “let their hair down” and have some fun. Some
                 brands and retailers reveal the human side of their business
                 by sharing pictures of their employees. Others engage “fans”
                 by hosting fun or silly contests—all of which helps the fans
                 become more familiar with the brand on a personal level,
                 and makes shoppers feel more comfortable and personally
                 involved with the brand.




                                                                                 13
A Retailers Guide to F-Commerce: Selling to People Where They Are Anyway–On Facebook!


MERCHANDISING:         As a retailer or consumer brand, you are highly skilled at both
                       in-store merchandising and catalog merchandising. You know
                       how to lay out the store, or design the catalog, to maximize
                       purchases according to shopper behavior.

                       Tip for Merchandising: Use this same level of merchandising
                       knowledge combined with online data and apply it to
                        f-commerce. You can create a customized online shopping
                         experience that replicates the carefully merchandised in-
                         store and catalog experiences, but is highly optimized for
                          performance based on analytics. Within this experience,
                          use beautiful imagery, as well as rich media, to bring the
                           company and its products and services to life.




14
Expectations of the
Facebook Consumer
The key to leveraging the power of f-commerce is creating
an innovative experience for Facebook users. Facebook
users expect brands and retailers to deliver an experience
that makes them feel comfortable and is properly suited for
the social platform, yet conveys the look and feel the brand
represents.

The expectations of consumers are different on Facebook vs.
the retailer’s direct site, regarding what they want and expect
the brand to deliver, in addition to how the information
should be presented. For example, Facebook users are
looking to receive exclusive offers or be the first to know
about new products before they become available to the
general public.

Traditional ‘flat’ product images, often seen in online stores,
are not effective in the social media network. Again, the
expectations of this network audience is highly connected
by content, so you need to consider incorporating videos,
high-res graphics, or even real-life models wearing the
clothes of the brand or retail store, so as to capture and
keep the attention of users on Facebook. One of the ways to
enable Facebook commerce—we’ll talk more about later—is
to offer your products right on your Facebook page. Your
presentation of these products and your merchandising
techniques will need to be modified to suit both the platform
and the expectations of your shoppers. F-commerce is about
more than simply reproducing your traditional print catalog
or e-commerce store and pasting it into Facebook. Catalogs



                                                                  15
A Retailers Guide to F-Commerce: Selling to People Where They Are Anyway–On Facebook!


                       or presentations should be built and designed based on
                       merchandising techniques—which is the best way to expose
                       brands and products. By using online analytics, retailers and
                       brand manufacturers can accurately create content for the
                       f-commerce store that is based on user preferences.

                       F-commerce is the wave of the future, too, with the use of
                       mobile and app-based platforms. Some experts see Facebook
                       as the Operating System (OS) of the future.

                       •    More than 200 million Facebook users access Facebook
                            with their mobile devices—smartphones and tablets
                       •    Facebook users accessing the social network with
                            mobile devices are twice as active on Facebook than PC
                            users accessing Facebook
                       •    94% of phone users communicate on social networks
                            using their mobile phones
                       •    50% of mobile Internet traffic is for accessing Facebook
                            and other social networks
                       •    70% of Facebook users use Facebook applications
                       •    550,000 applications are currently active on Facebook
                       •    44% of retailers plan to use Facebook applications in
                            place of microsites for product launches and promotions




16
200 MILLION
mobile Facebook
users
» using 550,000 apps
» consuming 50% of
  mobile internet traffic




                       17
A Retailers Guide to F-Commerce: Selling to People Where They Are Anyway–On Facebook!



                  3 Ways for Brands to
                  Harness the Power of
                  F-commerce
                   Now that you have a deeper understanding of the opportunity
                   that f-commerce holds for your company, it’s time to get down
                   to the solutions available to make it happen. Generally, brands
                   and retailers have three primary options for using its Facebook
                   presence to create an f-commerce opportunity:

                   1.   The Facebook Mall
                   2.   On-site Redirect
                   3.   Interactive Catalog


                  1. The Facebook Mall
                   The Facebook Mall works similar to a brick and mortar shopping
                   mall. Facebook has partnered with Payvment to allow Facebook
                   pages to create a “storefront” tab on a brand’s Facebook page.
                   This allows retailers and brands to display their products for sale
                   and allows Facebook users to shop from Facebook, add items to
                   their shopping cart, and check out. The added bonus for Facebook
                   users and shoppers is that they are not limited to just shopping
                   for your products, but instead have the ability to add products
                   from different merchants to their shopping carts and check out
                   with one seamless process.

                   Since people want to stay in Facebook while conducting their
                   purchasing transactions, using the Facebook Mall allows brands
                   and retailers to control merchandising on the brand’s Facebook
                   page. You own the content and your page, but you have support
                   promoting it to the millions of Facebook users via the public Mall.


18
Pros and Cons

Product Exposure. The Facebook Mall can work for and against
retailers and brands. Since it is a “mall” environment, it essentially is
a warehouse of goods. Therefore, you don’t control how your products
are presented to consumers. The potential exposure can be valuable,
but it can also put your identical products in direct competition with
other companies selling the same or similar products.

Facebook Presence. Getting your products in The Facebook Mall can,
of course, work for companies that don’t have a strong Facebook
presence. It’s a fast, cost-effective way to test how your products will
sell within your Facebook community members, and also allow you to
extend your reach to non-members.

Social Shopping. Another feature to consider is the social shopping
aspect that Payvment brings to the shopping experience in The
Facebook Mall. In addition to making multiple products available
for shopping and checking out at one time, Payvment also allows
fellow Facebook friends to see what friends are buying, “liking” or
reviewing.

