FIRST BUILD: In 2010, US retail ecommerce sales (excluding travel) rebounded from the recession, posting 14.8% growth, compared with only 1.6% growth in 2009. In 2011, online sales will reach $188 billion, but growth will drop to 13.7%, resuming a prerecession trend of slower growth that signals a maturing sales channel. Still, online sales are expected to rise by over $100 billion from 2010 to 2015. SECOND BUILD: More Americans now get news primarily from the Internet over traditional news sources; 83% have purchased online the number of 18-29-year-olds citing the Internet as their main source of news has nearly doubled since 2007. Even more pressing to marketing leaders purchase intent is influenced more t han ever by both positive and negative online reviews . Three major developments will spu r this growth: mobile commerce, social commerce and daily deal sites. LIKE: One thing is certain: social business is no longer optional. Q2 2011 U.S. retail e-commerce spending grew 14 percent over the year prior, to $37.5 billion, according to comScore . It was the seventh consecutive quarter of year-over-year growth. eMarketer credits social commerce, mobile commerce, and dai ly deals sites with the continued growth of the online retail space. They predict o ver $100 billion in annual online retail sales by 2015.
FIRST BUILD: Amazon is the undisputed leader in e-commerce, raking in over $40 billion annually Mike Fauscette , an analyst at research firm IDC, has an even bolder prediction: In three to five years, he suggests, 10 percent to 15 percent of total consumer spending in developed countries may go through sites such as Facebook. On Facebook transactions that are “fueling FB commerce” Open - Graph --- this Frictionless Sharing ---- that ’s what’s earning Facebook it’s early wins!!!! SECOND BUILD: AS of TODAY: Facebook deals GONE Facebook Deal check -ins GONE WE ’LL TALK ABOUT FB CREDITS LATER. FACEBOOKSTOREFRONT - WE ’LL TALK ABOUT LATER FRICTIONLESS SHARING: Open graph allows third party apps to include arbitrary actions and objects user: WATCH, BUY, LISTEN, read - news item, movie, jeans, song shows up on my NEWSfeed, timeline and Ticker SO EVERYTHING ACTION THAT YOU TAKE IS NOW RECORDED BY FACEBOOK LIKE: THESE NEW FEATURES, AS A WHOLE SEEM TO BE PAVING THE WAY FOR THIS TRANSITION
By telling you exactly what I ’ ve done, Facebook is piquing your interest to click and interact.
Viddy ‘’’ the instagram for video
First build: “ On July 1, 2010 Facebook began requiring social game developers to use credits as their form of payment on Facebook, and Facebook takes a 30% cut of all Credits purchases, ” Overall, virtual goods make up a $1.6 billion (and growing) market in the U.S. alone, and the vast majority of that sum lies solidly in social gaming, the stronghold of Facebook Credits. SECOND BUILD: Total revenue for last year was $3.7 billion, Facebook's filing said, representing a near doubling of 2010's revenue of $1.97 billion. $4.27 billion this year. LIKE: GOOD FOR Facebook, it ’ s realizing revenue. TITLE BUILD: However, on the credits side --- the conversion has predominantly come from Games. -- 3% from other sources Facebook lists its relationship with Zynga in its risk factors section of the S-1:: “ If the use of Zynga games on our Platform declines, if Zynga launches games on or migrates games to competing platforms, or if we fail to maintain good relations with Zynga, we may lose Zynga as a significant Platform developer and our financial results may be adversely affected. ” “ We believe that Credits can and will fund a variety of monetary interactions on Facebook beyond social games, ” eMarketer analyst Debra Aho Williamson told VentureBeat. “ Ecommerce is one example, as is buying access to media such as TV shows or movies ”
FIRST build: FB made it clear that it wants to turn its virtual currency into a payment mechanism for all sorts of digital goods. SECOND BUILD: Warner started testing: they would allow Facebook users in the United States to rent the film “ The Dark Knight ” directly on the Page Like other Hollywood studios, Warner is racing to figure out how to deal with three significant problems: 1)piracy and 2) plummeting DVD sales, both of which are growing worse as broadband access spreads across the globe. The industry ’ s best hope for a solution is to make more content available for digital purchase on more platforms. 3) But Hollywood is also fretting that certain delivery systems — particularly Netflix, with its rapidly growing streaming service — are becoming too powerful. If Warner ’ s go-straight-to-the-fans Facebook experiment is successful, it could be a way of skirting those middleman distributors. For now, Facebook is hardly a rival to online movie rental services, and it is not clear if the company plans to become one. It did not specifically help Warner and has not signed a licensing or distribution deal with the studio. DID NOT HAVE A HOLISTIC SOLUTION THAT WOULD BE EASILY ADOPTED BY USERSAnd even if other studios follow Warner ’ s lead, Facebook lacks a feature for users to find movies. UNLIKE
