Winestore uses exclusive fan offers to drive fan sales and lock in fan loyalty. One of their best offers was a free case of Stella exclusively for Facebook purchases – they sold 100 cases of wine within hours of launching the offer. Other exclusive offers for Fans included special mixed cases and free delivery.

Chris Small who heads up VendorShop Social, the Facebook store app provider that’s just received a $500K round of investment says, “Based on the experience of stores using the VendorShop platform, there are two key success factors for f-commerce – show your fans how much they are valued by giving your fans something they can’t get through other channels and remind fans regularly about your store and the products they can buy – you’d be surprised how often that is forgotten”.

“Don’t be afraid to fail. Fear gets in the way of innovation.” – Brooke Moreland

What comes to mind when you hear the term “fascism?” For Fashism.com founder Brooke Moreland, the term inspired a radical idea, that of bringing together a community of young fashion-conscious consumers who gather around the ideal that “we” is better than “me,” at least when it comes to making decisions about what to wear.

Sitting around a kitchen table one evening in 2008, Moreland and a few friends toyed with the idea of creating a site that addressed that need. Someone suggested the name Fashism – an amalgam of fascism and fashion – and it stuck.

Out of that informal meeting the die was struck for a website and mobile app that would allow members, using a smartphone, to take a picture of an outfit they were interested in purchasing, upload it to the site and get instant feedback from members of the community.

Moreland’s revolutionary idea was born of her our own shopping experience where she wanted to use mobile technology to garner the opinions of others about an outfit she was trying on, but couldn’t because no such app existed at the time. So, she decided to build one.

In explaining her concept, Moreland said, “We built an online community incorporating both mobile and web-based technology where people post photos of themselves and ask the community whether they should buy or wear an outfit, then allow the community to discuss its merits.”

Moreland’s vision for Fashism is two-fold: To give people confidence in their decisions regarding the way they look, and to be used as a discovery tool where community members can learn about new brands and fashions.

As might be expected, the user-base for Fashism consists primarily of teen-aged girls (25%) and young adult females, ages 18 -24 (40%).  ”Younger people are more comfortable sharing personal information online. They are unafraid of sharing images of themselves, or putting their real selves out there,” said Moreland.

When asked about the business model around Fashism, Moreland said, “We focused on utility first, with a view toward providing benefit to our users, believing that the money would come later. We didn’t perceive it to be a problem as our members come to the site with a purchase intent.”

Fashism does make money, however, via three channels: Affiliate sales, advertising and sponsored promotions with fashion brands. As one example, Moreland cited a prom season promotion with Lord & Taylor. “Signs were posted in prom shop dressing rooms encouraging girls to post their photos to Fashism and claim their prom dress. Doing so gave them exclusive rights to the dress on our website,” she stated. “If someone liked the dress, it would be pushed to the Lord & Taylor site where buyers could see dresses with similar attributes.”

So successful has Fashim’s community-driven concept been that the company is considering moving into other verticals, as well as incorporating an e-commerce layer itself. “We have a highly engaged audience consisting of users who want to buy stuff,” Moreland said.

When asked about mistakes made by the company during its evolution, Moreland said, “One early mistake we made was to do a big redesign where we changed a lot of things all at once. That caused confusion among members of our community.” Having learned her lesson, she added, “We try to make as few changes as possible, and those only incrementally. If our users don’t like it, we revert back to the previous version.”

Rule for the Revolution

Moreland’s ‘rule for the revolution’ to other budding social commerce entrepreneurs: “Don’t be afraid to fail. Fear gets in the way of innovation. Put yourself out there and be willing to take risks. Social commerce, especially where fashion brands are concerned, is still unchartered territory.”

#1. A Year in Social Commerce

#2. Say Hello to the F-Commerce Ecosphere

#3. Facebook Shares Worth $2.10 Incremental Sales, Convert at 10.9%

#4. All You Ever Wanted to Know About Group-Buy in 10 Infographics

#5. Who is the “Social Customer?”

