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					F-Commerce
Selling on Facebook
The Opportunity for Consumer Brands

Dr. Paul Marsden, SYZYGY Group
	 1	   /	   EXECUTIVE	SUMMARY
	 2		 / 	   INTRODUCING	THE	F-COMMERCE	ECOSYSTEM
	 5		 / 	   F-COMMERCE	–	THE	SIZZLE	IN	THE	SOCIAL	COMMERCE	STEAK
	 7		 / 	   BUT	DOES	F-COMMERCE	WORK?
	 0		 / 	
1           F-COMMERCE	FOR	BRANDS	–	FIVE	REASONS	
	 5		 / 	
1           BRAND	BUILDING	WITH	THE	‘SOLOMO’	CONSUMER
	 9		 / 	
1           F-COMMERCE	–	TURNING	FANS	INTO	ADVOCATES	
	 2		 / 	
2           ADVOCACY	ACTIVATION	WITH	FAN-STORES
	 4		 / 	
2           ACTIVATING	–	ADVOCACY	WITH	FAN	MERCHANDISE
	 5		 / 	
2           FUTURE	TRENDS
	 7		 / 	
2           CONCLUSION:	START	WITH	THE	SMILE	AND	LEAD
	 8		 / 	
2           ABOUT	SYZYGY	AND	CONTACT	US
	 0		 / 	
3           RESOURCES	AND	BIBLIOGRAPHY
                                                                   EXECUTIVE SUMMARY




EXECUTIVE SUMMARY




What do Lady Gaga, Coca-Cola, Batman and Pampers
Diapers all have in common? They all sell on Facebook –
offering friends, fans, and followers a privileged and
personal point of purchase on the world’s largest
social network.



Something else that all four have in common        A BO UT T H E AUT H O R
is that they’re all consumer brands; they have
traditionally outsourced the business of getting
products into the hands of consumers to
retailers. So what’s changed? Why are brands
– including top three brands on Facebook –
increasingly selling direct to consumers on
Facebook?


Based on an 18-month study tracking the
emerging trend of ‘f-commerce’ – selling with
Facebook, this report provides a critical
overview of f-commerce specifically for con-       DR. PAUL MARSDEN
sumer brands. It identifies the key risks and      is a social media strategist
opportunities for brands in setting up shop on     for Syzygy and editor of Social
Facebook – and concludes that emulating the        Commerce Today. A social
current trend among leading retailers to open      psychologist with a PhD in the
up large e-commerce stores on Facebook would       spread of influence through
be a mistake for many consumer brands.             social networks, Paul has 12
                                                   years experience in digital
Instead, this report advocates an alternative      marketing and is author of
f-commerce solution for brand pages on             Connected Marketing.
Facebook; fan-stores selling fan-first and
fan-only exclusives designed to activate brand     socialcommercetoday.com
advocacy. Five key brand-building benefits
are identified, and a blueprint for setting up a
Facebook fan-store designed to activate fan
advocacy is outlined using an evidence-based
three-point ‘advocacy activation’ formula
derived from academic research. The report
concludes by outlining emerging trends and new
opportunities for consumer brands and their
agencies in the f-commerce space.




                                                                                     1
INTRODUCING THE F-COMMERCE ECOSYSTEM




In 2009, a single lonely business – US florist 1-800 Flowers
– set up shop on Facebook, making the social network its
retail home. They built a store where they thought it was
the best, on the conversational shores of a commercial
wilderness. Others soon followed; first came the musi-
cians, film and TV shows. Then came the celebrities, and
then came the retailers, and then came brands. And soon
the conversational network had become a commercial
road that was so deep, so wide, like a rolling river…