FIRST BUILD: FOR FB, THE CREDITS are systemic of this notion of a an ever expanding walled garden. Autocracy: for of gov ’t. Autarky is the quality of being self-sufficient. Usually the term is applied to political states or their economic systems . The latter are called closed economies. SECOND BUILD: this statement says it all. The idea of Facebook Credits is to provide a virtual currency that works only within the boundaries of Facebook. You can purchase Credits for $0.10/Credit, though you can ’ t currently sell them back to Facebook for dollars. Why is this a good idea for Facebook? Why don ’ t they just use cash, or a service such as PayPal or Amazon, to manage payments? The secret is in the fact that you can ’ t turn Facebook Credits back into dollars when you ’ re done with them. What Facebook wants to do is to wall off your money from the outside world — to turn it into a currency that can only be used inside Facebook. That way, you ’ ll be forced to buy products from within Facebook, expanding its market and driving up demand within the closed ecosystem. TITLE BUILD: read and UNLIKE: For Facebook, the benefit of this sort of system is the ability to control the flow of capital and goods inside the boundaries of the closed system. Also, there is the potential to manipulate the currency artificially
THAT WAS SHORT-LIVED --- THANK GOD SECOND BUILD: FB signaled its ambitions to grow as a payment platform, with changes to how its users can buy goods and services without leaving its site. This is a clear indication to Wall Street that FB is pushing to make more money THIRD BUILD: - in the past the service only allowed one time payment. - local currency important esp now that FB is a global network. What Facebook has said is that it hopes to give the users more flexibility and make it easier to reach a global audience who want a way to pay for your apps, games etc in their local currency. herre users will be able to plug in their credit card information once and store it in Facebook. But now, with one click they will be able to buy whatever is on offer, priced in their own currency. RIGHT NOW, there isn ’ t a whole lot to buy in FB except for Spotify (streaming music) or Milyoni (streaming movies) ---- monthly subscriptions Changes will begin next month.
FB STOREFRONTS 1) Last April, Gamestop Corp. (GME) opened a store on Facebook to generate sales among the 3.5 million-plus customers who ’d declared themselves “fans” of the video game retailer. Six months later, the store was quietly shuttered . Gamestop quote: “ We just didn ’ t get the return on investment we needed from the Facebook market, so we shut it down pretty quickly, ” Sheetz said in a telephone interview. “For us, it’s been a way we communicate with customers on deals, not a place to sell.” Gap (GPS) , which has 5.6 mill ion Facebook fans from its namesake, Banana Republic a nd Old Navy pages, opened a nd discontinued a storefront last year, said Liz Nunan, a company spokeswoman. T he San Francisco-based company also discovered customers preferred shopping on its own sites, she said. “ We will continue to evaluate if this is something we want to bring back in the future,” Nunan said in an emailed statement. From Gap: “I t was basically just another place to shop for all the stuff already available on the retailer websites ,” Gerten said. “I give so-called F-commerce an ‘F.’”
wait a minute, aren ’ t the millenials the ones leaving?
Other reservations or concerns highlighted in Pearlfinders interviews included: Lack of measurable ROI in social investment and hesitance to experiment and “ wait it out. ” Several expressed doubt that their target market would purchase through a social network. Most view social as a channel for awareness and brand building; they see potential for social commerce but are not yet willing to make it a priority. TITLE BUILD: If the attention of almost one billion potential shoppers is fixated in one place then opening a Facebook storefront must be the answer! While only 7% of brands with a brand page experimented with F-commerce strategies, many struggled to justify the costs of designing and supporting customized boutiques on an evolving platform that ’s far less standardized than the much more stable and proven foundation of e-commerce. EDUCATION is a key factor.