#6. F-commerce: A First Infographic

#7. Why f-commerce? 1 in 11 Humans are There

#8. The Pros & Cons of Group-Buy

#9. Selling into the Sharing Economy: The Next Big Trend in Social Commerce? (3 infographics)

#10. Social Commerce & the Smart SoLoMo Consumer (2 infographics)

#1. Top 50 Facebook Stores, Top 20 Facebook Store Solutions
Published: March 11, 2011

Here are the top (most liked) 50 e-commerce enabled Facebook pages and the store solutions they are using – as captured by f-commerce consultant Steven Hall, from 150 hours of sleuthing with his research team (and then a little editing from us, adding in some omissions).

#2. F-commerce Statistics Roundup: Facebook Commerce by the Numbers
Published: April 4, 2011

You get the picture; f-commerce – Facebook-enhanced retail – is the new shiny new object for industry players and investors. But beyond the shine, spin and hyperbole – is there any early data to back up the excitement? We’ve compiled a list of statistics related to f-commerce.

#3. How Social Commerce Works: The Psychology of Social Shopping
Published: December 6, 2009

As a social psychologist, I’m interested in how social commerce works. Not for academic reasons, but for a purely practical reason. Understanding why it makes commercial sense to help people to connect where they buy and buy

#4. Speed Summary: Wired Feb 2011 Cover Story on Social Commerce
Published: January 6, 2011

February 2011 Wired magazine (UK edition) has a cover story on social commerce, by editor David Rowan and editorial assistant Tom Cheshire. The cover text – “What are you selling? Big Brands want to cash in on your Facebook friends: Ecommerce is over – Long live social commerce” gives you a flavor of what to expect.

#5. P&G Launch 6 New Facebook Stores: “Live Learning Labs”
Published: June 10, 2011

P&G have upped their f-commerce game, opening new Facebook stores for Tide, Gillette, Olay, Gain, CoverGirl, Luvs and Febreze. As with last year’s pilot P&G Facebook stores, P&G are outsourcing e-commerce heavy lifting; this time not to Amazon, but to PFSWeb’s eStore – an independent online retailer that exclusively sells P&G products.

#6. Speed Summary: HBR on Social Media & New Rules of Branding
Published: December 28, 2010

Harvard Business Review has a spotlight on social media and branding, with a stand out article by McKinsey, based on a global study of 20,000 consumers. In a nutshell, the article argues that many brands are spending their marketing budgets in all the wrong places, based on an outmoded “funnel” marketing model – and proposes an evidence-based alternative.

#7. F-commerce: Heinz Innovates with New ‘Tryvertising’ F-store
Published: March 8, 2011

It’s interesting and mildly ironic that with so many prestige brands jumping on the f-commerce (Facebook e-commerce) train that it is a grocery brand, Heinz ketchup, showing the world (in our opinion) how smart f-commerce is done.

#8. Simple Definition of Social Commerce (Updated January 2011)
Published: November 17, 2009

Social Commerce is a buzzword and it’s hot lexical real estate, evoking a fusion of two big digital trends of “social media” and “e-commerce.” As a result, social commerce means different things to different people, and it’s been the target of a number definitional land-grabs by businesses seeking to define the term based on what they sell.

#9. A Year in Social Commerce
Published: December 30, 2010

Well, what a year it’s been in social commerce. A year ago, the future was set to be social commerce. Today, the future is already here, it’s just unevenly distributed.

#10. New Group Buy WordPress Plugin: Opportunity for Brands, Businesses & Bloggers?
Published: December 13, 2010

The world’s favourite (and free) CMS (content management system) has Groupon’d itself up with a plugin that allows you to run group-buy flash sales and daily deals on any WordPress-powered site or blog. All you need is a PayPal account to collect the cash.

We especially like the idea that f-commerce should be about “value exchange” – i.e. know what value you want (sales, word of mouth referrals, advocacy, buzz, and new customers), and what value you will offer customers (exclusive deals, early access to a product, rewards for sharing deals with friends, or bonus content that doesn’t normally come with a product).  No value exchange, no f-commerce.  And no, convenience is not value – the Web is just a click away.

