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IRUK Top500 The Customer Report: 2018

IRUK Top500 The Customer Report: 2018

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GUEST COMMENT The power of ‘like’ – is Facebook-commerce a farce?

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by Philip Rooke

comScore’s recent report (The Power of Like Europe: How Social Marketing Works for Retail), illustrates the benefits Facebook can have for retail brands. However, it seems Facebook-commerce (F-commerce) expectations are out of sync with most brands and the market’s capabilities. This leads to controversial debate where some retailers see enormous growth opportunities others see huge effort for no return.

In fact, the problem is in the evolution of communication within the medium, shops on Facebook only work as part of a social media strategy. And most brands are not sufficiently evolved in their social communication to make them work.

Thus F-commerce has become a contentious topic. Expectations and reality do not fit together and protagonists blame the medium not the messages. Consultants Booz & Company predict global social commerce sales will be $30bn in 2015. But in fact, retail giants like the Gap, JC Penny and Nordstrom have closed their Facebook shops. A recent study by W3B suggests that only two percent of Facebook users have purchased through the social network.

Is f-commerce already dead? Is the hype is already over before it’s really started? On the contrary, it is part of the process to eliminate teething problems. The failure in fact is caused by misunderstandings and it is in part, a structural communication problem.

Expectations of fans versus claims of companies

While social media marketing managers dream of loyal customers who suck up new products and passes it on to 140 friends. Fans are actually only on Facebook for a virtual beer or to share holiday photos.

It should not surprise then that current responses are limited to “quick wins” such as deals. But brands can be successful if they enter a genuine two-way conversation with fans.

Commerce versus culture

Sticking to the image of Facebook as a bar, people do not want a sales pitch in a bar. However, business and deals are done in bars. It’s just a different type of communication and sell. Not a hard sell but gaining trust, comparison of needs and benefits in a more relaxed way. Recommendations in the bar, or on Facebook, tend to be initiated by the buyer not the seller. Therefore brands need to provide their customers with something they want to be seen with, something they have had a hand in creating. Turn them into brand champions and enable the conversation to start.

Theory versus payment practice

In the end it's all about money. Facebook credits are good so far, perhaps for virtual goods and micro-payment. But does the average consumer want another currency? Other checkouts are not integrated to Facebook registration and so further logins are necessary. This conversion killer leaves consumers going out of Facebook to shop.

What is there at the end?

You might be discouraged at this point and stop reading – but hang on and stay tuned. The conditions are right for f-commerce. Facebook still has a very high, loyal and active user base. If you have customers it is very likely that your customers are there. More are now buying from the living room. For many of them Facebook will be one of the most important starting points.

And, yes, many people talk about brands, recommend products, share shopping experiences on Facebook. Some brands are doing well but they have adapted to the environment. Communication is the key. Every medium has had to develop the right communication style.

When F-commerce works in practice, it is due to the relevance of the product and communication to the user’s current interest. F-commerce is more than the pure sale: the point is to activate fans, include them and create a presence on Facebook through their news stream. Store offers and news stream have to be combined editorially.

Conclusion

Facebook functions according to the laws of Facebook users, not to those of traditional retailers. Just being there is not enough. You need a lot of staying power, good ideas and to develop the right language. It is all about the fast, action-oriented relevant sales.

Philip Rooke is chief executive of Spreadshirt.

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