Delta Airlines ’ offering is not new, but it's marketed very well and taps into a channel it knows its customers are active on . Hence why it's still going strong. It allows people to search, book and pay for flights within Facebook – which it discovered was popular with its travellers as it's the most visited site from its in-flight wi-fi service. Not only this, but the app is ‘ portable ’ – and can be embedded in ad units on third party sites – creating a convergence of social networking, e-commerce and advertising. ODEON: This is not Odeon ’ s initial foray into Facebook. With over 50,000 fans, the chain already has a substantial presence on the social network with apps that allow fans to view movie trailers, win prizes, discuss and rate films. Odeon's transactional booking app In November, cinema chain Odeon launched its Event Organiser app, which enables users to select films, view screening times and purchase tickets from within the brand's Facebook page. People can also create a Facebook event around the film and invite their friends on the network to join, meaning they can coordinate cinema trips.
FIRST BUILD: In their rush to get on the f-commerce train, where did these major players fail? ” wrote Fazylev. “ What do SMBs know about engaging customers on social networks that has eluded their larger counterparts? Are SMBs the real innovators in social commerce? ” It ’ s a legitimate question. The fact is, SMBs seem to be finding sales where big brands are not. On the other hand, SMBs have far more to gain from tapping into the ready-made audience that Facebook provides. Rather than attempt to drive online traffic to their sites, or foot traffic to brick and mortar stores, SMBs can, and are, making the most of Facebook ’s own traffic.
AHH TIMELINE: Pages can no longer display one of their custom applications as their default landing tab that non-fans first see when they visit. T his powerful marketing feature let Pages set up a welcome app that teased special content like contests or coupons, but required users to Like the Page for access. Without default landing tabs, non-fans have to actively click through the little app tiles overshadowed by a Page ’ s cover. Imagine the investment brands have to create and develop custom apps --- all lost investmet. Many won ’t, and it will cost marketers Likes as well as email signups, contest entries, and other key performance indicators. The change is a noble one that prioritizes the user experience and the site’s long-term health , but several marketers I’ve talked to are already grumbling. [Update: This feature sunset isn't so bad after all. I've just learned from a source that default landing tabs only drive 10% of the total Page app traffic. 90% comes from published links and ads, which still function the same without the default landing tab capability. And when does Facebook make a change that doesn't cause some people to grumble? In the end, this is good for the user experience, it could only cause a maximum of a 10% drop in Page app traffic, and much of the way Pages use apps stays the same. Those most effected will be small Pages who rely on random inbound traffic, may have been duping unwitting users, and that are unable to pay for ads. This article has been significantly edited to include this perspective.] Facebook ’s goal was likely to make Pages more about storytelling than product selling. And it worked. Pages look beautiful, and they don’t feel like billboards or smarmy marketing shills. Users won’t be fooled into thinking they can’t post to a Page’s wall or view its info or photos without Liking first. Their first interaction with a brand will be seeing its organic content and what their friends are saying. That ’ s good for users, and it will keep Facebook a place people want to spend time. In the run up to its IPO, it ’ s commendable that Facebook is staying loyal to its users . But the death of the default landing tab is bad for aggressive marketers. It could confirm the fear of potential shareholders that Facebook won’t put them first, but then again, it might inspire more use of ads that those looking to invest won’t mind.
More marketer restrictions: FB covers Covers may not -display calls to action or references to Facebook features such as “ Like this Page ” , -include purchase or pricing info such as “ 40% off ” or “ Download at our website ” , - include contact information such as web address. - ABSOLUTELY NO calls to action Rajaram says “ brands have been very positive [about the restrictions ] because they don ’ t want to be seen as overly promotional — it ’ s a turnoff . Previously, Pages could set a default landing tab that all non-fans would first see instead of the wall when they visited a Page. This is no longer allowed. Instead, users always see the main Timeline view and have to actively click through to custom apps. This means custom apps for your contests, promotions, games, media, coupons, and signup widgets may receive much less engagement from users who find their way to your Page.
An Associated Press and CNBC poll of U.S. consumers taken this month found that more than half (54 percent) of respondents said they did not feel safe buying products or services on Facebook, eMarketer reported. Only 8 percent said they felt extremely or very safe making purchases through Facebook. This reflects wider privacy concerns that users have with Facebook itself. The survey found that about six in 10 Facebook users (59 percent) in the U.S. did not trust the company, or only trusted it a little, to keep their personal information private. THIS is a HUGE concern that must be addressed if FB is to play in this arena FACEBOOK COMMERCE AND PRIVACY Privacy concerns related to shopping, particularly when it comes to a brand using personal information, is still on the minds of Facebook users. Yet not all shoppers are resistant to sharing personal information. The report cites an eight-month survey of 42 apps by Sociable Labs, which found that on average a majority (56%) of social media users granted permission when asked to connect to online retailers using their Facebook ID.
