Neworld, Great relationships build great brands

F Commerce officially commenced in July 2009 when 1800 Flowers opened the very first storefront on their Facebook page. Since then, the growth of commerce on Facebook platform has been slow but steady.

Thats not surprising as many marketers ask if fans on Facebook are there to make purchases? Perhaps not quite yet but things like Facebook Credits and storefronts on Facebook are pushing the platform towards a more transactional positioning. Facebook is growing up but are users ready to grow with it?

Those brands who have jumped in since 1800 Flowers first started selling on the platform have chosen one of two routes. Some brands choose off the shelf applications, Vendor Shop and Owjo are two such Irish applications that allow brands to sell from a tab on their Facebook page. They come with social features that can draw upon the viral elements of Facebook.

Other brands have gotten more creative in how they approach sales on Facebook. Just replicating your website shop on Facebook is not going to prove very successful – you’re not giving people a reason to shop there. Think of it like a bricks and mortar store on a street you don’t usually travel down, what would make you venture down there? It’s certainly not something you can buy elsewhere.

Understanding how to make purchasing more social, fun and interesting for fans can be used to help drive sales. Not so long ago I posted 10 of the most innovative F-commerce examples which is worth reading to give you an idea of how brands are tackling the issue of F-commerce. Some are selling in the newsfeed, others are having flash sales or selling Facebook exclusive items as a way of luring in Facebook footfall. But whats it all heading towards?

A recent report from JWT delves into how F-commerce is perceived, by American and British males and females aged 20+. It looked at F-commerce from three perspectives – on Facebook, on a retailers website using Facebook Connect to log into it and bringing Facebook offline into real world shops.

Millenials to Drive F-Commerce

Michael Fauscette,an analyst at research firm IDC. He predicts 10 – 15% of all consumer spending will come through websites, like Facebook, within the next five years. After we do like to shop with friends. In the case of Millenials (aged 20 – 33) 74% like to shop with friends, 50% will post a status update when they find a product they like, 55% are more likely to make a purchase if a friend has recommended it online and 53% have asked the opinion of friends on Facebook about a purchase.

Security on Facebook

It might be millennial’s doing the driving, but marketers, brands and even Facebook have to be acutely aware of the needs and wants of Facebook shoppers, not just in terms of products but also in basics such as security and privacy.

8 out of 10 respondents in the survey  worry about the privacy implications of shopping directly on Facebook. Almost the same number don’t think Facebook is a secure platform to make purchases on, and 7 out of 10 respondents wouldn’t use an application on Facebook to make purchases for fear their data is being shared with 3rd parties.

Facebook Connect-ing Brands and Fans

Allowing fans to sign into a brands online store using their Facebook log in details sync’s their profile with the website. By allowing the retailer access to your likes, what your friends have liked the user can be shown personalised recommendations. In the survey 3 out of 10 respondents had logged into a retailers website using Facebook connect and 90% of those said they would somewhat or be very likely to browse the personalised recommendations. Millennials (ages 20 – 33) were more likely to find such personalisation useful at 51% with the average for all those surveyed standing at 46%. However this is counter balanced with a feeling of being violated on seeing personalised recommendations (at 56% of all respondents) or that big brother is watching (72%). It would seem even those who like personalised recommendations, don’t like them all the time.

Online Helping Offline Sales

Mobile apps, mixed with Facebook’s social graph can help real world sales. Just this week American Express announced a new Facebook application that sends users local deals based on their likes. In a world of Groupon clones this is a strong differentiator. In the JWT survey 67% of Americans and 45% of British respondents consult their social network while out shopping – providing more opportunities for marketers to bridge the real and virtual worlds.

It’s still early days for F-commerce, but as this report highlights, the millennial audience are more than likely going to drive it. They are more willing to share when making purchases, or seek opinions from friends. What can’t be ignored is the issue of security, it is the one constant in anything Facebook related, and all the blame has to lay at the feet of Facebook. It seems like every new feature or platform change comes with a new data leak or privacy concern. This will have to be tackled head on in order to deal with it, and even then users opinions will need time to change. However, with Mark Zuckerbergs insistence that everything be set by default to ‘open’, means this issue will never be properly tackled.

The research was conducted amongst 599 Americans and 412 British aged 20+, between May 20th and June 1st 2011. The full Social Commerce report can be downloaded here.