So, if you add in item in your shopping cart, it also appears in your
newsfeed. You can then make a comment on your purchase for others
to see. In turn, friends can also leave their own comments or comment
back on the items that you have purchased.

If you want to deliver memorable, highly curated
shopping experiences, the Facebook Mall is not for
you. However, if you’re a new business that is simply
trying to drive awareness of your products, this
could be an effective solution.




                                                                            19
A Retailers Guide to F-Commerce: Selling to People Where They Are Anyway–On Facebook!




                      2. On-site Redirect
                      The second primary option for displaying your products and
                      services on Facebook is with an on-site redirect. This option
                      allows you to display your products on a custom tab on the
                      brand or retailer’s Facebook page. When visitors to the page
                      click on the product, it sends them to the e-commerce store
                      that sits on your website to complete the transaction, taking
                      them out of the world of Facebook.

                      So, what happens here is that one of the tabs on your
                      Facebook page is labeled “products” or “shopping” or
                      “shop.” You can embed images of each of your products in
                      the tab and even display some information, such as a product
                      description and price. Facebook shoppers can click on the
                      image of the product to obtain more information or to make
                      a purchase. Instead of the transaction taking place within
                      Facebook, however, the shopper is re-directed to your website
                      e-commerce store so the transaction can be complete.

                      In essence, your presence on Facebook acts like a link
                      directory where you are positioning your company and
                      information to consumers in places where they will find you in
                      order to drive them back to your site.

                      Pros and Cons

                      Establish a Facebook Presence. Using the on-site redirect
                      option has its advantages and disadvantages. The primary
                      benefit is that it allows brands and retailers to enable
                      commerce on Facebook. It gets your products in front of
                      shoppers. Since the Facebook option redirects or sends the
                      visitors back to the website of the brand or retail store, it
                      works as a traffic driver.


20
Disconnected Experience for Consumer. The primary
disadvantage is that it creates a disconnected experience
because it requires consumers to leave Facebook to complete
the transaction. While a percentage of your consumers will
ultimately feel more comfortable visiting your site directly
to complete the transaction, you risk alienating those that
wish to stay within their favorite social network to complete
the entire consumer journey from awareness to transaction.
Therefore, it may not be the most beneficial option in creating
the Facebook experience that users seek. Once they see that
they are being sent to your website, they may close your site
and simply return back to Facebook. Others, however, may
continue with the transaction. The goal is to satisfy both, so
you need to strongly consider how much of this market you
wish to capture before you choose this option solely.

Technology Risk. There is also some infrastructure risk
associated with using onsite re-direct to promote your
products. Facebook, as it has been known to do, could make
changes to your ability to use this option. For example,
Facebook recently removed FBML script from the site to
migrate everything over to iFrames. Consider the implications
if they were to remove the products or shopping tab
altogether! In short, this puts your brand at risk and leaves
it at the mercy of Facebook, which means you lose some
control. It’s completely unpredictable.




                     »
                                                                  21
A Retailers Guide to F-Commerce: Selling to People Where They Are Anyway–On Facebook!



                      3. Interactive Catalog
                       The catalog shopping experience has evolved with
                       technology. Now, you have the ability to embed an interactive
                       catalog into a tab on your Facebook page and conduct
                       commerce within it. Just as consumers would flip through a
                       print catalog, they can “flip” through the interactive shopping
                       experience that combines the rich media content that
                       Facebook users consume with the ability to transact without
                       leaving the catalog. Companies can leverage this option to
                       satisfy shoppers who wish to complete the entire process
                       within the social network, and provide the ability to navigate
                       to their ecommerce website for those that do not.

                       Pros and Cons

                       Facebook Navigation. The primary advantage of the
                       interactive catalog is that it allows companies to create an
                       online experience that integrates compelling content with
                       the opportunity to transact. Consumers can engage with your
                       content, click on products, and add items to their shopping
                       cart without ever leaving Facebook. Combining the familiarity




22
of their social network with the proven format of a linear, rich
media experience, this option truly supports users who wish
to navigate Facebook and stay in the application to complete
conversions.

Capture Impulse Purchases. Another advantage of the
interactive catalog is that it allows retailers and brands to
capture impulse purchases because of the high levels of
customer engagement. The combination of validation of a
network connection’s ‘like’ and the compelling content you
present to potential shoppers to encourage the sales, cause
consumers to stay longer and buy more, without interruption.

Technology Challenges. There are some technology
challenges associated with this option. First, you have to
have an interactive catalog to embed into Facebook. An
interactive catalog is not a PDF file of your product catalog.
It’s a virtual catalog that combines the look and feel of a real
catalog with online shopping cart capabilities. Rather than
a flat look and feel, an interactive catalog creates a truly
merchandised presentation of your products that pulls the
shopper in and moves them through the catalog.

In order to truly monetize your Facebook presence, it’s not
simply a “build it and they will come” mentality when it
comes to successfully selling from the Facebook platform.
While these consumers have elected to engage with your
company, what and how you offer them to purchase will
determine your success.




