Friends With Benefits: F-Commerce Clicks In

Friends With Benefits: F-Commerce Clicks In
Sales through Facebook are expected to grow.

It pays to have lots of friends.

After establishing Facebook pages and attracting hundreds of “friends,” many footwear players are taking the next logical step: using the site to sell directly to their best buds.

While overall sales through so-called F-commerce are still small in comparison to traditional e-commerce and mobile devices, experts said the platform is about to take off, thanks largely to the integration of social media with direct selling opportunities.

“Social media allows [brands] to interact with the consumer in a more intimate way. You have the ability to tap into their lifestyle,” said Marshal Cohen, chief industry analyst at The NPD Group. “When you use traditional [e-commerce] sites, you feel like [you see things from the] brand’s perspective. [F-commerce] gives you the ability to reach out to people, [so it’s] live and it’s a conversation.”

And with nearly a billion active Facebook users, observers suggest the site provides one of the largest, real-time networks for broadcasting specifically crafted messages. What’s more, it enables like-minded individuals and brands to shorten the distance between each other for commerce.

So what’s the difference between F-commerce and other online shopping outlets?

According to brands and experts, the differences are subtle, but important, and an essential part of an integrated sales platform.

“All these [selling tools collectively] are going to become very [important],” said Todd Albowitz, founder and president at retail consulting agency Double Diamond Group. “These will all become a bigger part of the shopping experience, but not at the expense of one another.”

Marc Beckman, founder and CEO of Designers Management Agency, a New York-based talent and brand management firm, said it all comes down to convenience and the ability to offer consumers items to buy where they already spend their time.

“If you don’t have time for shopping, it’s easier to go online and purchase the basics [via Facebook],” Beckman said. “Consumers love that level of convenience.”

According to a study conducted by social commerce platform 8thBridge, Facebook users are more willing to shop for both shoes and accessories on the site than for other products. More specifically, 38 percent are looking for footwear. And according to the same survey, which polled 1,448 U.S. citizens and Facebook users in October 2011, 48 percent of fans are looking for an “attractive deal” when getting ready to make a purchase.

Retailer Garnet Hill launched its Facebook commerce site in January, offering its full collection of merchandise, including shoes, women’s apparel, sleepwear and home furnishings. Fans of the site routinely share merchandise information with friends, in addition to reading and writing reviews of product.

“Our ultimate goal is to be available whenever and wherever customers are looking for us,” said CEO Russ Gaitskill. “This initiative clearly exemplifies our continued efforts to expand our digital reach.”

Report Shoes, now a division of Steven Madden Ltd., has taken a different approach, choosing to only showcase 10 different styles per day on its site. “Fans and shoppers in general are attracted to exclusives and our fans want a reason to come back and shop there,” said Lindsay Larin, marketing media manager for the Report brand.

Larin noted that the majority of people buying the shoes on Facebook are already fans of the brand. But the brand could gain more followers through its fans’ friends.

According to Double Diamond’s Albowitz, the integration of social networking with commerce produces information that brands can use to improve their businesses, things that can’t be collected through regular e-commerce.

“If you know that your easiest sale is to a 35- to 45-year-old female in a certain demographic, then find an item to [sell] to her,” he said.

Wade Gerten, co-founder and CEO at 8thBridge, said new Facebook features also are helping users, as well as brands, to more effectively connect with one other. For example, Gerten said the new Timeline page structure, which started rolling out late last year, allows brands to obtain more insight into the lives of fans and customers because they are able to see how their preferences change and progress over time. “It’s a great opportunity for fashion and footwear brands,” said Gerten, adding that the Timeline showcases all the “important details” for users, such as shopping habits and likes.

Designer Jeff Silverman, who started selling his namesake brand of do-it-yourself footwear on Facebook (customers can create their own looks) about a year ago, started by offering only exclusive product, while also promoting sales. But over time, Silverman said, he found that it was more effective to showcase his full assortment of product rather than just a few items.

“More product will get people more involved on Facebook,” said the designer, who added that his tactics prevented users from leaving Facebook to go to the brand’s e-commerce site.

Another way to raise sales is to fully embrace Facebook as a marketing tool, said Michelle Magallon, VP of e-commerce for the Perry Ellis brand, which launched an F-commerce site two years ago.

Now the brand is testing what works best. For example, Perry Ellis posted behind-the-scenes looks from a recent photo shoot. The product featured in that shoot, in turn, had a strong response.

“If we focus on specific product, then we have more fan engagement. We had a significant amount of revenue that was generated from that post,” said Magallon, adding that it drove 8 percent of revenue for that specific day.

Yet the concept of F-commerce is certainly a work in progress. And with the announcement this month that Facebook would file an IPO, companies are still wondering what that will mean for their brands.

“There will be more of a focus on trying to become more profitable and bring in more revenue because Facebook will have to answer to shareholders,” said Magallon. “Perhaps [selling on Facebook] could become more commercial.”

Lou Abramowski, co-founder and director of product at 8thBridge said, “We can definitely expect the IPO to drive more pressure on generating revenue, which should, in turn, drive even more Facebook product development, feature enhancements and support for brands.”

Another major roadblock thus far has been payment and security concerns, according to Cohen. “The No. 1 reason consumers don’t use [F-commerce stores] is because they aren’t comfortable entering credit card information here,” he said. “[To really legitimize the channel], it’s going to take a payment system that consumers feel comfortable with.”

And some brands aren’t yet convinced that the platform can yield enough sales to make it worthwhile, especially when compared with mobile sales, which have skyrocketed in recent years.

Despite changing his selling tactics to showcase full product, Silverman has not yet seen a surge in sales. “For [our brand], mobile purchases are a better deal in terms of percentage of sales,” he said. “I have not seen a whole lot of payback in my view.”

Nancy Nanka-Bruce, director of marketing and communication at Nina Shoes, echoed that sentiment. “Selling directly through Facebook hasn’t caught on in a major way,” she said. “What has been successful is driving sales to drum up excitement about Nina product. For direct sales, mobile has delivered far greater success.”

Still, most experts believe F-commerce is here to stay. And even Nanka-Bruce said she may have to reconsider the company’s position on Facebook at some point.

“In the future, the Facebook platform may be enhanced to be more conducive to sales,” she said. “People may become comfortable or used to purchasing through Facebook.”

But overall, Double Diamond’s Albowitz said, after some adjustments, the platform is on its way up.

“There are a large set of customers going to [the site], it’s a good target to optimize [sales] and make it a great, world-class experience for the customer,” he said. “[Brands] are missing out if they don’t [explore this opportunity].”

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