Webinar: The Case For and Against Facebook Commerce

Agenda 1.  Introduction 2.  The Case Against Facebook Commerce 3.  The Case For Facebook Commerce 4.  The Great Debate: F-Commerce OpportunityWebinar Hashtag: #FBDebate Perspectives 5.  Q&A

However, things haven’t really changed for retailers Source: The State of Retailing Online 2011, a Shop.org study conducted by Forrester Research7 © 2011 Forrester Research, Inc. Reproduction Prohibited #FBDebate

Overall, Facebook is outranked by traditional webmarketing tactics across the board Source: The State of Retailing Online 2011, a Shop.org study conducted by Forrester Research8 © 2011 Forrester Research, Inc. Reproduction Prohibited #FBDebate

Three ways we see retailers using Facebook Greater value to large retailers Illustration Description Indirect sales Using Facebook data to extract trends, Data layer identify influencers, monitor competition, extraction glean customer insights Example retailer: Zappos.com Extraction of Facebook’s Open Graph Off-“Top and bottom of the funnel” data onto key selling pages, “likes” on Facebook product detail pages Direct sales Example retailers: Levi’s, JanSport, Wet Seal fCommerce initiatives such as stores, fan On- pages, peer-to-peer contacts “within the Facebook four walls” of Facebook Example retailers: JCPenney, 1-800- Flowers.com Source: Spinback; Levi’s Facebook page; JCPenney Facebook page 12 © 2011 Forrester Research, Inc. Reproduction Prohibited #FBDebate

Some pockets of success “Kembrel . . . [drives] 20% of all transactions . . . within Facebook with a 7% to 10% larger shopping cart size.” Internet Retailer, December 1, 201013 © 2011 Forrester Research, Inc. Reproduction Prohibited #FBDebate

But metrics are generally anemic even after shoppers share their purchases Many retailers cited social commerce as a customer retention tool rather than customer acquisition.14 © 2011 Forrester Research, Inc. Reproduction Prohibited #FBDebate

Why fCommerce has been challenged (and will likely to remain so)   The Facebook algorithm for what shows up on a wall is a mystery.   People don’t use Facebook as a search engine.17 © 2011 Forrester Research, Inc. Reproduction Prohibited #FBDebate

Facebook looks closer to an email substitute than a proxy for Google Source: North American Technographics® Retail Online Benchmark Recontact Survey, Q2 2010 (US)18 © 2011 Forrester Research, Inc. Reproduction Prohibited #FBDebate

Why fCommerce has been challenged (and will likely remain so)   The Facebook algorithm for what shows up on a wall is a mystery.   People don’t use Facebook as a search engine.   Facebook Credits are not a realistic payment option for most merchants.   Facebook has a spotty reputation with respect to consumer privacy. –  “Beg for forgiveness” culture   UGC often has a quality and sparsity problem (for both product discovery and validation). –  Product discovery is an opportunity, but item-level validation is challenged. –  Solutions like “Ask Owners” makes much more sense for item-level validation.   The Open Graph is viewed by some as a new evil.19 © 2011 Forrester Research, Inc. Reproduction Prohibited #FBDebate

What this all means   There will be a cottage industry of “social network providers.” –  Facebook as a corporate entity will be less a player than a supporter.   Look for the rise of “inbox marketing.” –  Cross-training of email marketers   Amazon.com won’t have much to fear, but eBay will.   Facebook may be the metaphorical kick in the pants to bring attribution measurement to the mainstream.   Expect attention to float to other “hot” opportunities in mobile, tablets, and behavioral marketing.22 © 2011 Forrester Research, Inc. Reproduction Prohibited #FBDebate

Facebook is unlikely to be an email replacement but rather a complement to it Source: The State of Retailing Online 2011, a Shop.org study conducted by Forrester Research23 © 2011 Forrester Research, Inc. Reproduction Prohibited #FBDebate