                                                                   23
A Retailers Guide to F-Commerce: Selling to People Where They Are Anyway–On Facebook!



Social Commerce Tips
from the Pros
                       In order to cut through the mountains of information on
                       the topic, here are some of the best practices from social
                       commerce thought leaders:

                       •    According to Angie Schottmuller from ClickZ, it’s wise
                            to offer exclusive content on Facebook. Create a special
                            offer or special shopping experience to Facebook
     Facebook               followers or those who are willing to “like” your brand
              E!
     EXCLUSIV               or retail store on Facebook. The ‘exclusive’ may be the
                            inside scoop, an exclusive deal, or products that are
                            available to FB users prior to the rest of the world.
                       •    Jason Taylor from Usablenet says that retailers and
                            brands should support easy and secure e-commerce, so
                            that the “shop from Facebook” experience is positive
                            when associated with your brand.
                       •    Ruth Mortimer from Adage encourages brands and
                            retailers to leverage f-commerce as a way to provide
                            instant gratification.
                       •    Jake Hird from Econsultancy warns that it’s not about
                            choosing between e-commerce and f-commerce; it
                            should in fact be both that you are using to promote
                            your brand and its products.
                       •    Brian Solis from E-Commerce to F-Commerce says not
                            to replace e-commerce with f-commerce, but to use
                            both. F-commerce reaches the social consumer, while
                            e-commerce reaches and fulfills the needs of your
                            traditional consumers.




24
Don’t replace
e-commerce
with f-commerce
—USE BOTH
F-commerce reaches the social
consumer, while e-commerce
reaches and fulfills the needs of
your traditional consumers




                                    25
A Retailers Guide to F-Commerce: Selling to People Where They Are Anyway–On Facebook!



                      Conclusion
                       So, there you have it. We hope this paper provided you with
                       the foundation to understand the opportunity presented by
                       monetizing your Facebook community. However, you also see
                       the need to approach this strategically, as the last thing you
                       want to do is alienate this vital community by turning their
                       social experience into a sales experience.

                       You also know now that you have options in how you present
                       and sell your products on Facebook. Now that you have all
                       this information on this topic, it is up to you to evaluate
                       which option provides the most benefits to you, your
                       prospects and your customers.




26
To recap:

•    The Facebook Mall allows you to extend the reach of
     your products beyond your fan base, but puts you at risk
     of a highly competitive marketplace.
•    Using Facebook as a traffic driver to your ecommerce
     site will ultimately help improve your web traffic and
     may lead to conversions, but you are not reaching
     consumers that wish to transact within Facebook itself.
•    Interactive catalogs allow you to present your company
     in a rich, dynamic manner, enabling the consumer to
     transact directly from within the catalog, but achieving
     this solution will require you to devote additional
     resources to design and implement your online catalog.

Regardless of the option that suits your needs best, as a
company seeking to increase revenue, you need to seriously
consider a multi-channel strategy in reaching today’s
consumer and one of those channels should be Facebook.
Remember, as a retailer or brand, you are no longer in control
of where the consumer shops or finds you. The primary
way to reach them is to put your products in places where
shoppers are most likely to find them. Because of its size
and potential impact on brands, Facebook has defined
the role “social commerce” plays when it comes to online
transactions.

Leveraging Facebook permits your brand or retail store to
play a role in social commerce—one that just may help you
reach a 3.4% conversion rate from your f-commerce store;
obtain a 6.5% click-through rate on your Facebook wall;
reach 642,613,700 Facebook users and 57.1% of the Internet
users that are on Facebook. How powerful would that be for
your sales?


                                                                 27
A Retailers Guide to F-Commerce: Selling to People Where They Are Anyway–On Facebook!




     Want to get your piece of retail sales spent on
     Facebook? Complete the following form to learn
     how to get revenue from your brand’s Facebook
     page without alienating your community.




30
A Retailers Guide to F-Commerce: Selling to People Where They Are Anyway–On Facebook!



                                   Are You Ready for
                                   Facebook Commerce?
                                   8th Bridge, a Facebook e-commerce software
                                   company, forecasts retail sales on Facebook in 2011
                                   will be IRO $100 million

                   Facebook’s referral traffic to Amazon grew 328% year over year in
                   Oct. 2010, while Google’s traffic dropped 2%. Facebook traffic to
                   eBay grew 81% while Google traffic dropped 3%.

                   According to 8th Bridge, people are 18 times more likely to buy
                   directly in their News Feed than when clicking off to a separate
                   website

                            Progressive brands and retailers are taking notice that their
                            consumers are spending their time on social networks.
                            Zmags enables you to reach your community and share an
                            enriched experience that not only engages them with your
                            content and products but inspires them to convert without
                            alienating them and making the transaction feel forced.

                    •   Easily publish online content to Facebook using a custom app
                        located on your brand’s fan page and Zmags
                    •   Track engagement and conversion from your Facebook catalog
                        to capture product performance data and overall conversions
                        with your community
                    •   Deliver a fully merchandised, interactive experience to your
                        fans that encourages conversions without disrupting the
                        social nature of the network




28
Over 3000 brands use Zmags to deliver rich, interactive
content to their audiences.

Click on any of these brands to see how they are using Zmags
Facebook enhancement to connect their content to their
community.




       Cascio Music
                                        Great Valley
                                        Publishing




                                          MyTown
          NAVC




    District of Saanich            University of Colorado
                                          Boulder


                                                            29
A Retailers Guide to F-Commerce: Selling to People Where They Are Anyway–On Facebook!




     Online catalogs capture attention.
       When compared to navigation on HTML product pages, consumers stay
       longer in a catalog format and put more items in their cart.



     Online catalogs fit in with your
     mobile strategy.
       Because Zmags is fully optimized for all devices, you have the ability to
       create 1 catalog that is cross-channel. Brands have also added their Zmags
       catalog to mobile apps and double the number of visitors.




     Online catalogs provide consumer
     behavior and product performance
     analytics.
       Literally the only advantage you have online is the analytics. Using Zmags,
       track how consumers use your catalog to drive offline merchandising
       decisions.




30
A Retailers Guide to F-Commerce: Selling to People Where They Are Anyway–On Facebook!




     Over
     2500 brands
     use Zmags
     to increase
     engagement and
     conversions.
     Get started today!




