Facebook Deals is the new service from Facebook. Put simply Deals puts retailer- or brand-driven promotions into the hands of customers who disclose their location by "checking in" at a venue.
Checking in is accomplished by connecting your mobile phone's GPS location capabilities to a directory of venues' locations. When a Facebook user gives her location, Facebook can not only connect that location to a venue (the existing Places service) but can now direct a 'deal' or offer to that user.
So much, so Foursquare (the location-based service that allows users to 'check in' to venues). Also there are echoes of Groupon, but this is no clone monster designed as a me-too service. Rather, FB Deals builds on a the growth in mobile use of Facebook, the desire of users to 'connect' with a brand or retail location, and the interest of retailers in connecting with those customers who are present and thinking about them.
The interest for retailers lies largely in the Facebook ecosystem, it's "friend" focus and the analytics available. Some benefits include:
deals can be unlocked when, for example, TWO friends are together (an example being YoSushi's offer, that gives some free food where two friends check in to eat together. This is a means of new customer acquisition, rather than simple rewarding habitual customers for checking in)
when customers check in the retailer can access rich information about them from their Facebook profile - gender, age, aspects of their social graph and shared information. This can supplement customer insight programmes and assist in future targeting.
the service is, according to Facebook, free of commissions and charges to the retailer.
Joanna Shields, VP EMEA at Facebook, noted "Facebook is built around people and sharing personal experiences and Deals is a great extension of this. By bringing valuable and relevant offers to you wherever and whenever you want them, Deals delivers a powerful experience that combines technology and location in a way that a pure online or offline experience could never deliver".
Some retailers 'in' on the launch include Argos, Benetton and Debenhams. Both Argos and Benetton are offering charity donations in return for checkins by customers. This could demonstrate that the back-end systems to create and manage promotions are not yet in place, or that they're taking a 'marketing promotions' approach in the early stages. Debenhams have an offer for Valentine's Day, where up to 1,000 mascaras will be given to the first 10 people in each store who check in.
Harriet Williams, Head of Digital Development at Debenhams, noted:
“With over 60 per cent of our customers active on Facebook and 164 Debenhams stores across the UK, we predict a rush of keen shoppers will be checking into our stores and checking out our deals”
I caught up with Jim Clear, eCommerce Marketing Controller at Argos at the launch event and asked him about Argos' involvement. In this video you can hear the buzz at the launch, and so we apologise for the background noise!
We expect that, given the phenomenal reach of Facebook, especially on mobile, that this offering will be a popular one, building as it does upon customers' established behaviours of sharing with friends and checking in via Places.
The test for retailers will be the ease of management of the deals, integration with promotional engines and campaign management, eCRM integration - and not least, whether smaller retailers will get access to the scheme.
Here, then is a test and opportunity for others in the sector. Foursquare, despite the protestations of Facebook, must be looking to Europe with concern. Their adoption rate has been hampered by a lack of 'on the ground' commitment and furthermore no investment in retailer and deal development. Perhaps with Facebook Deals garnering the attention their task will become easier, we would be concerned about their ability and commitment to engage.
The directory players, for example our own Yell.com, have been looking at the 'local' and offers market for a number of years, trying to balance their sales reach with customer adoption and the willingness of small businesses to 'administer' their offers. With Facebook stealing a march at the 'top end' of the market, I wonder whether there's an opportunity for directory players to use their field sales forces and telesales agents to sign up small(er) businesses and - at a stretch - act as their sales and promotional agency to manage the interface of offers into Facebook? We'll be interested to see whether Facebook opens an 'agency' or 'intermediate' API to enable this.
All of these questions will be answered in time, but as of today Facebook has added a further reason to spend one's life glued to a mobile phone, and retailers have a further promotional channel to exploit.
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