1. F-commerce, or Facebook Commerce, is a subset of social commerce, selling with and through social networks and social media – and comes in two flavours
   • Selling directly through Facebook with e-commerce applications: Delta, Discovery Channel, Disney (Tickets Together), Home Depot, JCPenney, Procter & Gamble, Starbucks, Walmart,  Sears, Warner Bros. films
   • Using social plugins to offer Facebook functionality on e-commerce sites (note also the recent trend of integrating Facebook functionality into bricks and mortar stores): GoJane, JanSport, Levi’s (Friends Store)
2. Facebook commerce operates on two levels. First, it appeals to your core audience, those who already “like” you or visit your site. If such a program is successful, then your existing customers will spread the word about their favorite products and recent purchases to their friends on Facebook, generating awareness and possible referrals from their friends who may not be your customers already.
3. Facebook commerce is especially well suited to event commerce – making products available for limited times or in limited quantities can be Facebook commerce, since customers will want to tell their friends – once they’ve snapped up the deal themselves.
4. Think value exchange – you want sales, word of mouth referrals, advocacy, buzz, and new customers, but what do customers want? Offer exclusive deals, early access to a product, rewards for sharing deals with friends, or bonus content that doesn’t normally come with a product.
5. Remember that whilst promising, Facebook Commerce market is small and experimental, just a part of the fledgling social commerce market: global social commerce revenues are predicted to grow from $5 billion in 2011 to $30 billion in 2015 (Booz & Co). IDC Consulting analyst Mike Fauscette predicts, “In three to five years, 10% to 15% of total consumer spending in developed countries may go through sites such as Facebook.”
6. Advantages of Facebook Commerce
   • Facebook Commerce can drive:
     • Customer Acquisition
     • Customer Loyalty
     • Customer Advocacy
   • Facebook Commerce can offer
     • Instant Personalisation
     • Speed and Timeliness
     • Targeting
     • Scale
     • Brand Building
7. 6 steps for creating a successful Facebook commerce program
   1. Define your objectives up front. Acquiring new customers? Launching a new product?  Converting your customers into advocates?
   2. The new KISS: keep it social, stupid. Avoid  putting a massive product catalog on Facebook without any social functionality.
   3. Check with legal.  the lawyers. To avoid potential issues like channel conflicts
   4. Consider scaling back. Offering fewer products for limited times, possibly with preferred pricing, can help motivate consumers to make an impulse buy. Consumers can also be your best curators. Give them a say in what you sell
   5. Try before you buy. Experience Facebook commerce yourself by buying from other brands already selling on Facebook
   6. Set up the promotional strategy. Advertise and PR your store, the “if you build it, they will come” approach has never worked in social media, and it won’t work for Facebook Commerce
8. The Future of Facebook Commerce
   • A narrowing of what gets sold on Facebook
     • Remarkable (newsworthy, exciting, inspiring) goods and deals
     • High involvement goods with personal significance for which people typically seek peer advice
   • Integration of Facebook Mobile (to extend relevance and reach) and Facebook Credits (to ease friction)

360i POV on Facebook Commerce

“We are expanding our capabilities in today’s rapidly growing social commerce environment. Social networking and mobile applications are increasingly becoming a part of our customers’ day-to-day lives globally, influencing how they think about shopping, both online and in retail stores. We are excited to have the Kosmix team join us to accelerate the development of our social and mobile commerce offerings." Eduardo Castro-Wright, Walmart vice chairman

“We are at an inflection point in the development of e-commerce... The first generation of e-commerce was about bringing the store to the Web. The next generation will be about building integrated experiences that leverage the store, the Web and mobile, with social identity being the glue that binds the experience."

We’ve been summarising the state of the f-commerce nation in the last few articles, and today we’ve put together a starter list of publicised f-commerce success stories from named companies for you…

Of course, the standout case comes from event ticketing site, Eventbrite, with some useful numbers (every social commerce initiative needs its own Tamara Mendelsohn), but there are others. If you have any examples of named f-commerce success stories – whether on-Facebook or off-Facebook (web-store, in-store), let us know, and we’ll add it the list.