30
Over
2500 brands
use Zmags
to increase
engagement and
conversions.
Get started today!




                     31
A Retailers Guide to F-Commerce: Selling to People Where They Are Anyway–On Facebook!




30
31

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A Retailer's Guide to Facebook Commerce

  • 1. 150 Million Facebook Users Will Purchase Something On a Brand’s Fan Page This Year. How many will buy from you? Want to get your piece of retail sales spent on Facebook? Complete the following form to learn how to get revenue from your brand’s Facebook page without alienating your community.
  • 2. Retail sales on Facebook in 2011 will be $100 million, what portion of that will be spent with your brand? Want to get your piece of retail sales spent on Facebook? Complete the following form to learn how to get revenue from your brand’s Facebook page without alienating your community.
  • 3. A Retailers Guide to F-Commerce Selling to People Where They Are Anyway – On Facebook!
  • 4. A Retailers Guide to F-Commerce: Selling to People Where They Are Anyway–On Facebook! About this whitepaper The content is protected by copyright and cannot be duplicated without permission from Zmags Inc., 320 Congress Street, Boston, MA 02210, USA. The author or any other advisors distributing this guide can under no circumstances be held responsible for any damage or business impact from taking advice from this whitepaper. For any questions regarding this whitepaper, please email Peter Velikin, VP of Marketing at pvelikin@zmags.com Published May 2011 © all rights reserved 2
  • 5. The Fusing of Content Introduction and Commerce As the Internet continues to to evolve with it. These firms evolve at a rapid pace, so do the have been diligent in building opportunities that brands and active social media communities, retailers have available to them and now want to turn those to increase their online revenue communities into revenue and brand engagement. Now that streams. The key to achieving social media networks, such as this objective is to make your Facebook, LinkedIn, Twitter—and products and services available countless others—are attracting for purchase directly from millions of users on a daily basis, the Facebook platform while all retailers and brands are consumers are highly engaged. looking for ways to turn these The question then becomes, social interaction tools into a “Which Facebook commerce way to make money. Already, solution will best help me meet some of the biggest brands in and exceed my objectives? the world are harnessing the In this paper, we will discuss: power of social media to increase their sales. This phenomenon • Why Facebook can be a is being defined as Social highly effective platform Commerce. for selling your products and services, if approached With the rapid pace of the correctly. Internet and the growth of • How you can apply proven Facebook—and not just solutions to turn your participating network members, Facebook community into a but also the evolution of the revenue stream. capabilities made available in the network—leading retailers and brands are being compelled 3
  • 6. A Retailers Guide to F-Commerce: Selling to People Where They Are Anyway–On Facebook! Facebook: The Social Media Network Leader “In three to five years, 10 percent to 15 percent of total consumer spending in developed countries may go through sites such as Facebook.” Mike Fauscette, Analyst, IDC Consulting “It’s a matter of time—within the next five or so years—before more business will be done on Facebook than Amazon.” Sumeet Jain, Principal, CMEA Capital With 1 out of 11 people on Facebook, and with the total number of daily users surpassing 600 million, Facebook is now the undisputed leader in social networks. Social media networks, like Facebook, have long been offering retailers and brands the option to drive traffic to their own e-commerce sites by enabling them to link from their pages to other sites and content. Paid ads, ‘like’ button plug-ins, and custom apps have all been made available by the network for brands to leverage. In recent months, the actions and changes made by the social network leader (e.g., Facebook Deals, Facebook Credits, Facebook ‘Send’, etc.) validate Facebook’s recognition of the rapid growth of their network, coupled with the growth of e-commerce. Consequently, Facebook is now encouraging brands and retailers to leverage their community to build supporting revenue channels. The availability and likability of social networks has introduced a change in the buyer/seller relationship in recent years, such that the consumer is now in control. With access 4
  • 7. to user reviews, recommendations and other insightful information available online, your buyers now have more data about your products than you do as the seller. Since consumers are spending so much of their time (1 out of every 8 minutes) on social media networks, it’s imperative that brands strongly consider establishing a presence on social media networks, and support customers who wish to conduct purchase transactions on these social media outlets. Consider this: You, as a retailer and brand owner, have already recognized the power of this network when you decided to add ‘Like’ or ‘Share’ buttons to your product and solutions pages. Connecting a recommendation or product validation to additional information and ability to transact is a natural evolution in this connection between e-commerce and social networks. It then makes sense that Facebook would introduce the tools for brands and retailers to use the Facebook platform as a selling platform. These statements drive home the point that f-commerce, retail enhanced by the use of Facebook, is the new online selling avenue in the here and now, and will continue to be for the foreseeable future. The top three brands on Facebook, based on ratings derived directly from the fans of the brands, include Coca-Cola® (24m fans), Starbucks® (20m fans) and Disney® (19m fans). While each brand sells different products and services, they have each evolved their presence on Facebook to provide their consumers with both meaningful content and the opportunity to transact. 5
  • 8. A Retailers Guide to F-Commerce: Selling to People Where They Are Anyway–On Facebook! Since these top three brands all “sell” on Facebook, they all engage in f-commerce. Here’s how: • Coca-Cola sells branded products directly from its Facebook page. Facebook users can buy branded items, including clocks, sun visors, salt and pepper shakers, popcorn bowls and other merchandise emblazoned with the Coca-Cola brand. • Starbucks focuses its f-commerce efforts on its current customers, so it engages in a loyalty strategy, where Starbucks card holders can manage their My Starbucks Rewards cards on Facebook. In short, it’s an e-commerce-enabled customer retention management (CRM) strategy. Starbucks Fans on Facebook have a variety of options to demonstrate their loyalty. They can buy and give a gift card to someone else, or load more money onto a current Starbucks card, or check the current balance on a card, or check the current loyalty rewards status level, or cash-in rewards points for prizes and Starbucks merchandise. • Disney sells tickets to current Disney movies in theaters, directly from its Facebook Store (f-store). Users can pick the movie they want to see, invite friends to join them, and choose the date and time—all without ever leaving the comfort of their Facebook page. (Payment processing for the Disney f-commerce store is handled by Fandango.) Each of these brands is using Facebook in its own way to reach and convince consumers to shop where they are already connected to the products—on Facebook. 6
