Source: http://www.usatoday.com/money/business/story/2012/09/24/facebook-commerce-a-hit-for-small-retailers/57838070/1
Most of what you hear about Facebook these days has to do with disappointment among investors or disappointment among companies advertising on Facebook. However, USA Today had an interesting article on an area where Facebook is having success: sales for small retailers that sell directly through the Facebook Store. Second quarter profits from Facebook stores were up 38% for the 180,000 small to midsize retailers and have been going strong since then.
It seems that small retailers are able to have success and drive sales through Facebook stores, since they have impassioned customers who treat small retailers as if they were a friend. Customers often visit the Facebook page of small retailers to see what new products they have, and often times even know the owners and feel a connection to the person posting on behalf of the store. Since customers are already visiting the retailers page, it's easy for them to just click and buy through the Facebook Store.
The success small retailers are having is not being seen by large retailers. Old Navy and The Gap have recently closed their Facebook stores, while J.C. Penny is holding out hope that they may eventually experience some success.
It's kind of ironic that these large retailers that put many small retailers out of business by pushing low prices and product availability, are now seeing their lack of an impassioned customer base coming back to haunt them in at least one area. It will be interesting to see if any of them try to start implementing a CRM strategy to get move visits to their social media pages, and engage more with their customers.
What will also be interesting to see is how these passionate customers react when one of the small retailers grows into a large retailer. Will they see their customer base become less passionate and Facebook Store sales diminish, or will they be able to grow Facebook Store sales in tandem with the rest of the sales.
Most of what you hear about Facebook these days has to do with disappointment among investors or disappointment among companies advertising on Facebook. However, USA Today had an interesting article on an area where Facebook is having success: sales for small retailers that sell directly through the Facebook Store. Second quarter profits from Facebook stores were up 38% for the 180,000 small to midsize retailers and have been going strong since then.
It seems that small retailers are able to have success and drive sales through Facebook stores, since they have impassioned customers who treat small retailers as if they were a friend. Customers often visit the Facebook page of small retailers to see what new products they have, and often times even know the owners and feel a connection to the person posting on behalf of the store. Since customers are already visiting the retailers page, it's easy for them to just click and buy through the Facebook Store.
The success small retailers are having is not being seen by large retailers. Old Navy and The Gap have recently closed their Facebook stores, while J.C. Penny is holding out hope that they may eventually experience some success.
It's kind of ironic that these large retailers that put many small retailers out of business by pushing low prices and product availability, are now seeing their lack of an impassioned customer base coming back to haunt them in at least one area. It will be interesting to see if any of them try to start implementing a CRM strategy to get move visits to their social media pages, and engage more with their customers.
What will also be interesting to see is how these passionate customers react when one of the small retailers grows into a large retailer. Will they see their customer base become less passionate and Facebook Store sales diminish, or will they be able to grow Facebook Store sales in tandem with the rest of the sales.
Interesting rationale for why Facebook is getting into retail in the first place via the online gift store:
ReplyDeletehttp://www.wired.co.uk/news/archive/2012-09/28/facebook-online-store
The claim is that this will take advantage of more ‘naturally occurring’ behavior in a better way than explicit sponsored ads. Facebook has quickly ramped up on this via acquisitions of startups, which give it the power to have a seamless online, mobile and desktop version of the software.
I’m not sure the extension from wishing someone happy birthday to buying that same someone is as lucrative as Facebook is estimating it to be with its investment. Although wishing folks on fb has become the cultural norm, it doesn’t necessarily mean the added consumer dollars in add-on sales no matter how convenient.