And in that time – since the first secure retail   /   Facebook Deals – Facebook’s deal platform
transaction on a Facebook page for a $34               that enables vendors to get new customers
bouquet of flowers at 11.50AM on July 8, 2009          to pay upfront for vouchers that can be re-
– Facebook commerce has evolved. Facebook              deemed in-store or online. For example, the
commerce, or ‘f-commerce’ as it is increasingly        American Swim Association offers voucher
dubbed, has evolved from simply selling on             deals for pre-paid swimming lessons.
Facebook pages to a full ecosystem of solutions
for selling with Facebook.                         /   Facebook Credits – Facebook’s own
                                                       currency, used for purchases made within
T H E F- COMME RCE ECOSYST E M:                        Facebook for virtual goods, digital products,
S E L L I N G O N FACE BOO K                           and Facebook deals. For example, Warner
                                                       Bros. allows users to pay with Facebook
/   Facebook Stores – third-party e-commerce           Credits for its movie rental streaming
    applications installed on Facebook business        service from Facebook movie pages (e.g.
    pages that enable users to shop and                Harry Potter, Batman, Inception).
    complete purchase transactions without
    leaving the network. For example, ASOS,
    JC Penney, GNC, HMV and Express allow
    people to browse, share and buy from an
    e-commerce app on their Facebook page.




2
                                                                                             F - CO M M E R C E




T H E F- COMME RCE ECOSYST E M:                          products ‘Liked’ by friends, products popular
S E L L I N G WIT H FACE BOO K                           with friends). In-store, fashion brand Diesel
( FACE BOO K A SS I ST E D COMME RCE )                   is using Facebook Developer Tools with QR
                                                         codes (quick response matrix barcodes) on
/   Facebook Apps – third-party Facebook                 product tags to allow shoppers to ‘Like’
    applications for Facebook pages, typically           products on Facebook as they browse. Along
    product catalogue apps, designed to drive            with department store chain Macy’s, Diesel
    traffic to external e-commerce sites. For            is also trialling Facebook fitting-rooms,
    example, Apple’s iTunes Facebook page                kitted out with webcams connected up to
    includes a browsable catalogue of featured           Facebook for sharing try-outs.
    track previews linking through to product
    pages on its main e-commerce site, where         /   Facebook Check-in Deals – a mobile local
    purchases may be made. Retail giant                  advertising service from Facebook, allowing
    Walmart uses a similar app to drive footfall         businesses to drive retail store footfall with
    to stores featuring latest offers that only go       deals advertised on the Facebook mobile
    live when enough people have ‘Liked’ them            app. Part of the ‘SoLoMo’ trend (social-local-
    on Facebook.                                         mobile), H&M and Macy’s offer 20% discount
                                                         to people checking-in on their mobile
/   Facebook Developer Tools – a set of                  Facebook app to their stores.
    Facebook tools that allow businesses to
    simplify, personalise and socialise both         /   Facebook Advertising – display advertise-
    the in-store and e-commerce site retail              ments on Facebook pages designed to drive
    experience by adding Facebook features.              traffic to e-commerce sites, or footfall to
    These tools include Facebook Social Plugins,         stores – often via downloadable coupons.
    Facebook Authentication, the Facebook API            For example, online florist 1-800 Flowers
    and the Open Graph Protocol. For example,            has used Facebook’s customer testimonial
    e-commerce sites such as Amazon, Levi’s              ads (‘Sponsored Stories’) and offered a 15%
    and Estée Lauder use Facebook Developer              discount and free Facebook Credits to drive
    Tools to allow visitors to login with their          traffic and sales on its e-commerce site.
    Facebook accounts and see a personalised             More broadly, businesses are using their
    store optimized with data from their                 Facebook wall as an advertising medium to
    Facebook account (friends birthdays,                 advertise retail events and products.


                                                                                                             3
F-Commerce – Selling on Facebook




Facebook Stores                          Facebook Deals                         Facebook Credits
Allow customers to buy and               Get new customers who pay up front     Reduce e-commerce friction by allow-
pay directly from your Facebook          on Facebook with FB Credits, PayPal    ing customers to pay with Facebook
page and newsfeed.                       or card.                               Credits.




Facebook Assisted Commerce – Selling with Facebook




Facebook Apps                            Facebook Authentication                Open Graph Protocol
Drive e-commerce traffic with apps       Improve site/app experience by         Drive sharing by integrating website
(e.g. product catalogues) installed on   allowing customers to sign on with     pages into the Facebook graph as
your Facebook page.                      Facebook details.                      graph objects.




