ANALYSIS What can Facebook, 10 years old today, offer retailers?

Ten years in, and the question of what Facebook can do for retailers is still being debated.

Many have started and abandoned Facebook shops; the site’s business-promoted Sponsored Stories proved controversial, provoking a class action from Facebook users miffed that they were being used to sell goods without permission – or pay. All in all, we could be forgiven for deciding that F-commerce was very much over.


But while selling directly through social media sites such as Facebook may not generate the highest sales, social media clearly plays an important role as a forum for spreading word of mouth about brands and products. Adobe’s recent Social Media Intelligence Report found that in the fourth quarter of 2013, Facebook, Twitter, Pinterest and Tumblr drove more traffic than ever to retail sites. Facebook alone referred 72% more visits than at the same time in the previous year, while the other, perhaps less mature, sites saw higher rates of growth.

Carol Dray, Play.com marketing director, says Facebook is now becoming more important to retailers than ever before.

“In the last 10 years Facebook has turned from a university social network to a powerful platform for commerce,” she said. “Now it is truly driving sales; Rakuten’s Play.com has found that customer visits from Facebook are worth 40% more than an average site visit. With over 1.2 billion monthly users Facebook has shown that it has the potential to connect retailers large and small with customers around the world and to build loyal customer communities.”

Data is key, argues Dray, the big Facebook benefit. “Brands who will benefit from Facebook the most over the next 10 years will have more detailed insight about their community,” she said. “For Rakuten’s Play.com, shoppers are 40% more valuable to us once they hit the ‘like’ button, but with access to even more information retailers will be able to understand how and why a consumer began interacting with them on Facebook – and therefore what will keep them engaged. Whether they made a purchase, read about your brand online or are just a fan of the products, knowledge of what attracted them to your community will give the retailer power to offer them the correct goods in the correct way every time.

“It’s not a numbers game, it’s all about engagement. Imagine being able to engage your Facebook community through specific ‘Facebook rewards’ gained by the interactions they make with your brand? By offering discounts and exclusive deals in return for engagement Facebook could develop lucrative loyalty schemes for retailers. Not only does it become an incredibly powerful marketing tool but it incentivises brand engagement massively.”

What’s still perhaps less clear is how Facebook can earn money from that.

That looks set to change. KPMG’s Malcolm Marshall argues that the social media revolution is only just starting.

Marshall, who is head of information protection and business resilience at the business adviser, said: “In the last 10 years Facebook has grown to 1.2 billion active users, with a revenue of $7.9 Bn in 2013. Big numbers, but also just $6.50 of revenue for each active user. So the question for me is: how can we help users get more from their social media and really grow the market?

“For me the market is only just beginning to mature. As it grows we can expect users to become far more savvy about the value of their information, and the return they demand from offering a window into their lives and hopes. Privacy is ultimately a personal choice, but that needs to be an educated choice, with more transparency about the trade social media platforms offer users between their privacy and the marketing or provision of tailored services. Society will debate people’s rights over their data, and rightly demand market models which allow users to share in the value generated from that data. All of this must be founded on trust between users and social media providers.”

Patrick Salyer, chief executive of connected consumer management Gigya, points out that as well as remaining the world’s most popular social media platform it’s also the leading provider of the social logins that are used to sign in to websites, including retail sites.

He adds: “Our research has found that Facebook accounts for 51 per cent of all social logins, significantly ahead of rivals like Google+ and Twitter. On mobile devices, Facebook’s lead is even more pronounced, as it accounts for 63 per cent of all social logins.

“As Facebook continues to innovate its mobile business, identity will be a crucial component of its strategy to keep users engaged for the next ten years.”

What Facebook can do for retail

Tips from Carol Dray, marketing director at Rakuten’s Play.com.

Show the value of engagement

Once you’ve got a ‘like’ from a consumer the next step is to get them engaging with your content and show them the value of being in your ‘club’. If they engage with you regularly this keeps your brand prominent in their news feed and extends your reach to friends within their network too. Use incentives such as competitions, an offer of free delivery or a discount in return for being in your community and interacting with your brand. Incentives also provide a clear call to action so that members of your social community are more likely to go on to make a purchase.

Treat your community like your friends

Don’t oversell – treat your community as you would your friends. Rather than making it a sales channel, think of Facebook as a place to showcase your brand’s personality. Share relevant posts and entertaining content to retain fans and foster their loyalty. Make posts visual and exciting; funny photos or videos are much more likely to be shared amongst their wider network than content which is just a sales plug. Ensure that all of your content is worthy of sharing and don’t post it if it’s not.

Extend great customer service beyond your store

The power and reach of the Facebook community means that your customer service offering must be watertight. Monitor complaints from your community at all times and handle any unhappy customers with care quickly and effectively. Reply in a timely manner to posts asking whether you can message the customer privately and work to take discussions out of the public eye as soon as possible.