  • 9. Keeping It in the Family: The Case for Selling on Facebook Step back for a moment and think about the power of Facebook from a logical point of view. Facebook is a business. While it is selling itself as a “social” business, it is also a booming business on its own. Similar to any business model that is based on attracting visitors, the intent is to keep their users engaged and interacting. To encourage this, Facebook has created tools, applications, games and a myriad of other ways that enable users to communicate with each other, conduct business, and even shop without ever having to leave Facebook. Essentially, Facebook is a platform that other brands can use to attract and engage shoppers where they are already electing to spend their time. 7
  • 10. A Retailers Guide to F-Commerce: Selling to People Where They Are Anyway–On Facebook! are on Facebook 57.1% of internet users The proof is in the numbers: • According to Forrester Research and Shop.org, the conversion rates of an f-commerce store are just as high as a store from the brand or retailer’s website. Conversion rates for an f-commerce store are 2-4%, while a web store averages 3.4%. • Click-through rates on Facebook walls are 6.5% • Wetseal, for example, says that 20% of its e-commerce sales come from Facebook • 1 in 11 people are on Facebook, which is 642,613,700 users and growing • 700 billion minutes are spent on Facebook on a monthly basis • 57.1% of Internet users are on Facebook These are just some of the figures that illustrate the power of Facebook. These are but a few of the numbers that reveal customers and prospective customers not only are on Facebook, but are spending increasing amounts sharing and shopping while there. In essence, this means that, to get your products in front of new customers and prospects, your products have to be on Facebook too. 642,613,700 Facebook users 8
  • 11. Social Shopping By nature, people are social. Not only are people using Facebook to share pictures and updates with friends, but they are also shopping with friends and getting their advice and opinions on what products to buy. The old-school method of asking friends and family members which product they recommend has been replaced by the Facebook “like”. It’s happening everyday and it’s happening with or without you, so you need to seriously consider adding social commerce to your multi-channel web strategy. Still have doubts? Take a look at these numbers: • 75% of Facebook users have “liked” a brand • Facebook users share over 30 billion pieces of content on a monthly basis • The average Facebook user creates 90 pieces of content per month The long and short of it is that social media has a tremendous impact on shopping behavior. The fact is a referral from a network connection has been found to be one of the most influential drivers of purchase intent. When you add consumer mobility to the equation, it further increases the need for retailers and brands to be selling on Facebook. More and more consumers are using their mobile devices (smart phones and tablets) to access Facebook on a more regular basis. As that trend continues to rapidly increase, selling on Facebook allows brands to reach consumers in their social environment and on the go. Instead of asking your consumers to come to you, you’re now interacting with them on their terms. 9
  • 12. A Retailers Guide to F-Commerce: Selling to People Where They Are Anyway–On Facebook! No Need to Reinvent the you don’t have to spend The great news for brands is that Wheel valuable time coming up with a super unique way to leverage the social shopping phenomenon. That’s because Facebook already ‘gets it’ and Facebook is making it easy for you to sell where people are shopping. Here’s how: • Facebook already combines visual content with experience, which engages users and drives them to interact with each other. • Facebook is primarily driven by visual content, specifically pictures. And, as we all know, visual content is core to effective merchandising. • Facebook combines the personal experience of shopping, which a brand’s website cannot offer shoppers directly (unless they leverage the power of Facebook or allow product reviews on their own site). • Facebook users are receptive to using the platform to shop because it is interactive. Progressive retailers and brands have been diligent in establishing communities of target consumers on Facebook. Enabling f-commerce capabilities allows these loyal, engaged target consumers to both have a dialogue and transact with you, and then spread the news of that purchase through their networks. When you employ the ability to conduct commerce on Facebook and offer shopping applications to the users of Facebook, you are providing the platform for communication and leading them from having these conversations to taking action. 10
  • 13. Creating an Exciting Online Experience Is Key to Success When you think about in-store shopping behavior, you realize that an exciting shopping experience is critical to success. When you merchandise the store carefully, play the right music, have the right fragrances, and provide knowledgeable sales people that engage with consumers, you have created a retail experience that will keep customers in the store longer and ensure higher purchase intent levels. Today, you have to transfer this competency to Facebook. In other words, you have to learn how to create a carefully merchandised shopping experience on your Facebook page. The majority of the ingredients you need for the recipe already exist within Facebook. You do, however, have to take the steps necessary to get it up and running for your own brand. Here are the necessary steps, along with valuable tips on successful execution of each solution: INTERACTION: The primary ingredient to a successful consumer-brand relationship is interaction. This is as true in an f-commerce situation as it is with an offline one. On Facebook, retailers and brands are interacting with an organic community of loyal brand fans. And, just as you have to stay connected with your audience in other marketing strategies, it’s critical that you interact with them frequently and with exclusive insider information to keep this community engaged and growing. 11
