Helping customers buy where they connect is one side of the social commerce equation. eMarketer has just released a report – Facebook Commerce: Reaching Shoppers Where They Socialize – that addresses questions every marketer should be asking when it comes to using the social network as a commerce tool:

  • What potential does Facebook commerce hold?
  • Who do online shoppers engage with brands on Facebook?
  • How can retailers and brands leverage Facebook commerce?

eMarketer responds to those questions by espousing its own point of view.

  • Facebook commerce is about more than just sales conversions.
  • F-commerce is more about discovery and sharing than duplicating an exhaustive catalog online.
  • Millennials are the prime audience for Facebook commerce.
  • Brands need to understand why they are “liked” and what to do with that information.
  • New advertising-friendly developments hold promise for Facebook commerce.
  • Privacy concerns will have to be addressed before Facebook commerce can see mainstream adoption.

Retailers are all over the map when it comes to using Facebook for commerce. Options range from product links being posted on the retailer’s Facebook page Wall to the inclusion of interactive catalogs or storefronts. On their own websites retailers are integrating Facebook’s Open Graph and social plug-ins to allow customers to login using Facebook to shop with friends, receive product recommendations or read reviews.

Though most major retailers have some type of presence on Facebook, a consensus has yet to be reached as to the social network’s viability as a sales channel.

The Potential of Facebook Commerce

The report states plainly that Facebook has yet to factor significantly into product sales and cites a Coremetrics survey of retailers that said only 1.6% of sales were driven by social media. However, it also suggests that F-commerce is in a nascent stage and that it is “too soon to predict” any outcomes at this juncture.

As can be seen from the following graph, the report does suggest that people are warming up to the idea of using Facebook for more than just social networking, especially where commerce is concerned. Finding special offers and discounts is the clear leader, followed by sharing experiences with products, seeking product advice and sharing product knowledge.

New ways social network users are using social media.

Facebook and Shopping Behavior

When it comes to Facebook users and shopping behavior eMarketer found this to be true:

  • 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 open to shopping on Facebook.
Citing an Oracle survey of North American Internet users, the report found that 34% of respondents said they would never purchase anything on Facebook, but that nearly 20% would or already have.
Internet users in North America who have purchased products via a retailer's Facebook Page, Q4 2011.

How Retailers and Brands Can Use Facebook

Facebook commerce takes two forms: on Facebook and off Facebook (i.e.. the retailer’s own website).  Specific approaches by brands include:

  • Fan Exclusives – Deals offered only on Facebook and nowhere else; examples of companies that tried this tactic include Diane von Furstenberg and Oscar de la Renta.
  • Sampling – “Tryvertising” of CGP products offered on Facebook pages; Burberry and Aveda are examples of retailers who experimented with this approach.
  • Gift Recommendations – Wal-Mart’s new Facebook app Shopycat shows products friends have purchased and makes recommendations based on interests.
  • Events – Pinning a campaign around an event, celebrity appearance or holiday works well on Facebook to quickly build excitement states the report.
  • Shopping with Friends – Levi’s and makeup brand MAC used the social graph as a way to encourage friend-with-friend shopping activity.

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.

US Internet users' privacy concerns related to Facebook commerce by generation.

Facebook Commerce Best Practices

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.

(Note: SCT’s executive editor Dr. Paul Marsden was interviewed for this report.)