Facebook; THE consumers’ community of choice•  The case for commerce is emerging. It’s early days•  Ecommerce sites should take steps now and give customers the option to connect via Facebook, to build a Facebook-powered profile and lay the foundation for future innovation•  The Facebook UI will rapidly improve to leave room for commerce and community to beautifully coexist•  Facebook is a Net New source•  Facebook is complimentary, not replace traditional ecommerce programs•  Facebook on Site•  The sales opportunity for Facebook commerce exists outside the walls of Facebook, on ecommerce sites where consumers are comfortable making purchases•  On-site Facebook integration will be most useful when merged with native customer data (e.g. order history, customer reviews) #FBDebate

The core case for commerceTraffic * Conversion * Average Order Value = Sales #FBDebate

Net new source of traffic comScore and J.P. Morgan (January 2011). #FBDebate

Facebook and Google are complementary #FBDebate

The catalyst Introduction of the Like Button (anniversaried on 4/21) •  More than 2.5 million websites have integrated the like button •  10,000 new websites integrate with Facebook Like each day •  Every month, more than 250 million people engage with Facebook on external websites #FBDebate

The Driver #FBDebate

What consumers tell usI want relevant experiences BUT I Facebook is the consumers’don’t want to manage multiple profile on the web – Facebookprofiles across the web ConnectReviews are the #1 community Consumers are sharing theirand social tool with the greatest endorsements on Facebook atimpact on my buying behavior an increasing rate and each ‘share’ = $15.72Facebook Friends, People LikeMe, and experts are the “online Facebook is emerging as avoices” with the greatest impact source of saleson my purchase decisions1 1 Source: 2010 Social Shopping Study, the e-tailing group/PowerReviews #FBDebate

Facebook Friends impact purchase decisionsSource: 2010 Social Shopping Study, the e-tailing group/PowerReviews #FBDebate

Endorsements from Facebook Friends drive sales #FBDebate

PowerReviews’ customers see value first hand http://powerreviews.com/facebook-calculator.php #FBDebate

5X Increase in Sharing with Facebook Connect #FBDebate

Today retailers and brands are integrating facebook into their on-site experience; open commerce #FBDebate

Evolution of Facebook Integration1-way On Facebook You are2-way (likely) here On Facebook & lightly on-site (Like/share count) On Facebook & Facebook- powered on-site profilesOpen Personalized commerce experience (Facebook + native data) #FBDebate

2: Multi-directional Like Integration #FBDebate

3: Facebook-powered Profiles/Community #FBDebate

3: Facebook-powered Personalization #FBDebate

Integrate Facebook Connect now in a meaningful way #FBDebate

Facebook; THE consumers’ community of choice•  The case for commerce is emerging. It’s early days•  Ecommerce sites should take steps now and give customers the option to connect via Facebook, to build a Facebook-powered profile and lay the foundation for future innovation•  The Facebook UI will rapidly improve to leave room for commerce and community to beautifully coexist•  Facebook is a Net New source•  Facebook is complimentary, not replace traditional ecommerce programs•  Facebook on Site•  The greatest opportunities for Facebook commerce exist outside the walls of Facebook, on ecommerce sites where consumers are comfortable making purchases•  On-site Facebook integration will be most useful when merged with native customer data (e.g. order history, customer reviews) #FBDebate

The Great Debate: F-Commerce Opportunity Summary Opportunity for Commerce Sucharita Cathy On FacebookFacebook AdsFan StorefrontsBrand Communication (company updates in stream)Friend Recommendations (Like, Share, Reviews)Email (inbox moves to Facebook)Search (Facebook as a search engine) Off FacebookSharingFacebook Registration (profile based on Facebook data)Personalization (relevant experience based on Facebook data)Social Insights (extract trends, identify influencers, etc.) #FBDebate

Thank you.@PowerReviews@CathyHalligan@SmulpuruTo learn more about the PowerReviewssocial commerce suite, please contact:info@powerreviews.comPlease take a moment to complete our briefsurvey at the end of Q&A. #FBDebate

Webinar: The Case For and Against Facebook Commerce

by PowerReviews on May 16, 2011

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Webinar: The Case For and Against Facebook Commerce — Presentation Transcript

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