As in any commerce strategy, the customer journey must be defined. This isn ’ t just about Facebook. It ’ s about all emerging channels where customer attention becomes increasingly distributed. Moving forward, businesses must look beyond mere distributed commerce plays and design a syndicated commerce program where commerce is designed for each channel, taking into account the needs, expectations and behavior within each. Channels can of course point to a common hub, but what ’ s most important is that they ’ re holistic in the experience the deliver and that the outcomes are defined at the platform and at the overall commerce levels. Based on its research, eMarketer shares what it finds to be Facebook commerce best practices. Reproducing an ecommerce site on Facebook is not inherently engaging. Igniting passions fosters community naturally. Retailers should consider their style of communication. Listening is important and brands are encouraged to hear what fans have to say rather than pushing an agenda. Brands should match their strategy to the end goal. Multi-channel marketing is still essential even with Facebook at the center of the campaign. The report concludes with these predictions and recommendations. Facebook commerce will not see mass adoption overnight. Brands of all size can employ select social commerce techniques. Give fans what they want, but do not lose sight of strategy. Privacy concerns are valid and need to be addressed. Facebook is still a social space and should not be treated as just another marketing exercise. Interaction with customers is vital to maintain your business' social credentials. Don't let your business become just another faceless retailer. Remember that Facebook users talk to each other. The power of the shopper has never been greater, so treat them with respect or your business could suffer the commercial consequences. Integrate Facebook into your enterprises other activities. Today, retailing is all about delivering a seamless experience for the consumer.
As in any commerce strategy, the customer journey must be defined. This isn ’ t just about Facebook. It ’ s about all emerging channels where customer attention becomes increasingly distributed. Moving forward, businesses must look beyond mere distributed commerce plays and design a syndicated commerce program where commerce is designed for each channel, taking into account the needs, expectations and behavior within each. Channels can of course point to a common hub, but what ’ s most important is that they ’ re holistic in the experience the deliver and that the outcomes are defined at the platform and at the overall commerce levels. Based on its research, eMarketer shares what it finds to be Facebook commerce best practices. Reproducing an ecommerce site on Facebook is not inherently engaging. Igniting passions fosters community naturally. Retailers should consider their style of communication. Listening is important and brands are encouraged to hear what fans have to say rather than pushing an agenda. Brands should match their strategy to the end goal. Multi-channel marketing is still essential even with Facebook at the center of the campaign. The report concludes with these predictions and recommendations. Facebook commerce will not see mass adoption overnight. Brands of all size can employ select social commerce techniques. Give fans what they want, but do not lose sight of strategy. Privacy concerns are valid and need to be addressed.
The Future of F-Commerce: The Market Destination or Social Futiliy? Hessie Jones, June 29, 2012
E-Commerce is going to explode !As of 2011:• 179 MM consumers14+ research productsonline• 83% purchased online• 18-29 YO citingInternet as main sourcedoubles• 3 major sources ofgrowth: mobile, socialcommerce and dailydeals http://mncomarketing.files.wordpress.com/2011/07/usa-e-commerce-trend3.pdf
“It is widely contended that F-Commercetransactions will exceed Amazon’s annual sales over the next 5 years.” http://searchenginewatch.com/article/2172155/Is-F-commerce-a-Flop-Why-Retailers-Arent-Sold-on-Facebook
Vevo is pulling its music video content from Youtube and shifting to Facebook’s Open Graph!• 200% increase in daily registrations since the change to Facebook-only registration• 600 percent increase in published actions on Facebook from February to March• 130 percent increase in referrals from Facebook to VEVO from February to March• 60 percent of Facebook referral traffic comes from Open Graph stories
Viddy is attracting celebs like Snoop Dog since its integration with FB Open Graph!• Integrated with FB in February 2012• 1.5 million joined Viddy• growth from 60K to 920K MAU• 2X increase in average daily sign-ups with Open Graph• 9MM Viddy interactions on FB
