Why is this important?
- Facebook is the largest social network in the world with 600 million users.
- Over half the UK population has registered for Facebook
- 1 in 6 page views in the UK were on Facebook
- Facebook accounts for c. 10% of all traffic driving to other sites. (source)
- Read 10 Facebook stats brands cannot ignore.
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Who is this relevant to?
Any brand offering selling on the Internet
The launch of of Facebook Commerce allows brands to open stores directly in Facebook.
Coupling the size of the audience and the potential to purchase products in Facebook and with Facebook credits opens up such a big opportunity for all brands that this cannot be ignored.
Facebook and Brands
Facebook Fan Pages have been the ‘home’ of brands in Facebook for 18 months. Smart brands have been using these fan pages to build communities of brand ambassadors and drive traffic and sales to their website. The launch of F-Commerce allows brands to build full e-commerce shops within Facebook.
F-commerce is simply the commerce function to allow consumers to buy products and services without leaving Facebook. In the first instance this was selling products on Facebook using the existing ‘back end’. Brands such as ASOS is one of the first brands to offer a fully stocked shop within Facebook. Other smaller brands are offering shops powered by third party providers like Payvement.
The consumer can now interact with, and shop with the brand without leaving Facebook.
Facebook credits is a virtual currency that can be used in Facebook to buy virtual and real goods. Games like Farmville accept Facebook credits and Warner Brothers now allow you to rent movies (in the USA) paying with Facebook credits.
The challenge with ‘old’ F-commerce (as displayed by ASOS) for the consumer was the need to still find a payment method. With ASOS I can take the purchase all the way to the checkout, then I need to pay with a card or Paypal and sign into my ASOS account.
The evolution of f-commerce will allow me to purchase products within Facebook using only my Facebook account and the credits I have access to.
I can currently buy credits online, using credit card or PayPal or offline in Tesco and Game stores.
The ability to buy Facebook credits over the counter opens up f-commerce to an audience that may not buy online due to credit worries or personal financial circumstances.
Warner Brothers – Movie Rentals
This week, Warner Brothers in the US started to offer movie rental within Facebook. In three clicks any consumer can like the fan page, pay for the film with Facebook credits and watch the film for 48 hours. No further sign ups or confirmations. Click, buy, watch.
The future Facebook Economy
The biggest opportunity with Facebook credits is to build a virtual economy within Facebook. Imagine your audience earning credits playing Farmville that can be spent in your Facebook store. Or, you offer incentives of your own. Encourage them to share your brand with their friends for a chance of winning a Facebook shopping trip.
All of these elements are possible in time.
At present the ASOS store offers the full ‘shop window’ and the ability to purchase. However, at point of purchase one needs to log in or register with ASOS and pay with credit card or PayPal.
The Percentage Problem
Facebook takes up to 30% of the credit value. This is far higher than credit card transaction costs and will be a major barrier to entry. The future may be that Facebook’s domination allows them to hold this position encouraging retailers to consider their pricing or the rates become flexible.
With Facebook increasingly being used on mobile devices, the Facebook credit economy could soon fuel purchases of real world items. Read NFC and the mobile wallet for more.
How you get can into f-commerce
As a consumer, purchase some Facebook credits and see what you can buy. Try a Zynga game like Farmville for virtual currency to start with. Look at the ASOS Facebook shop as an example of how you can buy within Facebook, but not with credits yet.
As a business, ensure you are at least have a Facebook page up and running. Look at 3rd party commerce providers like Payvement that will enable you to set up a shop very quickly. In time you will need to look at more bespoke solutions but this will get you started.