Has f-Commerce Ended Before It Has Even Begun?

Sucharita Mulpuru has made no secret of the fact that she doesn’t believe in f-Commerce.  Mulpuru, a senior analyst at Forrester Research has even been quoted as saying “In the history of retail, there has probably been nothing that has been so widely anticipated yet underwhelming as the ‘era of social commerce,’”.

To back up her theory, one just needs to look at the recent news whereby big brands such as Gamestop, J C Penney and Nordstrom have made the decision to close their Facebook stores.  In a recent telephone interview with Bloomberg she was once again quoted with negativity toward f-Commerce, “There was a lot of anticipation that Facebook would turn into a new destination, a store, a place where people would shop, but it was like trying to sell stuff to people while they’re hanging out with their friends at the bar.”

However, with that said, I don’t believe that f-Commerce or the future of selling products within a social environment should be dismissed so easily.  Instead, everyone involved with f-Commerce needs to take a step back, admit temporary defeat, understand the failings to date and either rebuild or improve the social shopping experience.

Even using Mulpuru’s own analogy of selling people ‘stuff’ while they hang out in a bar can be used positively.  For example, if someone if hanging out in a bar find out why they’re there, who they want to be with and what they would spend money during their visit.  Again using the ‘bar’ analogy, customers would be interested in being presented with relevant offers according the situation.  People are distracted into doing things spontaneously.  Just look at the success of all of the ‘off Broadway’ comedy shows.  Everyday hundreds of people on the streets around Times Square are asked “Do you like comedy?”  Has a comedy club ever decided to stop using this marketing tactic due to other comedy clubs not having success?  The answer is no.  This is the same reason why retailers looking to promote and sell within Facebook should not give up just because big name brands have not had success.

Admittedly things should change.  Storefronts in Facebook, sitting on Fan pages have become too readily available at too little cost.  Thereby alluring retailers into thinking that selling on Facebook is easy.  It’s not, nothing in life is.  But it doesn’t mean it’s time to give up.

Facebook itself has done very little to assist retailers get traction.  There have been no ‘best practice’ case studies on Social Commerce produced by Facebook.  Perhaps if Facebook didn’t take 30% on the sale of each Facebook credit, the credits may have a real monetary value that could be used to make purchases within Facebook stores.  After all, buying tangible goods is far more important and valuable than being used to buy virtual game tokens or imaginary swords.

Consumers still do not understand the security aspects of purchase transactions within Facebook.  This needs to be more widely spoken about.  It’s incredible that Facebook manages to get mentioned in the press at every given opportunity but does not use this sway to educate consumers.  Zuckerberg’s quote of how commerce on Facebook will blow up is almost two years old and is still being used by f-Commerce startups in their marketing material.

In short, f-Commerce has not been done correctly.  The education and psychology of social consumers is still not understood well enough.  Development companies offering Facebook storefronts to the masses,  with no aid to assist their storefront customers, has also been detrimental to the industry.  If things do not change, if Facebook does not pay heed, f-Commerce may come to an end.  But it will not be the end of social commerce.  Social commerce began when the first person shared with a friend details of a deal or an offer via the web.  Facebook’s existence did not create f-Commerce.  It just created additional opportunities which, as yet, have not been fully optimized.

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2012 The Year Social Commerce Will Blow Up

Christian Taylor, CEO and founder of Facebook storefront provider Payvment, recently shared his thoughts for the growth of social commerce in 2012.  Mr Taylor pointed out three ways that ‘taste graphs’ will fuel social commerce.  A taste graph, similar to Facebook’s ‘open graph’ is the specific and personal tastes of a user who is connected to you in a social capacity, whether as a ‘friend’, ‘fan’ or just someone who has subscribed to your Facebook updates or vice versa.

I would like to take this opportunity to expand on these ideas and add my own view to how this may or may not assist with the growth of social commerce.

Social shopping is a formula based on social science.  The study of human behavior and interaction with the direct influence of trend setting, social influencers.  If you’re really looking to see correlation between influencers and purchasing, take someone who averages 20 individual comments per status update.  This person is an influencer within their network of friends.  Now, find five people within this users’ network who share a passion or interest with this user.  Imagine that the shared interest is the clothing line of Ralph Lauren.  Offer the influencer a huge discount on Ralph Lauren merchandise in return for direct access to broadcast to his five friends about his recent Ralph Lauren purchase.  Would any of these five friends make a purchase within Facebook based on these simulated conditions?  Maybe, maybe not, but the thought of purchasing has, without a doubt, been firmly planted within their sub-conscious psyche.

