Friending e-commerce

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Facebook's ubiquitous reach now extends into the social commerce arena
Facebook's ubiquitous reach now extends into the social commerce arena

She says that because of her modest Facebook reach, she has shipped orders around the U.S. and Canada. Kump says that she's betting her e-commerce growth will occur mainly through Facebook — not from her own website — because Facebook allows her to create a business persona and engage her fans daily.

Can fans become customers?

At the core of any f-commerce campaign's success, Etlinger says, is the blurring of “business and pleasure.” People aren't yet trained to go to Facebook to buy, the Altimeter Group analyst says. They're trained to come and look at their friends' pictures and share personal news and stories.

According to an April 2012 Forrester Research study, “The Facebook Factor,” fans of large brands — Best Buy, Coca-Cola, Walmart — are more likely to make a purchase than non-Facebook fans. The study showed that fans of Best Buy were 5.3 times more likely to buy from the brand than nonfans.

At Best Buy, for example, Facebook fans spent an average of $368 at the store versus $150 spent by nonfans. Walmart fans, the study found, spent nearly twice as much at the store during the past 12 months: $1,103 for fans and $598 for nonfans.

“You're seeing that your Facebook fans are more likely to have brand interactions,” says Gina Sverdlov, a Forrester Research analyst. “Social media just houses brand advocates.” And if a business knows where to find them by targeting fans on its Facebook page, it truly doesn't matter which came first. “The most important takeaway is that locating your brand advocates has become easier,” Sverdlov says. Thus, brands should market to them to operate sales conversions.

This has implications for how consumers will buy on websites via e-commerce, too. One online retailer, Hari Mari, a Texas-based flip flop company whose Facebook page teases to its e-commerce site, says 40% of all traffic to its website comes from Facebook. Because Facebook is part of the company's path to purchase, Timeline and “likes” are ultra valuable, the company says. Only people who “like” Hari Mari can see the Facebook store that connects back to Hari Mari's site.

“We actually launched our Facebook page in advance of our e-commerce website. We had about a four-week head start,” says Hari Mari founder Jeremy Stewart. “It helped build momentum and excitement for the brand,” which then translated into traffic to the site. Hari Mari launched in March, Stewart says, and has grown through Facebook since then.

However, Sverdlov says only about 2% of all adults who update a social profile or visit a social networking site regularly report having spent money on Facebook recently. As such, Sverdlov warns against relying on f-commerce too much. It's an amazing driver of e-commerce, but Facebook is not necessarily the best location to put an online store, she says.

To “like” or not to “like”

How a company uses Facebook is largely dependent on its size, line of business (retail, food, services), age and past experience with its customer base. For small businesses like Tutu Cute, Facebook stores are beneficial. For large brands, customer engagement and driving seamlessly to an e-commerce site outside of Facebook is key. Either way, it's clear that f-commerce will continue to evolve and play an important role in e-commerce

strategies during the next couple of years.

Facebook commerce is here to stay. And, ready or not, it's time to “like” it.

Click here for more of our Facebook-related coverage.

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