O2 Facebook store: Future of f-commerce as consumer CRM?

UK mobile telco and broadband service provider O2 (part of European giant Telefónica) is launching a Facebook store to enable pre-pay mobile customers top up their accounts on Facebook.

It’s an initiative similar to the Starbucks card top-up store on Facebook, which allows customer to charge up their Starbucks mobile app (and rewards them for doing so), and then pay with their phone in store for all those tall skinny cappuccinos.

We think this is an interesting emerging third trend for e-commerce on Facebook – using Facebook stores neither as fan-stores offering fan merchandise and get-it-first offers of new products (Coke, Rachel Roy, Pantene, Heinz) in order to drive advocacy, nor full e-commerce stores designed to drive sales (ASOS, JC Penney), but more as a rudimentary consumer CRM/loyalty platform.

Caught between the barrage of statistics from f-commerce detractors and advocates, this third way may be an interesting option for retailers.  Rather than seek to  drive transactions, this kind of f-commerce would seek to grow the ultimate sales metric – CLV – customer lifetime value (CLV is simply the value today of the sum of purchases that have and will be made by an average customer – and can be increased by boosting purchase frequency, share-of-wallet and customer tenure).  If f-commerce can be used to drive CLV with loyalty-building offers and rewards, then f-commerce may evolve into a cost-effective consumer CRM or loyalty platform.

Our view is that fan-stores and ‘CRM stores’ may have a better prognosis than e-commerce stores on Facebook that simply replicate e-commerce off Facebook.


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