Social commerceshouldn’t replicate what already exists in other retail channels, says Wade Gerten, founder and chief executive officer of 8thBridge.
The company has powered some of the earliest successes in Facebook retail, so we asked Gerten to tell us what works and what doesn’t in social commerce.
What do recently shuttered Facebook storefronts — the Gap, Nordstrom’s and Gamestop — have in common? What did they do wrong?
First of all, they should be recognized as smart social commerce innovators.
They each learned far more than they’ll publically share and will be using it to their competitive advantage. If you compete with the Gap and haven’t experimented with social commerce you should be afraid.
The first not-so-obvious commonality is that all three worked with a now-defunct F-commerce company called Adgregate Markets to run their Facebook fan page stores. When that agency shut its doors I’d guess their stores did too.
The most important commonality is that all three simply opened another storefront from which customers could shop. Their key learning, others, and ours, is that checking the portability box alone wasn’t good enough.
More broadly speaking, selling on Facebook fan pages has not worked for four reasons, in order of growing importance:
4. Lack of trust: 82 percent of the 1,000-plusFacebook users we recently polled told us they were not comfortable using their credit card on Facebook. However, we believe this is a distant fourth in the real reasons people aren’t shopping on Facebook. These same results were seen 10 years ago when people were asked about shopping on the web. The trust problem isn’t Facebook, it’s newness.
3. Lack of interest: Most brands don’t want to sell their wares for 50 percent off to their most loyal fans. Without a strong call to action why would you buy something from a store on Facebook?
2. Lack of distribution. This sounds a little crazy given there are almost a billion Facebook users now. However, relatively few of us frequent brand fan pages. We spend most of our time on our Facebook home page checking out what our friends are up to.
Recent reports have also shown Facebook fan page post engagement dropping dramatically over recent months. We have far more friends on Facebook now and they are sharing more and more stuff every month. Best Buy, I’m sorry I didn’t respond to you when you asked me “which drink do I prefer in the morning, coffee or tea?” I didn’t have time and it’s none of your business unless you want to give me a deal on a coffee machine.
1. People drive social commerce, not brands. Facebook is about identity, self expression, and keeping up with real friends (not brands posing as friends); 90 percent of the Facebook shopping activity across all of our brands is friend to friend. Friends sharing things they care about, things you might like too, or things they’ve bought is where virtually all of the value is in social commerce. It’s all about pull.
Only 10 percent of the shopping activity originates from brands pushing you offers by broadcasting deals to their wall or publishing product catalogs on their Facebook fan pages.
You are far more likely to discover a new product or service from a friend than your are from a brand on (and off) Facebook. Even if you love a particular brand you’d still rather rather listen to your friends any day of the week than respond to a cleverly worded poll post from a social media manager.
How do those strategies differ from what 8thBridge offers?
8thBridge opened the original store on Facebook for 1-800-Flowers in 2009 and quickly learned to focus on the 90 percent… to empower people to share a brand’s products and offers with their friends. We fundamentally understand that people are in the driver’s seat for ecommerce so our software looks for ways to generate more sharing and advocacy.
Ironically, most of the customer conversations with brands still happen outside of social media. They’re happening in physical stores, ecommerce sites, emails, and call centers.
Brands use 8thBridge technology to convert these multi-channel interactions into sharing opportunities on Facebook. We help brands make it easier for people to express how they feel about a product or service to their Facebook friends.
Mostly, we give businesses a brand-sensitive approach to getting out of the way and letting their customers do the talking.
Most of us know that Facebook is in the process of rolling out an enhanced Open Graph technology platform and a new Timeline UI. These moves will dramatically increase the amount of sharing and self expression happening from existing commerce channels.
I have no doubt that this spring’s release of the new Facebook custom open graph will be looked back upon as the moment social commerce grew up and became a substantial percent of revenue. As seen by Spotify’s amazing results, this inflection point will be an overnight phenomenon for early movers.
8thBridge launched a beta example with Facebook of how open graph integration can drive advocacy in January for Ticketmaster. It uses social data to personalize the experience of buying tickets.
We are now in the process of launching many other innovative brands on our new multi-channel social commerce platform called Graphite. This is the most exciting time we’ve seen in social commerce since 2009!
What advice do you have for retailers’ Facebook pages?
This might be a tough pill for some to swallow but I think we’ve all spent enough money and energy tricking out our Facebook fan pages. Retailers and brands should be focused on integrating their brands into the open graph and driving User growth and spend less money on fan growth.
Even with the help of thousands of self-proclaimed social media experts, fan page management software, and sweepstakes galore, Fan pages have not produced meaningful sales.
In my honest opinionMH, retailers and brands should spend their cycles driving social engagement in their existing channels and then invest in Facebook ads to amplify the voices of their advocates on Facebook.