- Category: January 2012 - Marketing Trends 2012
The marketing phenomenon Facebook will continue to be the talk of town this year, and even more since the company is considering an initial public offering (IPO) in the second quarter of 2012.With about 800 million users worldwide Facebook is highly anticipated as a public company and the offering could raise $10 billion at a $100 billion valuation, outshining all other recent social media IPOs like those of LinkedIn or Groupon. Be that as it may, the fact is that whoever cavorts in the retail business and is looking for a direct dialogue with his audience can't get around the social network of Mark Zuckerberg.
The temptation of revenue opportunities within Facebook are motivating business owners to explore F-commerce, which means shopping via Facebook stores. This relatively-new sales channel is still in its infancy, but is definitely one to watch in 2012. This totally new and emerging sales channel allows businesses to be where their customers are and the opportunity to make money, but expectations should be realistic for now or used more as an experimentation lab for testing certain kinds of products to see how customers react.
While using Facebook as a sales channel (F-Commerce) is still in its infancy, studies from a dealer's point of view already show a lot of potential. A research on behalf of Facebook has revealed that fans like to recommend a brand, and supposedly one third of Americans surveyed like to talk about brands, among the under 30-year-olds it is even as high as 56%, and 78% generally saying they "like" no more than ten different brands. Their reasons to opt for a company are the hope to get special offers or discounts (57%), after all 41% intend to express their solidarity to the brand, whereas 58% of the fans are already customers.
Regarding communication, however, most are just reading posts (77%) and only a few are writing comments. For 56% being a fan has an impact on their recommendations: 56% say that they recommend generally only brands they "like" and for 51% of them the likelihood to buy that product increases, too.
Consumers still critical of Facebook are mainly concerned with data safety and privacy issues. Consequently, they are also skeptical when it comes to the use of the network as a sales channel. Therefore, distributors would have to offer very high safety standards that should be set as high as those in established online shops.
Many users are still worried by giving out their user data, since they know Facebook so far only as a communication media. Their concern to receive a flood of additional sales messages is understandable and could destroy trust, thus, retention and data protection have to have the highest priority.
F-commerce offers both users and dealers new advantages compared to e-commerce. Currently, F-commerce serves more as an additional channel in which companies can offer their customers a unique shopping experience but it cannot replace a Web shop only support it. Since the development of F-commerce depends directly on Facebook, the emphasis should be on e-commerce to keep the greatest possible freedom of action.
A Facebook Store has to meet the communicative aspect of the medium. Exchange and networking should therefore play an important role here as well. Sale offers should be perceived as enriching and not as disturbing. Unique products that do not require research efforts are therefore particularly well received. We know by now that customers on Facebook expect a unique shopping experience. As fans, they want to benefit from generous exclusive offers, discounts and distinctive products. The purchase should provide an immediate reward, triggering buyers to share their purchase experience with others. Through group purchases, companies have an additional chance to reach new consumers.
For an introduction to F-commerce, intangible things such as vouchers, discount codes or coupons are suitable. Recent studies showed that users would like to buy tickets on Facebook. In general, products that are suited to give away and generate word of mouth are the best choice since it gives companies an opportunity to gain experience and find out, what products or services get particular attention.
However, as said, please avoid making the F-Store a replica of the E-Store. Create awareness and relevance with unusual concepts, or experiment with unique communication concepts. Time-and volume-dependent offers, as well as fan-first-and fan-only items, create desire and word of mouth.
Observe users' behavior well. Facebook insights provide a set of standard criteria that companies can track, like the number of fans, interactions between the fans and churn rates. The analysis of these figures will tell you whether the Facebook site provides relevant content and with what kind of incentives you can offer to turn fans into customers.
Facebook users have specific expectations regarding communications on products and services. They have learned that their status as a fan gives them access to special information and offers, which companies have to consider when developing campaigns or providing information and offers.
Facebook isn't suitable as a platform for product search, yet. Users come across interesting products either via news feeds or recommendations from friends; therefore the Facebook Wall should act as a shopping window that provides inspiration, ideas and information on exclusive promotions.
It could be that Facebook-enhanced retail will become the shiny new object for industry players and investors in 2012. Small business owners, however, should be aware that the legal standards that exist in brick and mortar stores and through traditional online retailing also translate to F-commerce.
By Daniela La Marca