Facebook Graph API                       Facebook Ads                           Facebook Marketing
Create shopping apps and sites that      Drive e-commerce traffic or footfall   Drive sales and loyalty with news
integrate with (read and write to)       with standard or testimonial display   and promotions posted to your
Facebook.                                ad units.                              Facebook page.




Facebook Check-in Deals                  Facebook Social Plugins
Drive store footfall and loyalty         Improve e-commerce site experience
with mobile coupons for customers        by adding Facebook social features.
close by.




4
                                                                                                             F - CO M M E R C E




F-COMMERCE –
THE SIZZLE IN THE SOCIAL COMMERCE STEAK




“It’s a matter of time –                                       of consumer spending in developed countries
                                                               may go through Facebook and other social
within the next five or so                                     media sites1. Consultants Booz & Co forecast

years – before more                                            that the social commerce market – largely
                                                               driven by f-commerce and group-buy will be
business will be done on                                       driving $30bn in annual sales in five years time;

Facebook than Amazon.”                                         $14bn in the US and $16bn in the rest of the
                                                               world (see chart)2. Many brands concur with
Sumeet Jain, Principal, CMEA Capital                           this bullish assessment: Dell Computers, for
                                                               example, which is a respected pioneer in both
                                                               e-commerce and social media believes that
                                                               f-commerce and more generally ‘transactional
In the two years since inception, f-commerce                   social media’ will be the next logical step in
has become, along with group-buy, a poster                     social media: “Social media may not have driven
child for ‘social commerce’, the umbrella term                 sales in an obvious way so far, but the next
for the use of social media to support the                     logical step will be transactional social media.
buying and selling of products and services.                   When you can buy products through Facebook,
                                                               rather than just liking them, we’ll start to see a
In the US, investment money is following                       shift in the role of social media in the business.”
f-commerce innovation. Not only are brands                     (Manish Mehta, head of social media, Dell3).
increasing their investment in Facebook, but
new f-commerce services and ventures are also
receiving funding. In the first few months of 2011,
over $2bn investment was poured into social
commerce ventures. Why? Because analysts see
social commerce in general, and f-commerce in                  “In three to five years,
particular, as the first real business model for
                                                               10 percent to 15 percent of
social media. Some are predicting that within
five years more business may be done on                        total consumer spending
Facebook than on Amazon, and that 10-15%
                                                               in developed countries may
                                                               go through sites such as
                                                               Facebook.”
                                                               Mike Fauscette, Analyst, IDC Consulting




1 – http://socialcommercetoday.com/f-commerce-faq-all-you-ever-wanted-to-know-about-facebook-commerce-but-were-
afraid-to-ask/
2 – http://socialcommercetoday.com/speed-summary-boozco-report-the-30bn-social-commerce-market/
3 – http://socialcommercetoday.com/f-commerce-faq-all-you-ever-wanted-to-know-about-facebook-commerce-but-were-
afraid-to-ask/

                                                                                                                             5
BOOZ & COMPA NY E ST I MAT E O F SOCIA L COMME RCE MA R K E T S IZ E
(2010 -2015) I N US$ B I L L I O N S




                                                                                      16




                                                                                12




                                                       8

                             6

    4

    1                         3                        5                         9     14


2011                      2012                      2013                      2014    2015


                                ANNUAL GROWTH 56%

                                                                                       REST OF THE WORLD
Booz & Co 2011: "Turning 'Like' to Buy": Social Media Emerges as a Commerce Channel    US




6
                                                                                                                 F - CO M M E R C E




BUT DOES F-COMMERCE WORK?




Despite the business buzz around f-commerce                          And there is another precedent to support the
buzz, doubts persist; the industry is two years                      bearish reaction to f-commerce; Facebook has
old and has yet to produce a single high profile                     been singularly unsuccessful as a marketing
and compelling success story. Critics suggest                        tool. Businesses place Facebook marketing a
that selling on Facebook is no different to selling                  poor fourth behind email marketing, search
on Second Life, the briefly popular virtual world.                   marketing and affiliate marketing, 2/3 see no
In other words, f-commerce is a futile and                           clear value from their social media investment
far-fetched fad – best left well alone. Just as                      at all, and 68% believe that if Facebook disap-
business and brands – from American Apparel                          peared tomorrow, it would have absolutely
to Vodafone4 – poured money into setting up                          no effect on their business (US figures).5 So if
shop in Second Life back in 2006, only to find                       Facebook advertising and marketing don’t pay,
that nobody wanted to shop there, they are                           then why should retailers start selling with
making the same mistake again: People didn’t                         Facebook?
go to Second Life to shop, so they didn’t. People
don’t go to Facebook to shop, so they won’t.




