Facebook's ubiquitous reach now extends into the social commerce arena
Although Facebook, which as of this writing has a looming IPO, declined to comment on the record for this story, it's clear the company has tried to sell itself to businesses as a place to drive their e-commerce strategies. Just a few of the apps Facebook has developed for businesses include building Pages (for branding) and Facebook Offers, designed for businesses to give deals to fans.
Though Facebook has not issued a public statement on the matter, the network seems prepared to work with businesses and developers. In addition, to Offers and Pages, Facebook recently announced the launch of a new App Center, a kind of showcase for paid apps.
Facebook is an open forum — a platform upon which developers of e-commerce can build. Facebook is fostering f-commerce by allowing third-party companies to produce actual stores on the Facebook platform.
While big businesses in general struggle to find a foothold in f-commerce, small businesses are building Facebook stores — and claiming to see results.
Facebook stores resemble regular e-commerce stores: a listing of clickable products that lead to a point-of-sale. They can either be run through the social network itself, or lead a customer to the company's own website, outside of Facebook.
The most direct example of this is Tutu Cute LLC. Tutu Cute's Facebook home page allows users to click a “Shop Now” button that leads to a page, “Shop Tutu Cute LLC,” that looks like any other e-commerce store with product photos and listed prices. Customers complete transactions by adding items to a shopping cart and logging in through Payvment, the two-year-old company that designed Tutu Cute's Facebook store.
Christian Taylor, founder and CEO of Payvment, claims his company makes up 80% or more of the f-commerce that takes place directly through Facebook on Facebook stores. The company reached this percentage by counting the total number of Facebook stores on the social media platform, and measuring their footprint. Payvment's clients are small or mid-sized businesses that have a store set up on Facebook.
“In short, social commerce, for us, means discovery,” Taylor says, adding that even he is hesitant to use the term f-commerce because a truly successful online marketing program is all-encompassing and does not exist solely on Facebook. “Our sellers are entrepreneurs. They're not coming to Facebook because they have millions and millions of fans that they want to add a store, too.” Payvment builds about 1,500 new Facebook stores every week, and those include brands that aren't even close to the mainstream. Payvment has worked with several up-and-coming brands, including College Hautees, a company that makes college T-shirts for women, and ManGlaze, a nail polish made for and marketed toward men.
Joe Ciarallo, VP of communications at social marketing company Buddy Media, says his company focuses on s-commerce, or social commerce — an umbrella term for all e-commerce conducted on social media sites (Twitter, Facebook, Pinterest) beneath which f-commerce is a sub-category. Buddy Media designs applications intended to create stores on company Facebook pages, he says, as well as drive e-commerce on a company's website, using Facebook as a seamless conduit.
“Right now, a majority of people aren't on Facebook to shop, but they are definitely on your online store to shop,” he says. “Your social media program is like any other marketing. This is another channel … It's important to look at new channels for retail, but you can't forget what you already have going.”
J Brand, a clothing retailer, used the company's interface to build a store on Facebook. “At J Brand, social commerce is a high priority,” says Zora Huculak, marketing manager at J Brand. “Since implementing our Facebook Shop store with Buddy Media, it has been a significant traffic driver to our website and is consistently a top traffic source.” J Brand declined to say how much traffic actually comes from Facebook.
Payvment's Taylor notes engagement drives purchasing. A large number of fans, as many big brands have, isn't enough to drive purchasing on Facebook. “If I'm already on your Facebook page, why wouldn't I just go to your e-commerce site and buy?” However, Taylor notes: “Our smaller sellers are doing insanely great.”
Small business owner Deann Kump of Tutu Cute LLC says Facebook with Payvment allowed her to build her business in the first place. Kump launched Tutu Cute out of her home in November 2011 and realized quickly that she'd need to invest in a marketing strategy. The problem: she had little capital to do so.
In December, at the urging of her friends, she opened her company's Facebook page. In January, she started using Payvment. Kump says her business, which now has 900 “likes” on Facebook, wouldn't have grown much at all without f-commerce.
“We went from doing five to 10 orders per day to sometimes doing 25 per day,” she says. “Once I started doing the Facebook shop, my sales were increasing like crazy.” Part of what makes Facebook valuable, she says, is her ability to search the site for possible customers. The next goal, she says, is to start a brick-and-mortar shop near her home in Dinwiddie County, Virginia.
Facebook also influenced Kump's inventory, she says, referring to a Facebook survey she conducted that found many of her fans wanted her to sell bathing suits. She started carrying them, and got 42 orders in one day — a large order for her in-home business. “On my website they're just seeing my merchandise. On Facebook, they get to see me as a person. I get to talk to them,” she says. “Facebook is just more personable. Once they get to know me, they're gonna come back.”