  • 14. A Retailers Guide to F-Commerce: Selling to People Where They Are Anyway–On Facebook! Tip for Interaction: Turn your Facebook community into an elite group of lead users. To build a loyal following, companies have to interact and engage with Facebook users and fans on a regular basis and make them feel as if they are part of the company. This group should receive preferred offers on new products and services, and be invited to function as an incubator for feedback on new product concepts. FOLLOWING: Interaction between your brand and Facebook users creates a following. It builds up a group of individual consumers or potential customers that have an interest in your brand. The more people that have an interest in your brand, the better the chances you have to convert these followers into paying customers, for the first time and on a repeat basis. Providing Facebook users with the right mix of content on a consistent basis is what builds up this following. Keep in mind, too, that the average Facebook user has 130 “friends” on Facebook. This means that when you interact Like with the user or the user interacts with your brand or retail store, it also exposes the brand to an average of 130 additional people. Tip for Creating a Following: Build a following on Facebook with the content and information you share. Once you have a large, high-quality group of followers, you can then offer them the opportunity to buy directly from you on Facebook. The reason you want to build your following and then introduce f-commerce on the Facebook platform is that brands that have a following on Facebook, and then choose to conduct commerce on the platform, see benefits more rapidly than those that are still in the process of building a following. 12
  • 15. FAMILIARITY: Humans tend to steer clear of the unknown. Even when we shop, we tend to gravitate to the stores we know. When we’re shopping in these stores, we tend to be attracted to the brands we are familiar with. Tip for Familiarity: Facebook allows brands to move the familiarity of the brand from the offline world to the online world. Not only is the consumer familiar with your brand, but they are also very familiar with using Facebook, and they are comfortable in conducting various types of transactions on Facebook. This includes communicating with other users and with brands. It also includes making purchases directly from the brands and retailers that offer some kind of f-commerce option. When it comes to familiarity, Facebook also endorses a casual relationship between brands and shoppers. The Facebook community is really a place where brands and retailers can “let their hair down” and have some fun. Some brands and retailers reveal the human side of their business by sharing pictures of their employees. Others engage “fans” by hosting fun or silly contests—all of which helps the fans become more familiar with the brand on a personal level, and makes shoppers feel more comfortable and personally involved with the brand. 13
  • 16. A Retailers Guide to F-Commerce: Selling to People Where They Are Anyway–On Facebook! MERCHANDISING: As a retailer or consumer brand, you are highly skilled at both in-store merchandising and catalog merchandising. You know how to lay out the store, or design the catalog, to maximize purchases according to shopper behavior. Tip for Merchandising: Use this same level of merchandising knowledge combined with online data and apply it to f-commerce. You can create a customized online shopping experience that replicates the carefully merchandised in- store and catalog experiences, but is highly optimized for performance based on analytics. Within this experience, use beautiful imagery, as well as rich media, to bring the company and its products and services to life. 14
  • 17. Expectations of the Facebook Consumer The key to leveraging the power of f-commerce is creating an innovative experience for Facebook users. Facebook users expect brands and retailers to deliver an experience that makes them feel comfortable and is properly suited for the social platform, yet conveys the look and feel the brand represents. The expectations of consumers are different on Facebook vs. the retailer’s direct site, regarding what they want and expect the brand to deliver, in addition to how the information should be presented. For example, Facebook users are looking to receive exclusive offers or be the first to know about new products before they become available to the general public. Traditional ‘flat’ product images, often seen in online stores, are not effective in the social media network. Again, the expectations of this network audience is highly connected by content, so you need to consider incorporating videos, high-res graphics, or even real-life models wearing the clothes of the brand or retail store, so as to capture and keep the attention of users on Facebook. One of the ways to enable Facebook commerce—we’ll talk more about later—is to offer your products right on your Facebook page. Your presentation of these products and your merchandising techniques will need to be modified to suit both the platform and the expectations of your shoppers. F-commerce is about more than simply reproducing your traditional print catalog or e-commerce store and pasting it into Facebook. Catalogs 15
  • 18. A Retailers Guide to F-Commerce: Selling to People Where They Are Anyway–On Facebook! or presentations should be built and designed based on merchandising techniques—which is the best way to expose brands and products. By using online analytics, retailers and brand manufacturers can accurately create content for the f-commerce store that is based on user preferences. F-commerce is the wave of the future, too, with the use of mobile and app-based platforms. Some experts see Facebook as the Operating System (OS) of the future. • More than 200 million Facebook users access Facebook with their mobile devices—smartphones and tablets • Facebook users accessing the social network with mobile devices are twice as active on Facebook than PC users accessing Facebook • 94% of phone users communicate on social networks using their mobile phones • 50% of mobile Internet traffic is for accessing Facebook and other social networks • 70% of Facebook users use Facebook applications • 550,000 applications are currently active on Facebook • 44% of retailers plan to use Facebook applications in place of microsites for product launches and promotions 16
  • 19. 200 MILLION mobile Facebook users » using 550,000 apps » consuming 50% of mobile internet traffic 17
  • 20. A Retailers Guide to F-Commerce: Selling to People Where They Are Anyway–On Facebook! 3 Ways for Brands to Harness the Power of F-commerce Now that you have a deeper understanding of the opportunity that f-commerce holds for your company, it’s time to get down to the solutions available to make it happen. Generally, brands and retailers have three primary options for using its Facebook presence to create an f-commerce opportunity: 1. The Facebook Mall 2. On-site Redirect 3. Interactive Catalog 1. The Facebook Mall The Facebook Mall works similar to a brick and mortar shopping mall. Facebook has partnered with Payvment to allow Facebook pages to create a “storefront” tab on a brand’s Facebook page. This allows retailers and brands to display their products for sale and allows Facebook users to shop from Facebook, add items to their shopping cart, and check out. The added bonus for Facebook users and shoppers is that they are not limited to just shopping for your products, but instead have the ability to add products from different merchants to their shopping carts and check out with one seamless process. Since people want to stay in Facebook while conducting their purchasing transactions, using the Facebook Mall allows brands and retailers to control merchandising on the brand’s Facebook page. You own the content and your page, but you have support promoting it to the millions of Facebook users via the public Mall. 18