Targeting Deals and Offers based on Interests

Mr Taylor wrote that ‘by mixing my social data with its own data about my general interests, a company’s taste graph can produce deals hyper-targeted to my interests’.  This statement is true but not yet totally possible within the current Facebook environment.  After all, what is considered a user’s interests within Facebook?  Something that the user has ‘liked’ or has added to their list of ‘interests’ within their profile?  Regarding the profile interests, these could be completely incorrect.  A person completes these details once when first opening a Facebook account and rarely updates this information.  As for ‘like’ to represent interests, this is nearer to capturing real information but would also need to be adjusted based on the reason for the ‘like’.  The full study should include the ‘why’ when the user originally ‘liked’ what is seen to be an interest.  This gives a deeper insight into the user’s intention.  For example, the user may have shown an interest based on discount, influence, content or any other reason.  The importance lies in the ‘why’ as opposed to ‘what’.  This is the formula that needs to be followed in order to really capture the attention of new fans.

Shared Passions and Recommendations

Without a doubt a shared passion such as music is a big influencer.  If I share the same taste in music with a friend who I can see just bought a new CD of our favorite artist, I would be tempted to take a look and even to buy the same disc.  But can this be applied to every vertical?  Wouldn’t it be cool if there was a fashion identification application which could distinguish your clothes from your photos and match similar fashions to your friends?  The app would recognize the clothes worn by you in your photographs by style, color, date and season and match them to similar clothes worn by tagged friends.  The app would then know to inform users within the same ‘fashion circle’ whenever a purchase is made by someone within the group.

‘Fashion Circle Plus’ – what a great name for a new Facebook application.  It could also offer the ability to ‘tag’ your clothes within photographs that you upload to Facebook.  Brands can upload latest fashions and styles into the application and users just choose from the pre-defined tags created by the brands or just add the style tags themselves.

Social Commerce Tastemakers

By nature, people follow in the footsteps of well-known personalities and celebrities.  Back in October we wrote that celebrity endorsement is the future of social shopping within Facebook, but now that people can subscribe to personal newsfeeds within Facebook, it brings the whole idea one step closer to reality.  From experience I have seen cases where celebrities feel that they ‘cheapen’ their name when endorsing products for sale on Facebook.  This is yet another mindset challenge for 2012.

The people who should be leading the way with this project are celebrity agents.  After all, product endorsements with revenue from sales are solid revenue models for celebrities.

Summary

In short, I personally believe that 2012 will be the year that Mark Zuckerberg’s statement “If I had to guess, social commerce is next to blow up,” will come to fruition, but it won’t happen without a little more help from Mark and his team at Facebook.

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VendorShop and Planet Payment Join Forces to Launch Free Multi-Currency Shopping Cart for Facebook Stores

VendorShop, a leading provider of shopping cart applications for Facebook and Planet Payment, Inc. a leading provider of international and multi-currency payment processing services, today announced the integration of VendorShop’s Facebook shopping cart application with Planet Payment’s iPAY multi-currency eCommerce gateway.

This innovative Social Commerce solution (www.facebook.com/PlanetPayment) empowers merchants to sell to a global market of over 800 million Facebook subscribers, enabling retailers to convert their “static” Facebook presence into a new sales channel for their business. With this solution, Facebook merchants can now accept credit cards through any participating acquirer integrated into Planet Payment’s international transaction platform.

VendorShop provides a solution for businesses to drive direct revenue from their Facebook presence – enabling anyone with a Facebook page to add a free shop and to sell their products and services without customers having to leave the Facebook environment.  “Most companies already have Facebook pages, but if a customer wants to buy an item they get referred back to the company website,” stated Chris Small, CEO and Founder of VendorShop.  “Facebook users already spend a huge amount of time on Facebook with more than 50% ‘liking’ a business page to find out about sales and promotions.  So if I’m going to tell you about a product on my Facebook page, it makes sense to make it easy to buy right there. Redirecting customers off Facebook adds additional steps to the process and potentially increases the likelihood a merchant will lose the sale – so keeping the shopping experience contained solely within Facebook is very important.”