• Ticketmaster: When a Ticketmaster user posts a specific event they are attending, or may want to attend, to Facebook, it generates $5.30 of direct ticket sales
• Eventbrite: Every Facebook share generates $2.53 in ticket sales  (DPS – dollars per share (ie RPS (revenue per share)) – or in shares to sale = 24 – i.e. number shares needed to generate a new sale (based on latest av. ticket price ($60))  24 shares generate 1 new purchase (and 11 visits to eventbrite.com)
  • In a recent update to their gold-standard analysis (by marketing director Tamara Mendelsohn), Eventbrite found some interesting twists in the dynamics of social commerce – they installed the Facebook “Like” button (the lowest-friction social sharing tool on the web) on pre-purchase pages, but on order confirmation pages they installed higher-friction but stronger “Publish to Facebook” tool.
    • Eventbrite found that a “Like” generated $1.34 in sales (thus 45 likes generates 1 new sale (av. sale price of $60))
    • Secondly, Eventbrite experienced more sharing post-purchase than pre-purchase (60% vs 40%), indicating that motivation to share is higher post purchase – despite being more onerous (for explanation, see here on loss aversion and the “endowment effect“.  Furthermore, the share rate varies pre- and post- purchase – the ‘Browsing Share Rate’ (pre-purchase) is 1%, whilst post-purchase (transaction share rate) was 10%.  People are 10x more likely to share post-purchase
    • Moreover, a post-purchase share was found to more impact than a pre-purchase one. A post-purchase share on Facebook drives 20% more ticket sales per share than a pre-purchase one.  The relevance of this for brands and retailers is that  post-purchase social commerce may well be more valuable than pre-purchase social commerce. (NB social commerce is defined by Eventbrite as “ the intersection of social media activity and eCommerce”
    • Also of note is that revenue per share varies by product category (not just price) – business events have high share rates but generate few sales, whilst music events have lower share rates but higher DPS ($12 vs average RPS $2.53)

• Incipio Technologies: Facebook is #2 source of e-commerce traffic, number of shoppers from Facebook adding products to a cart is 3X the average, final conversion rate among shoppers referred by Facebook is 2X the average (ShopVisible).
• P&G: Sold 1000 diapers in under an hour on its f-store
• Tesco: Generated £2m+ in-store sales with FB vouchers for fans
• RachelRoy: Third highest sales the day it ran a temporary ‘pop-up’ Facebook fan store
• Kembrel: 20% of all black Friday sales transactions were on Facebook with a 7 to 10% larger shopping cart than their dot.com website
• BabyAndMeGifts: 50% of online sales from Facebook (BigCommerce storefront)
• LiveScribe: ‘increase in revenue [unspecified] and customer awareness after the small investment of setting up a Facebook storefront (Storefront Social)’ (Marketing Manager Brett Kaufman)
• Ettitude: Aussie retailer has ‘logged sales‘ coming from Facebook (Managing Director Phoebe Yu)
• Chompon: Group / Flash Sales platform found RPS on Facebook = $14 of revenue, and RPL (revenue per like $8)
• Ticketfly: Online ticketing site found that as of Jan 2011, every Facebook share/tweet generated 3.25 tickets sales; Facebook is Ticketfly’s top referrer at roughly 9% of total traffic.
• Levi’s saw a 40 times increase in referral traffic from Facebook after implementing the Like button in April 2010 and has maintained those levels since. (source SearchEngineLand) Prior to deploying FB social plugins, less than 1% of traffic came from Facebook, now 40% comes from Facebook
• Outdoor sporting goods retailer Giantnerd.com saw a 100% increase revenue from Facebook within two weeks of adding the Like button.(source NYT)
• American Eagle added the Like button next to every product on their site and found Facebook referred visitors spent an average of 57% more money than non-Facebook referred visitors (source NYT)
• Children’s clothing retailer Tea Collection added the Like button to sale merchandise and saw daily revenues increase 10 times. (source SearchEngineLand)
• ShoeDazzle added the Like button to all of the products on its site and within the first month had thousands of likes for its top products.  ShoeDazzle now has over 1M likes (source SearchEngineLand)
• ShoeDazzle also lets people login to its site using Facebook, and Facebook-connected users were 50% more likely to make repeat purchases every month than average shoppers.source SearchEngineLand)