“... If we fail to maintain good relations with Zynga, we may lose a significant Platform developer and financial results may be adversely affected”Facebook 2011 Revenues 3.7B• 85% from Advertising• 12% from Zynga http://searchenginewatch.com/article/2143126/Facebook-IPO-Show-Ad-Revenue-Increased-69-in-2011
Turn FB Credits into a payment system for all goods within Facebookhttp://www.nytimes.com/2011/03/09/technology/09facebook.html?_r=1
“An economy that walls itself off from the rest of the world is doomed to failure”“Facebook credits are exactly thatFACEBOOK CREDITS. They arecontrolled by facebook, can only besourced from facebook approvedlocations and are held onto yourfacebook account by facebook.xxx does not have the ability to dowhat you want as facebook doesntallow it.. If you go to the facebook faqsection on credits it specifically statesthat credits are not transferable toanother account...What you want wont happen becausefacebook wont allow it to happen.. ” http://forums.kixeye.com/threads/137415-Send-friend-fb-credits
“BREAKING NEWS: Facebook shifts approach to payments!”Changes encourage companiesbeyond game developers to sell theirwares on the Facebook platform:• Facebook users will be able tosubscribe to services that requiremonthly payments.•Users will also be able to pay forthings on Facebook in their owncurrency, rather than credits. http://forums.kixeye.com/threads/137415-Send-friend-fb-credits
“It (FB Stores) was like trying to sell stuff to people while they’re hanging out with their friends at the bar”“There was a lot ofanticipation thatFacebook wouldturn into a newdestination, a store,a place wherepeople would shop,”......It was basicallyjust another place toshop for all the stuffalready available onthe retailerwebsites” Sucharita Mulpuru Forrester
“Facebook is simply NOT the place where users want to go to buy things”??!!•Fans “like” brands primarily for one reason – special discounts and sales promotions.•Likes influence purchase likelihood among friends of fans.•Liking a brand’s page or product is often a post-purchase activity.•Demographic differences play a role, with Millennials being the generation most opento shopping on Facebook. •34% of respondents said they would never purchase anything on Facebook, •but nearly 20% already have
F-Commerce is not fully defined... at least for large retailers•Lack of measurableROI• Doubt targets willpurchase through asocial network• Social is largelyawareness and brandbuilding•Potential forcommerce is therebut not a priority SOURCE: CHRIS SCHAUMAN, NOKIA AND SOCIAL MEDIA, MARCH 2010
“From our (SMB) view, f-commerce is not only alive and well, it is thriving despite the fact that some big brands have stumbled.”Of the 140K storefronts using Ecwid’s app• 15% total SMB revenue came from Facebookstores• In Q1 2012, that figure rose to 17.7 percent• FB generated revenue increased by 40% in2011 Of the 100K sellers on Payvment • 37% of users selling exclusively through FB •60% confirm customers do not leave FB to make a purchase http://thenextweb.com/socialmedia/2012/03/19/while-major-retailers-shutter-f-commerce-stores-report-shows-15-additional-revenue-for-smbs/
Re Timeline: Facebook’s goal was tomake Pages more about storytellingthan product selling. And it worked.
“Citizens of the world, Your personal information is not your own” •54% of US consumers said they did not feel safe buying products or services on Facebook • 8 % said they felt extremely safe This reflects a wider concern: 6 in 10 Facebook users in the US do not trust Facebook to keep their information private.
The Future of F-Commerce? By All Accounts, the Future is Rosy:)• E-Commerce is an inevitabilty and social is alreadyan instigator. Text• By all speculation, Facebook is primed to lead thecharge.• Facebook is now serious as a payment platform thatbecomes truly “global” in nature.• Big brands are still figuring it out. Many are hesitantto step up to the market that is Facebook.• SMBs seem to be fuelling early success.• Timeline may not necessarily benefit the onlinemerchant in the short term but it mitigates user churn• Open Graph has significant impact on visibility andshareability•Data collection is a valid hindrance that must beaddressed.
“The customer journey must bedefined...This just isn’t about Facebook.... but about all emerging channels where Text customer attention becomes increasingly distributed” 1. Facebook is still a social space and should not be treated as just another marketing exercise. • Interaction with customers is vital to maintain your business social credentials. Dont let your business become just another faceless retailer. • Remember that Facebook users talk to each other. Treat them with respect. • Integrate Facebook into your enterprises other activities. Today, retailing is all about delivering a seamless experience for the consumer.
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