For the merchant, VendorShop is simple to set-up and configure products and pricing and there are a number of tools to integrate with existing systems. There are also a number of social features such as ‘fan pricing’ and ‘incentivized sharing’ to enable businesses to enhance the Facebook experience, grow fans and drive sales.  “Creating a unique shopping experience and rewarding your fans for being fans gives a real reason to buy, but also turns them into even more powerful advocates for your business. As a result you not only create a new Facebook sales channel, but you can enhance sales via a new viral consumer channel too” stated Small.

As a result of the partnership and integration with Planet Payment’s iPAY Gateway, VendorShop customers now have access to Planet Payment’s PCI compliant, end-to-end processing solutions for eCommerce, call center, mail-order and telephone order merchants. The VendorShop solution has also been enhanced to include support for Planet Payment’s Multi-Currency Pricing functionality, providing Facebook merchants with the ability to more effectively target international markets by allowing their customers to ship, view pricing and pay in the  in their home currencies, while continuing to receive payments and reporting in their own native currency.

Aviesta.com, an online private sale community serving members in the US and Latin America recently launched their social commerce site (http://www.facebook.com/VivaAviesta) on Facebook utilizing Planet Payment’s solution.  “We wanted tap into the Facebook phenomenon to help grow sales,” said Brett Posten, Chief Creative Officer of Aviesta.com.  “With more than 800 million users and over 50 percent of who log-on at least once per day, Facebook social commerce was a top priority for us.  In addition, we needed a solution that would provide us with multi-currency options and one that would be easy to setup and maintain – Planet Payment’s solution fit the bill.”

“Planet Payment provides value-added products/services to help merchants sell more and expand their business globally,” stated Scott Goldthwaite, senior vice president of product management and marketing.  “Social media enables businesses to make a deeper connection with their customers and Facebook has the potential to become the biggest marketplace in the world, representing a significant opportunity for businesses to create a new revenue stream by enabling their fans to buy products directly from their Facebook page.   VendorShop’s expertise in Social Commerce and shared commitment to helping businesses sell on Facebook has made this an ideal partnership.”

 

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The Formula for Successful Social Commerce

With less than three shopping days to go until Christmas, retailers are starting to notice an increase in shoppers coming from either Facebook based catalog sites or deals promoted within Facebook branded pages.

Social shoppers have already become savvy on fan only, exclusive discounts.  According to a recent comScore consumers have already spent $30.9 billion in online purchases so far, this holiday season.

Without a doubt the contributing factors in the rise of online buying are convenience, 24/7 accessibility, less time consuming at the point of purchase, no queuing for the best deals and in most cases, free shipping.

Well known stores such as J C Penney, Kohls and Macys have all utilized their Facebook presence to increase their online sales this year.

In our opinion this is just the start of brands beginning to really benefit from their of use social media around holiday times in order to heighten their brand visibility.   As we’ve said before there are three crucial elements.   Those elements are engagement, interaction and a captivating offer.  The true formula behind successful social commerce.

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Payvment Offers One Day Deals to ALL Storefront Customers

In a bid to repeat the success of Black Friday, Payvment is offering ALL of their social storefront customers the opportunity to create and offer one day deals which will then showcase on Payvment’s Shopping Mall within Facebook.

Payvment are recommending that sellers offer at least 50% discount on deal items to increase the chances of a sales and create buzz among social shoppers.

The one day discount bonanza will take place on Wednesday December 14th.  This is a FREE promotion to run and is open to Payvment customers at all levels.

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Just Tell Me What to Like – An Infographic

Basically, we don’t want to think. We want to be told what to like, what looks good on us, what we should buy and who we should even be friends with. Only over time, from the age of innocence (and it really doesn’t last that long) until thinking independently we discover that unquestionable trust is not always such a good thing. But, on a sub conscious level, our brains tell us who to believe and who is trustworthy. Even if, on occasion, we’re completely wrong which only ends in regret.

In this interesting and amusing infographic produced but the team at Tab Juice, they have broken down the psychology of Social Commerce and have clearly defined the rule. “When uncertain, look at what others are doing.” Which really is the underlying characteristic of a social network and probably the reason for its success.

