The best Facebook Commerce strategy is going off Facebook

| June 17, 2011 | 6 comments

Facebook commerce, or F-commerce, is the big buzzwords nowadays with analysts predicting that Facebook will drive more online sales than Amazon in a few years. While most of the current attention seems to be on Facebook storefronts, such as the ones just released by P&G, I believe online retailers will soon put their focus back on their own e-commerce sites when it comes to generating sales along the long tail of their catalog. Facebook may be a great place to promote a handful of marquee products, but when you have hundreds of thousands of products, Facebook prospects may be better served back at the farm.

The future of F-Commerce is off Facebook

Facebook’s Like button for websites is perhaps the most powerful long tail F-commerce enabler. It’s free and takes little technical effort to integrate across your entire product catalog. Whenever a Facebook member comes across a product with a Like button, a simple click makes them a “Fan” of that product, generating a Like Story in the News Feed of their friends. This is valuable as this free viral marketing channel not only creates band impressions, but also traffic back to the product page.

Spread the love

Depending on the amount of inbound traffic a product page receives, each product may only earn Likes in the single or double-digit range (although there are plenty examples of product pages with thousands of Likes). What’s important is the total number of Likes across the product catalog. These long tail Likes are very important because, other benefits aside, they each generate a high-visibility Like Story in the News Feed.

I would argue that for online retailers, Like Stories generated when Facebook members Like product (web) page are more valuable than Like Stories generated from Facebook pages. Consider these two Like Stories that appear in my friend’s News Feeds after I Like Dell’s Facebook Page vs. when I go to their website and like the XPS 15z Laptop.

If you were Dell, which message would you rather have me spread to my friends?

 

Joy in repetition

The other big benefit of Like Stories generated from the retailer’s website is that there is no limit to how many stories a visitor can trigger. Whenever I Like a product from an online retailer, a new Like Story is spread to my Facebook friends. Conversely, when I Like a Facebook page, that’s the end of my advocacy; it’s a single blip on the radar.

According to a February blog post by Blind Five Year Old, 28 % of the US top 100 online retailers have added the Like button to their product pages, and given the Like buttons’ rapid growth (10,000 new websites every day), I suspect the number to be higher now.

However, very few retailers have placed the Like button in prominent places on their product pages and are probably missing out on an incredible amount of free, viral exposure because of it.  (Good example of placement from Sephora, and here’s a no-no example from Dell where the Like button is buried below the fold.)

Once online retailers discover the strategic value of the Like button, they will re-design their pages to make the button as prominent as their own “Buy Now” button. At this point I predict online retailers will find that social traffic to their individual product pages drives sales more effectively than the traffic to their Facebook page. The implications for their media strategy should be significant.

That’s my 2 cents.

For my perspective on the Like Button’s cousin, the Send button, read Think Twice Before Implementing Facebook’s New  Send Button.

 

The best Facebook Commerce strategy is going off Facebook was posted on June 17, 2011 at 4:48 pm in ecommerce, Facebook, fcommerce, Open Graph, retail, Social Media and tagged as , , , , , , , . It was last modified on June 17, 2011 at 9:34 pm. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response or trackback from your site.

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  • Anonymous

    Good article Vidar.  I tend to agree that long-tail eCommerce is not ready for Facebook anytime soon.  I also think that social inputs to reviews and other areas need to become a lot more sophisticated before they are actually useful.

  • http://www.facebook.com/stohlman T.K. Stohlman

    Hey Vidar – you are right on. It’s about using the Open Graph as the “electricity” not as the “house.” Keep up the great posts! 

  • http://www.facebook.com/spirkee Derek L. Spirk

    Great blog..

  • DPA

    Vidar, I agree with 90% of what you have written here. First, let us bask in our agreements! The problem (as I see it) is that retailers are, by design HYPER-focused on closing THAT sale RIGHT NOW. However, what they misunderstand is that THAT sale is a part of a much larger process of awareness, consideration/evaluation (which includes social commentary, discussion, etc.) and then lastly commitment. Commitment online is typically expressed as a search query (of course there are others, but the Lion’s share of marketing dollars in retail is still PPC/Search.) Sadly, most retailers and their agencies cannot provide a deeper understanding of the full spectrum of influences that drove that search query — let alone the attribution and budget allocation needed to actually generate that specific search-conversion. Too often they simply accept the user as they find him/her as well as the large tariff that Google imposes to send that traffic to a retailer’s site. But the cost a retailer must bear b/c of PPC is not merely the cost of that click. It is the complexity of setting up the AdGroups, setting negative keywords, bid optimization, commissions as well as running SEO programs, etc. When these costs are tolled, this is a hefty price to pay that traffic. Does it pay for itself. Yes, but only to a point. Paid search is game of managing diminished returns.

    The Like / OpenGraph presents a remarkable and frightening shift for retailers and marketers. It suggests a rethinking their relationship to their end customers — AND their friends as well as how influence and purchase intent might eventually be driven w/in the Facebook ecosytsem. For those retailers prescient enough to take advantage of the OpenGraph, they will find an entirely new mechanism and pricing strategy for securing traffic to their shopping carts.Ok. Now here is where I disagree with you:”Facebook may be a great place to promote a handful of marquee products, but when you have hundreds of thousands of products, Facebook prospects may be better served back at the farm.”That would only be true if all Facebook were offering were Likes and News Feed Post Views. But there is a lot that is possible w/in the Open Graph that has yet to be exploited. We are currently suffering from a crisis of imagination, not a crises of technology. Agreed, a PDP (product detail page) might be the best way to merchandise and to upsell and cross sell. We have only seen the opening act to this process and I for one am very curious to see how this unfolds.Cheers.

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  • http://twitter.com/wpbandung WPBandung

    i really like your opinion. i have done research on this particular idea: f-ecommerce. Personallu, i see facebook is a good place to sell stuff. but it always better to have your own website

    that’s my opinion