  • 21. Pros and Cons Product Exposure. The Facebook Mall can work for and against retailers and brands. Since it is a “mall” environment, it essentially is a warehouse of goods. Therefore, you don’t control how your products are presented to consumers. The potential exposure can be valuable, but it can also put your identical products in direct competition with other companies selling the same or similar products. Facebook Presence. Getting your products in The Facebook Mall can, of course, work for companies that don’t have a strong Facebook presence. It’s a fast, cost-effective way to test how your products will sell within your Facebook community members, and also allow you to extend your reach to non-members. Social Shopping. Another feature to consider is the social shopping aspect that Payvment brings to the shopping experience in The Facebook Mall. In addition to making multiple products available for shopping and checking out at one time, Payvment also allows fellow Facebook friends to see what friends are buying, “liking” or reviewing. So, if you add in item in your shopping cart, it also appears in your newsfeed. You can then make a comment on your purchase for others to see. In turn, friends can also leave their own comments or comment back on the items that you have purchased. If you want to deliver memorable, highly curated shopping experiences, the Facebook Mall is not for you. However, if you’re a new business that is simply trying to drive awareness of your products, this could be an effective solution. 19
  • 22. A Retailers Guide to F-Commerce: Selling to People Where They Are Anyway–On Facebook! 2. On-site Redirect The second primary option for displaying your products and services on Facebook is with an on-site redirect. This option allows you to display your products on a custom tab on the brand or retailer’s Facebook page. When visitors to the page click on the product, it sends them to the e-commerce store that sits on your website to complete the transaction, taking them out of the world of Facebook. So, what happens here is that one of the tabs on your Facebook page is labeled “products” or “shopping” or “shop.” You can embed images of each of your products in the tab and even display some information, such as a product description and price. Facebook shoppers can click on the image of the product to obtain more information or to make a purchase. Instead of the transaction taking place within Facebook, however, the shopper is re-directed to your website e-commerce store so the transaction can be complete. In essence, your presence on Facebook acts like a link directory where you are positioning your company and information to consumers in places where they will find you in order to drive them back to your site. Pros and Cons Establish a Facebook Presence. Using the on-site redirect option has its advantages and disadvantages. The primary benefit is that it allows brands and retailers to enable commerce on Facebook. It gets your products in front of shoppers. Since the Facebook option redirects or sends the visitors back to the website of the brand or retail store, it works as a traffic driver. 20
  • 23. Disconnected Experience for Consumer. The primary disadvantage is that it creates a disconnected experience because it requires consumers to leave Facebook to complete the transaction. While a percentage of your consumers will ultimately feel more comfortable visiting your site directly to complete the transaction, you risk alienating those that wish to stay within their favorite social network to complete the entire consumer journey from awareness to transaction. Therefore, it may not be the most beneficial option in creating the Facebook experience that users seek. Once they see that they are being sent to your website, they may close your site and simply return back to Facebook. Others, however, may continue with the transaction. The goal is to satisfy both, so you need to strongly consider how much of this market you wish to capture before you choose this option solely. Technology Risk. There is also some infrastructure risk associated with using onsite re-direct to promote your products. Facebook, as it has been known to do, could make changes to your ability to use this option. For example, Facebook recently removed FBML script from the site to migrate everything over to iFrames. Consider the implications if they were to remove the products or shopping tab altogether! In short, this puts your brand at risk and leaves it at the mercy of Facebook, which means you lose some control. It’s completely unpredictable. » 21
  • 24. A Retailers Guide to F-Commerce: Selling to People Where They Are Anyway–On Facebook! 3. Interactive Catalog The catalog shopping experience has evolved with technology. Now, you have the ability to embed an interactive catalog into a tab on your Facebook page and conduct commerce within it. Just as consumers would flip through a print catalog, they can “flip” through the interactive shopping experience that combines the rich media content that Facebook users consume with the ability to transact without leaving the catalog. Companies can leverage this option to satisfy shoppers who wish to complete the entire process within the social network, and provide the ability to navigate to their ecommerce website for those that do not. Pros and Cons Facebook Navigation. The primary advantage of the interactive catalog is that it allows companies to create an online experience that integrates compelling content with the opportunity to transact. Consumers can engage with your content, click on products, and add items to their shopping cart without ever leaving Facebook. Combining the familiarity 22
  • 25. of their social network with the proven format of a linear, rich media experience, this option truly supports users who wish to navigate Facebook and stay in the application to complete conversions. Capture Impulse Purchases. Another advantage of the interactive catalog is that it allows retailers and brands to capture impulse purchases because of the high levels of customer engagement. The combination of validation of a network connection’s ‘like’ and the compelling content you present to potential shoppers to encourage the sales, cause consumers to stay longer and buy more, without interruption. Technology Challenges. There are some technology challenges associated with this option. First, you have to have an interactive catalog to embed into Facebook. An interactive catalog is not a PDF file of your product catalog. It’s a virtual catalog that combines the look and feel of a real catalog with online shopping cart capabilities. Rather than a flat look and feel, an interactive catalog creates a truly merchandised presentation of your products that pulls the shopper in and moves them through the catalog. In order to truly monetize your Facebook presence, it’s not simply a “build it and they will come” mentality when it comes to successfully selling from the Facebook platform. While these consumers have elected to engage with your company, what and how you offer them to purchase will determine your success. 23