Additionally, the data used in the infographic, although unverified, is also very insightful. The fact that 77% of online shoppers use reviews and Facebook is the easiest medium for receiving and having access to such reviews, should indicate how successful social commerce should be. Even if it isn’t right now.

As we approach the holiday season I can truly associate with the ‘less is more’ section of the infographic. Ever since childhood there was always a specific item, whether a toy, game, computer that is always hyped up for the holiday season. Usually three weeks before the holiday season begins, the item is ‘Sold Out’. Miraculously it reappears a week before the holiday season and the sales of this item sky rocket.

And the final take out of this illustration is that 25 billion pieces of information are shared on Facebook. Which begs the question, with all this information being shared, does anyone have time to do anything anymore?

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Shopper Traffic Rises by 30 Percent in Facebook

According to a press release from Social Commerce provider Payvment, shopper traffic on Facebook has risen by 30% since the beginning of November. The release also states that social discussion and sharing has also risen 25% within the Payvment Shopping Mall where there are allegedly more than 2.4 million products currently available from an alleged 100,000 sellers. With these figures, the average retailer product catalog displayed by Payvment customers is just 24 items.

The release continued with a statement from Christian Taylor, Payvment’s CEO and co-founder “Consumers are starting to think of Facebook as a holiday shopping destination, and we hope to encourage that behavior by making it incredibly easy to find unique gifts and great deals from a large number of sellers,” he added, “In the past, Black Friday and Cyber Monday have been the domain of the ‘big box’ retailers, but now with the Shopping Mall we’re helping the boutique sellers by aggregating and promoting their deals for consumers all in one place on Facebook.”

Below is a screenshot from the Black Friday deal finder in Payvment’s virtual shopping mall on Facebook. At the time of this article being published it was yet to be active.

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Where Is Social Commerce Heading To?

The following artice was written by Lauren Green, InstanteStore.

With all the buzz about social commerce, you’d wonder whether any of it is actually going anywhere? While there are quite a number of service providers that help merchants set up an online store and provide powerful features for them to upload their products to Facebook, are these merchants actually seeing an increase in sales?

The Bright Side Of Things

Let’s look at the positive side on where social commerce is heading to. With Facebook’s continuous growth, many businesses are keen to promote their stuff there. And with it’s user-friendly interface, merchants will find it easier to communicate with customers directly and vice versa. So positive interaction will help your business grow as customers spread the word about your store to their other Facebook friends. And if your products happen to get a lot of ‘Likes’, that’s also a plus point giving people more reason to explore your store and products further. Interested customers now have the option to complete the entire payment process within Facebook or be routed back to your store to have it done there. Convenience is the key here. In fact, we have several merchants who are having a blast selling their products on Facebook with our Social Shop. Check out their sites listed below and see how real they are when interacting with customers. You could probably learn a thing or two from them on how they have their Facebook and online store set up.

The Latest News And How It Will Affect Your Business?

Just got news that Facebook will be collaborating with eBay to offer their 850 million members a more powerful social commerce and shopping platform. Pretty soon, customers will not only have the option to ‘Like’ a product but be able to ‘buy’, ‘own’, ‘want’, ‘recommend’ or ‘review’ them according to Katie Mitic, Facebook’s director of platform and mobile marketing in her recent presentation last month. For buyers and users, this makes it more exciting as they will be able to share their product stories. For merchants out there, they need to ensure that their products are able to meet customer’s expectations since word-of-mouth could easily spread over social networks at break neck speed. Many merchants will need to work on offering better products and improving their customer service. In short, to be able to provide a better shopping experience to customers.

Poised For Growth

Social commerce is going to continue growing since people are now more technologically savvy. People want information fast. They want better service. When they surf the net, they know what they are looking for. And being sociable creatures we humans are, we like to spread the word around when we find something good. An awesome product, a heavily discounted item, super customer service experience, the latest product to hit the market. Emails take too long to compose these days. It’s so much faster to put it on Facebook or send out a twit with Twitter. The new shopping experience will be riding more on people’s recommendations which carries more weight compared to a shop or business doing their conventional marketing.

Don’t Be Left Out

So don’t be left out in the wake of all these new developments that are taking place. Stay up to date with the current news and provide constant feedback to your service providers on how they can improve their product to help you sell more. Believe me, they’ll thank you for it. Bear in mind that your focus should still be working on your own online site while having a store on Facebook will help spread the word around quicker if done right. Learn from some of the more successful companies that have done well in the social commerce arena and see how you can use that to improve your own business. Happy selling!