Insofar as traffic is a key variable (along with conversion and order value) driving sales, Facebook has released some general stats on the impact of social plugins on traffic generation (via SearchEngineLand)

• The average media site integrated with Facebook has seen a 300% increase in referral traffic.
• People who sign in with Facebook at The Huffington Post view 22% more pages and spend 8 minutes longer than the average reader .
• Users coming to the NHL.com from Facebook spend 85% more time, read 90% more articles and watch 85% more videos than a non-connected user.
• ABCNews.com, Washington Post and The Huffington Post are said to have more than doubled their referral traffic from Facebook since adding social plugins.
• The number of daily likes more than tripled, going from an average of 2,000 likes per day to over 7,000 likes.
• Daily referral traffic from Facebook to Metacafe doubled, going from about 60,00 to 120,000.
• Total Facebook actions (likes, shares, comments) rose to 20,000 per day.
• Video site, Metcafe, following four recommendations for getting a 3-5x boost in use of social pluging (below) saw the number of daily likes more than triple, going from an average of 2,000 likes per day to over 7,000 likes, daily referral traffic from Facebook to Metacafe doubled, going from about 60,00 to 120,000 and total Facebook actions (likes, shares, comments) rose to 20,000 per day.
  1. 1. Versions that show thumbnails of friends are used.
     2. They allow people to add comments.
     3. If they appear at both the top and bottom of articles.
     4. If they appear near visual content like videos or graphics.
  • Recommendation for Social Plugin Optimisation:

"In spite of the fact that hundreds of millions of people around the world have Facebook accounts, the ability of the social network to drive revenue for eCommerce businesses continues to remain elusive. eBusiness professionals in retail collectively report little direct or indirect benefit from Facebook, and social networks overall trail far behind other customer acquisition and retention tactics like paid search and email in generating a return on investment. For some companies and brands, Facebook promises to support branding and awareness (i.e., "top of the (marketing) funnel") efforts, but for most eBusiness companies in retail, Facebook is unlikely to correlate directly to near-term sales. A few pockets of success, however, have surfaced, and a cottage industry of vendors who can support these programs will inevitably burgeon"

Sucharita Mulpuru - Forrester

• The market opportunity for selling on Facebook is tiny - even the most enthusiastic projections forecast a market size only 1/3 of that of mobile commerce, representing a maximum of 4% of digital commerce

• Online shoppers don't want to buy on Facebook - the Booz & Allen report on social commerce found that 73% of online shoppers would not purchase goods on Facebook or through other social networking sites

• Facebook itself is an immature and risky platform - do you really want to be investing in next year's MySpace?

"Ditch your Facebook efforts and start thinking about mobile where the ROI is at least quantifiable..." Sucharita Mulpuru - Forrester

• Where's the money??? No major brand or retailer has yet provided compelling evidence that selling with/on Facebook unequivocally drives ROI or CLV (customer lifetime value)
• A recent WPP survey found that 23% of marketers said they were convinced that they were getting a good sales return on their social media investment, while 18% said they think their ROI is "average" and 9% described it as "poor." (see slides below)
• Where's the (independently verified) money??? There have been no independent research demonstrating the value of selling with Facebook - all data is from people with vested interests - companies themselves and their technology partners.
• Businesses find social networks to be the least effective new customer acquisition tool (Forrester Data - see chart below)
• From a purely practical perspective, designing a gold-standard customer experience in Facebook is an up-hill struggle, with restrictive and oft' changing formats and requirements
• Facebook is a people-centric forum, and whilst huge - a forum it is.  And the forum has been around since the 1970's - do you know any businesses that made money from connecting forums with retail?
• Facebook Credits is a non-starter for most retailers. This is the “currency” that consumers can use to buy, say, potatoes on Farmville. Facebook however has little to no credibility with respect to financial services among consumers and the same retailers reluctant to implement PayPal (which so many large merchants are) will be ten times more resistant to a less-tried, less-reliable, newer payment mark.