  • 26. A Retailers Guide to F-Commerce: Selling to People Where They Are Anyway–On Facebook! Social Commerce Tips from the Pros In order to cut through the mountains of information on the topic, here are some of the best practices from social commerce thought leaders: • According to Angie Schottmuller from ClickZ, it’s wise to offer exclusive content on Facebook. Create a special offer or special shopping experience to Facebook Facebook followers or those who are willing to “like” your brand E! EXCLUSIV or retail store on Facebook. The ‘exclusive’ may be the inside scoop, an exclusive deal, or products that are available to FB users prior to the rest of the world. • Jason Taylor from Usablenet says that retailers and brands should support easy and secure e-commerce, so that the “shop from Facebook” experience is positive when associated with your brand. • Ruth Mortimer from Adage encourages brands and retailers to leverage f-commerce as a way to provide instant gratification. • Jake Hird from Econsultancy warns that it’s not about choosing between e-commerce and f-commerce; it should in fact be both that you are using to promote your brand and its products. • Brian Solis from E-Commerce to F-Commerce says not to replace e-commerce with f-commerce, but to use both. F-commerce reaches the social consumer, while e-commerce reaches and fulfills the needs of your traditional consumers. 24
  • 27. Don’t replace e-commerce with f-commerce —USE BOTH F-commerce reaches the social consumer, while e-commerce reaches and fulfills the needs of your traditional consumers 25
  • 28. A Retailers Guide to F-Commerce: Selling to People Where They Are Anyway–On Facebook! Conclusion So, there you have it. We hope this paper provided you with the foundation to understand the opportunity presented by monetizing your Facebook community. However, you also see the need to approach this strategically, as the last thing you want to do is alienate this vital community by turning their social experience into a sales experience. You also know now that you have options in how you present and sell your products on Facebook. Now that you have all this information on this topic, it is up to you to evaluate which option provides the most benefits to you, your prospects and your customers. 26
  • 29. To recap: • The Facebook Mall allows you to extend the reach of your products beyond your fan base, but puts you at risk of a highly competitive marketplace. • Using Facebook as a traffic driver to your ecommerce site will ultimately help improve your web traffic and may lead to conversions, but you are not reaching consumers that wish to transact within Facebook itself. • Interactive catalogs allow you to present your company in a rich, dynamic manner, enabling the consumer to transact directly from within the catalog, but achieving this solution will require you to devote additional resources to design and implement your online catalog. Regardless of the option that suits your needs best, as a company seeking to increase revenue, you need to seriously consider a multi-channel strategy in reaching today’s consumer and one of those channels should be Facebook. Remember, as a retailer or brand, you are no longer in control of where the consumer shops or finds you. The primary way to reach them is to put your products in places where shoppers are most likely to find them. Because of its size and potential impact on brands, Facebook has defined the role “social commerce” plays when it comes to online transactions. Leveraging Facebook permits your brand or retail store to play a role in social commerce—one that just may help you reach a 3.4% conversion rate from your f-commerce store; obtain a 6.5% click-through rate on your Facebook wall; reach 642,613,700 Facebook users and 57.1% of the Internet users that are on Facebook. How powerful would that be for your sales? 27
  • 30. A Retailers Guide to F-Commerce: Selling to People Where They Are Anyway–On Facebook! Want to get your piece of retail sales spent on Facebook? Complete the following form to learn how to get revenue from your brand’s Facebook page without alienating your community. 30
  • 31. A Retailers Guide to F-Commerce: Selling to People Where They Are Anyway–On Facebook! Are You Ready for Facebook Commerce? 8th Bridge, a Facebook e-commerce software company, forecasts retail sales on Facebook in 2011 will be IRO $100 million Facebook’s referral traffic to Amazon grew 328% year over year in Oct. 2010, while Google’s traffic dropped 2%. Facebook traffic to eBay grew 81% while Google traffic dropped 3%. According to 8th Bridge, people are 18 times more likely to buy directly in their News Feed than when clicking off to a separate website Progressive brands and retailers are taking notice that their consumers are spending their time on social networks. Zmags enables you to reach your community and share an enriched experience that not only engages them with your content and products but inspires them to convert without alienating them and making the transaction feel forced. • Easily publish online content to Facebook using a custom app located on your brand’s fan page and Zmags • Track engagement and conversion from your Facebook catalog to capture product performance data and overall conversions with your community • Deliver a fully merchandised, interactive experience to your fans that encourages conversions without disrupting the social nature of the network 28
  • 32. Over 3000 brands use Zmags to deliver rich, interactive content to their audiences. Click on any of these brands to see how they are using Zmags Facebook enhancement to connect their content to their community. Cascio Music Great Valley Publishing MyTown NAVC District of Saanich University of Colorado Boulder 29
  • 33. A Retailers Guide to F-Commerce: Selling to People Where They Are Anyway–On Facebook! Online catalogs capture attention. When compared to navigation on HTML product pages, consumers stay longer in a catalog format and put more items in their cart. Online catalogs fit in with your mobile strategy. Because Zmags is fully optimized for all devices, you have the ability to create 1 catalog that is cross-channel. Brands have also added their Zmags catalog to mobile apps and double the number of visitors. Online catalogs provide consumer behavior and product performance analytics. Literally the only advantage you have online is the analytics. Using Zmags, track how consumers use your catalog to drive offline merchandising decisions. 30
  • 34. A Retailers Guide to F-Commerce: Selling to People Where They Are Anyway–On Facebook! Over 2500 brands use Zmags to increase engagement and conversions. Get started today! 30
  • 35. Over 2500 brands use Zmags to increase engagement and conversions. Get started today! 31
  • 36. A Retailers Guide to F-Commerce: Selling to People Where They Are Anyway–On Facebook! 30
  • 37. 31