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Future Predictions for Facebook Commerce

More businesses are realizing the importance of social interaction and engagement on Facebook. Some are even using social storefront providers such as Payvment and ShopTab to display and sell their products. However, one thing that small to medium sized businesses (SMB’s) are not realizing, is the importance of resource allocation and marketing budget in order to effectively execute their social strategy, if they actually have a strategy.

The social storefront providers do not seem to be doing enough to make SMB’s understand the importance of their overall strategy once they launch. Instead it is becoming a numbers game in the competition for brand share. Over time however, this will only be detrimental to the f-commerce landscape. Stores will open on Facebook in the belief that placing their products will generate sales. Without the right strategy, engagement and interaction, they will find disappointment and be discouraged to continue paying monthly fees to display their products. The customers of free social storefront providers will simply abandon the day to day maintenance of their stores.

In order to combat this, there needs to be more emphasis on helping retailers truly understand the task at hand. Enterprise solution providers such as ShopIgniter and 8th Bridge will continue to grow. When a large brand decides to invest a substantial amount of capital on an enterprise solution, there is a fair assumption that they will also invest the time, effort and money to develop a complete strategy. This is where smaller businesses will initially fail due to lack of resource, money and understanding of social commerce.

Currently there are few SMB storefront providers, offering their customers the analytics to understand the effectiveness of social media. How many SMB storefront providers can boast that retailers have the data at their fingertips to see which products were shared, how many times and by whom? Additionally, how many new fans of their brand became fans by shared recommendation? From their fan base, how many people are likely to share, recommend or ask advice about their products?

As social commerce evolves I believe that SMB storefront providers will either, develop analytics to incorporate crucial data or partner with companies such as Hoot Suite in order integrate pre-developed analytic systems into their offerings. I also believe there will be a rise in Social Commerce consulting agencies to bridge the gap between social storefront providers and small to medium sized businesses that are not knowledgeable within this ‘new’ arena.

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ShopIgniter Lights the Path for Social Commerce

Kevin Tate, Newly appointed CMO of ShopIgniter, shared his vision of Social Commerce with CommerceOnFacebook.Com.  ShopIgniter, founded in June 2010, are among the leaders in the realm of Social Commerce.  What separates them from the rest of the pack is their knowledge, experience and understanding of what makes a social consumer.  Admittedly, the hard part is getting brands to understand the importance of social consumer psychology before offering them the unique tools that have been developed by ShopIgniter to really plug-in and engage with social commerce and consumers.

Just last week we wrote that in order to engage with customers, brands need to think about a points system to reward social interactions and direct recommendations.  We called it ‘bonus bragging’.  ShopIgniter have already begun this process which they have released to a handful of their VIP Enabled Stores.  The system which has the ability to score influencers of Social Commerce, is a the first working prototype of a Social Commerce loyalty system, encompassing the following features:

  • Enhance promotions and campaigns reward with points or status
  • Bi-directional rewards to build social equity of customers
  • Trackable with social commerce analytics
  • Shareable via facebook, twitter or email

By identifying and incentivizing the influencers of their brand, retailers will have the ability to create brand evangelists out of their best and most influential customers and thank them accordingly.  The program encourages customers to communicate through experience resulting in driving revenue and not just additional fans.  The ongoing loyalty aspect also separates one-time bargain hunters from long term customers.

Asked what he sees as the biggest obstacles currently facing ShopIgniter, Kevin replied “The level of noise in the market,” meaning that there are so many offerings springing up for Social Commerce solutions, that brands and retailers are getting potentially overwhelmed by choice and not fully understanding which provider would be best for their business.  The danger of this is also lack of knowledge within the realm of Social Commerce and Social Media.  Many companies do not have a “consistent owner of social commerce decisions”.  Larger brands are beginning to understand this and appoint executives in the realm of social media.

Given that ShopIgniter’s target market is large brands, I believe that once the potential of these features is realized, social commerce providers of small and medium sized businesses will begin to emulate and offer similar loyalty and influencer recognition systems.  On a speculative note, maybe the future will see partnerships between enterprise providers such as ShopIgniter and smaller, subscription based social storefront providers.  This would certainly be the fast track in the evolution of the Social Consumer.

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