"The likelihood that Facebook will ever [become] a key sales-driving tool for retailers and creating a reliable revenue stream for Facebook, is unfortunately far-fetched". Sucharita Mulpuru - Forrester

• Nearly 60% of retailers agree that the returns on social marketing efforts are unclear. Retailers tell Forrester that Facebook fans don’t buy after becoming fans, they don’t click on the posts that retailers make, and no one visits or buys from the Facebook stores (unless that’s the only place where your merchandise is available)
• Only 7% of retailers say Facebook is an effective customer acquisition source.
• f-commerce will not take off because Facebook has a “reputation for apathy around privacy issues.” (Forrester)
• Adding the Open Graph protocol such as the Facebook Like button is useless for all but the very large companies such as Amazon - just look at your friends store on Levi's - pretty empty isn't it?
• In terms of driving e-commerce traffic, Facebook is failing, ads are getting more expensive yet driving ever less traffic

• When only 1% of site visitors come from a social media URL,it's difficult to take Facebook seriously as an e-commerce traffic generator
• While email marketing campaigns can boast an 11 percent click-through rate and a 4 percent conversion rate, Forrester's findings show that Facebook can only generate a 1 percent click-through rate, with only 2 percent of those people converting to actual customers
• According to a Goldman Sachs survey, Facebook has little effect on online shopping activity

• Overall, Facebook for businesses is more suited to generating insight, advocacy, loyalty and engagement -- but not sales.

What do you think?  Could this kind of technology change the game for TV (social) shopping?

[video type="vimeo" url="http://vimeo.com/21386019" /]

Against f-commerce:

• 63% vs 6% –  63 per cent of consumers visit a retailer or brand web site to make a purchase compared to just 6% who purchase goods through social media (according to a recent UK survey by ShopperCentric – see results below).
• Facebook is well adapted to marketing, but not selling – it’s a solution for promoting marketing messages and communicating brand personality, not processing transactions – “transactions will continue to be best processed through company web sites”.
• Enabling e-commerce on Facebook, when you already have an e-commerce solution on the open web creates redundancy – and is therefore pointless.
• The true future potential of Facebook is to act as a one-to-one ‘live’ communication platform that allows consumers to comment, ask questions and leave feedback – and get personal individual replies from the brand
• (The Shoppercentric survey (n-1000 – UK adults) also showed that the majority (54 per cent) of respondents said they think the reason that brands and retailers were present on social media was simply to sell more products, while 43 per cent also thought that they were there “because everyone else is”).

ShopperCentric Survey

For f-commerce

• Just because few consumers are purchasing on Facebook today, does not mean they won’t in the future.  The same argument was made about e-commerce a decade ago.  People don’t buy online, therefore they won’t.  QED.  Nope.
• It’s myopic to take current consumer attitudes and opinions as indicative of future adoption – think Henry Ford – ‘If I’d asked customers what they wanted, they would have said “a faster horse”‘.
• As industry leaders adopt f-commerce in local markets, such as ASOS and French Connection in the UK, others will follow. Facebook is simply “a platform extension to e-commerce”, limited only by internal policies and politics.
• Changes in Facebook software (from FBML to the use of iFrames) will make it easier for retailers and brands to open up store in Facebook. iFrame technology has three distinct advantages of FBML – allows for better design, better tracking and better e-commerce functionality.
• Improved facility for secure transactions (PayPal or VBV) are likely to make f-commerce more popular with consumers and vendors.
• In a consumer-centric model, it makes no sense to limit transactions to one digital destination – we should be helping customers buy where they want, when they want
• Facebook Deals approximates to Groupon’s proven and highly successful model.  If it worked for Groupon, why not Facebook? In the UK Argos, Debenhams, Starbucks and O2 are betting on it.
• Usability, security and privacy are issues with f-commerce currently, but the platform is innovating fast.
• The enthusiasm with which diverse brands and retailers are adopting f-commerce, points to a bright future for f-commerce.