E-commerce's Next Wave: How Your Facebook Wall Could Become an Online Mall

E-commerce's Next Wave: How Your Facebook Wall Could Become a Online Mall
E-commerce's Next Wave: How Your Facebook Wall Could Become a Online Mall

Ah, the social phenomenon that is Facebook: It's where you banter with "friends," share vacation photos and "like" everything from your favorite classic sitcom or candy bar to your preferred political party -- so why not shop there, too?

Retailers are making it easier to do just that.

Chains such as Express (EXPR) and 7 For All Mankind now sell directly on Facebook, just as Walmart (WMT) is bringing its stores to life on the site, reaching out to consumers where they spend their virtual lives.

Retailers had already been racking up Facebook "fans" to build brand loyalty, establish a sense of community, spread the word about sales and events, and spark chatter about their merchandise -- so selling on the site is the next logical step.

It's not surprising, says John Squire, chief strategy officer with IBM Coremetrics, IBM's (IBM) marketing technology company.

According to October conversion rates, 9.2% of consumers who visited a retail site from a social media site made a purchase, Coremetrics' data showed. And Facebook accounted for an estimated 77% of all traffic from social networks, Squire says. "If you want to get new products discovered, this seems like a very good place."

Express Takes on F-Commerce

Retailers are banking on the premise that shopping on Facebook will appeal to consumers who don't want to pry themselves away from the social network.

Express made everything in its stores available for purchase on Facebook in April. Inventory gets updated in real time, and shoppers can pay without leaving the site. The apparel merchant, which has more than 600 stores, has a captive audience on Facebook, Lisa Gavales, chief marketing officer of Express, tells DailyFinance.

"It was very much about being where our customers were, and if they were in the mood to shop, they'd be able to do it very easily, on the site, multiple times a day," she says.

The difference between shopping on Facebook and the Express' e-commerce site is the social nature of the transaction, Gavales says. When a shopper has just purchased a striped lace T-shirt, for example, she can highlight that purchase on her Facebook wall for all her friends to see.

The social shopping model meshes with the habits of Express' target demographic, which has come of age sharing their private lives in public online spaces like Facebook, Twitter and Foursquare. "Our customer is 25, and she likes to get and give advice to her friends. It offers an opportunity to show what she likes, and what she thinks is attractive and fashionable," Gavales says.

Indeed, Facebook fans may unwittingly serve as brand evangelists. A thumbs up on that cool Express top from a Facebook friend, for example, holds more weight than a store advertisement or promotion, experts say. Taken to the extreme, "digital influentials," people whose opinions hold outsized sway on social networks, can boost -- or dampen -- sales based on their reviews.

Facebook commerce also offers instant insight about what's selling -- data Express can use to tailor its merchandise mix, Gavales says. "We know a little more quickly what will become a hit based on the 'likes' we're getting."

Fan-Generated 'Stores'

Like Express, upscale denim retailer 7 For All Mankind invested in Facebook commerce because for many people, the site has become an extension of themselves, says Barry Miguel, president of the chain.

Sponsored Links

"Instead of asking our fans to come to us at 7forallmankind.com, we are going where our fans are -- on Facebook," he says.

Seven For All Mankind's F-commerce page serves up an edited mix of the brand's collection, and is designed to make its fans feel like insiders. Sale items are exclusive to fans for two days before they show up on the chain's own e-commerce site.

But what's most unusual about 7 for All Mankind's F-commerce platform is a new feature that enables shoppers to buy products from a News Feed Store on their Facebook wall. Facebook fans can create wish lists to share with friends, which become personalized stores in the news feed.

Social commerce experts call the Facebook news feed the most valuable real estate in the digital space, akin to having an anchor store in an "A" mall. "The majority of the time spent on Facebook is spent on the news feed, so we felt that was an important component in our F-commerce efforts," Miguel says. "There is a viral component to the [news feed stores] that extends the reach of our brand message beyond people who are existing fans of the brand."

F-Commerce, Magazine Style

Urban Outfitters (URBN), too, set out to make its catalog shoppable on Facebook.

With the help of enter: new media, it launched a "magalog" on Facebook in August to tout its fall merchandise, the first of its kind, according to Curtis, the agency's president. Facebook fans can virtually flip through pages of glossy photo spreads and editorial content, roll over a picture of an item and pull up a product description. To make a purchase, users are directed to Urban Outfitters' e-commerce site.

The approach builds on the marriage of content and commerce, a trend bubbling up with new sites like Cladmen.com, an online menswear shop that features advice and product information from the editors of Esquire magazine, and gourmet food site Gilt Taste, which includes articles for foodies, and lush photography to help sell upscale culinary fare.

The retailer will soon launch its holiday magalog, Curtis says. Urban Outfitters declined to comment for this story.

Facebook Selling or Facebook Marketing?

Facebook's role as a retail venue is still a moving target. But Jeffrey Grau, a retail analyst with eMarketer, a digital trend analysis firm, bets that Walmart's "Facebook marketing" approach will resonate more with shoppers over the long term than selling directly on the site. "That's the real opportunity," he says.

In October, the world's largest retailer launched more than 3,500 store-specific Facebook pages. The new MyLocal Walmart Facebook app enables shoppers to track what's in the stores near them, offers locally relevant information on new products, and updates on discounts.

"Facebook is a treasure trove of personal information and consumer information, and retailers are finding out ways to leverage that, send people targeted offers, and even drive them to their stores," Grau says. Indeed, "Despite the wild success of e-commerce, 94% of all purchases are done in stores."

But it's not only traditional brick-and-mortar retailers that are experimenting with selling on Facebook -- the entertainment world is too, says Blair Heavey, CEO of Moontoast, which distributes social commerce platforms for artists such as Jay-Z, Rascal Flatts, as well as Sony Music Entertainment and the American Music Channel.

The company launched a store on Facebook last year to help pre-sell Reba McEntire's album, All the Women I Am, pushing items such as lithographs signed by the country singer, as well as apparel and concert tickets, and offering special rewards for fans.

Product sales from the Facebook McEntire shop outperformed other venues, Heavey says. "Entertainers can take advantage of impulse purchases by rewarding fans who have publicly declared they 'like' them through differentiated offers delivered socially," he says.

Get info on stocks mentioned in this article: