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Facebook Commerce

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Facebook Commerce
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Shopping has always been a social activity, shared between people, so pairing “Social” with “Shopping” shouldn’t define anything that we don’t intuitively understand.

Except that it does.

Social Shopping is a term with different meanings depending on who’s talking and what they are selling. The mainstream definition of Social Shopping from a web point of view is the move of E-commerce activity from corporate websites to social networks. Facebook Deals and Google Boost are two well known examples, and Facebook Credits has been touted by some as the future of online payments.

We define Social Shopping in a different context in our recently released white paper on the subject. The paper may be downloaded from the Wise Marketer (free registration required) and soon will be available from the Hanifin Loyalty site.

Despite the definitions of Social Shopping described in this paper, many people define the term in the context of Facebook. The forecast is for E-commerce to become F-commerce, meaning the shopping carts and related activities currently taking place on corporate websites will shift to Facebook Fan pages.

Some go so far as to predict that the payment methods for F-commerce will become Facebook centric as well, with Facebook Credits becoming a more powerful “way to pay” for online purchases from pizza to shoes.

We prefer to define Social Shopping as something broader than F-commerce. In our book, F-commerce is just one aspect of the equation. In fact, one could argue that F-Commerce is simply an added channel through which to execute “good-ole” E-commerce.

Building “on platform” sales on Facebook is the most significant and attainable aspect of F-commerce for most retailers. With so much traffic building on the social network, merchants want to avoid having to ask customers to take the increasingly big and undesirable step of switching from Facebook to the marketer’s site to complete a purchase.

Delta, Pizza Hut, 1-800 Flowers and others have placed significant bets on technology to support transactions on their Facebook pages. Just last week, Express announced that it was putting its entire product catalog on Facebook so that its nearly 840,000 friends could go shopping without having to leave the site.

To date, most of the F-commerce taking place is based on “real” currency and migrating the payment method to using Facebook Credits is a higher hurdle to clear. Facebook will undoubtedly find it easier to get shoppers to purchase stuff in Farmville with Facebook Credits, but we question the benefits of selling airline tickets or pizza with the alternate currency.

In addition to the need to educate the public and build confidence in its reliability, Facebook will have to examine its fee structure for Credits. As announced initially, the transaction costs appear to be much higher than the merchant discount rates currently under attack via retail merchant lobbies and subject to reduction from the Durbin amendment. To introduce an online alternative currency has promise, but to choose a starting point for fees that represents higher costs to merchants does not.

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Loyalty 3.0

Three Words for Customer Loyalty in 2017

Three Words for Customer Loyalty in 2017

The 3 Words Process Each year, Loyalty Truth completes an exercise to select 3 words that we believe will define the course of the Customer Loyalty business over the next 12 [...]

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