I F FACE BOO K I S BAD FO R E- COMME RCE T RA F F I C, WHY WI L L IT B E ANY B E T T E R FO R E- COMME RCE?

                                                   AVERAGE FACEBOOK METRICS                        AVERAGE EMAIL METRICS

CL I CK T H RO U G H RAT E                         1%                                              11%

CONVERSION RATE                                    2%                                              4%

AV E RAG E F R I E N DS/ACCO U NT                  132                                             N/A

AVERAGE IMPRESSIONS PER POST                       50                                              N/A

Source: PowerReviews The Case For (and Against) Facebook Commerce May 2011 (Archived at http://www.slideshare.net/
PowerReviews/webinar-the-case-for-and-against-facebook-commerce




4 – http://www.nbhorizons.com/list.htm
5 – The State of Retailing Online 2011, a Shop.org study conducted by Forrester Research – summary archived at
http://www.slideshare.net/PowerReviews/webinar-the-case-for-and-against-facebook-commerce

                                                                                                                                 7
In addition to the lack of high profile f-commerce                40x: Increase in referral traffic from
success stories and the debatable track record                    Facebook for Levi’s e-commerce site after
of Facebook as a marketing tool, detractors                       implementing the ‘Like'-button in April 2010.
point to further uncertainties surrounding
f-commerce; can it offer a best practice                          50%: More likely to make repeat purchases
e-commerce experience, what of privacy,                           on ShoeDazzle.com for those people logging in
data-ownership and security concerns, how is                      to the site with Facebook account.
payment best handled – especially considering
30% commission rates on Facebook Credits                          57%: Above average increase in order
transactions, and how does the enigmatic                          value from Facebook traffic for retailer Ameri-
Facebook EdgeRank algorithm work that decides                     can Eagle after adding the ‘Like’-button.
whether shared content on Facebook actually
gets shared?                                                      2x: Increase in conversion rate from Face-
                                                                  book traffic to online technology store Incipio.
On the other hand, f-commerce advocates point                     Facebook traffic is 3x more likely to add product
to a small but growing body of evidence that                      to a shopping cart, and Facebook is the store’s
points to a promising future for f-commerce :           6
                                                                  #2 source of traffic.


                                                                  100%: Increase in revenue from Facebook
                                                                  traffic within two weeks of adding the ‘Like’-
                                                                  button for sports retailer Giantnerd.


                                                                  10x: Revenue increase for children’s clothing
                                                                  retailer Tea Collection after adding the ‘Like’-
                                                                  button to sale merchandise.




6 – http://socialcommercetoday.com/list-of-f-commerce-success-stories/

8
                                                                                              F - CO M M E R C E




1000: Diapers sold by consumer products             Overall, it is still too early to tell whether
giant Procter & Gamble in under an hour on its      f-commerce will ever be any more than a
Facebook store.                                     small wrinkle in the e-commerce landscape.
                                                    This means that brands and businesses are
3rd: Third highest sales day for online             left with two options; either run a pilot to find
fashion retailer Rachel Roy the day it opened       out first-hand whether f-commerce works or
a temporary ‘pop-up’ Facebook fan-store.            adopt a wait and see approach, hoping that
                                                    competitors will share their experiences. For
7-10%: Uplift in average order value in             businesses already selling direct to customers
the Facebook store vs. web-store for student        (DTC), f-commerce pilots will involve assessing
e-tailer Kembrel: Up to 20% of e-commerce           whether Facebook can further their retail goals;
sales transactions are now completed on the         driving traffic or footfall, increasing conversion
retailer’s Facebook store.                          and order value, and ultimately increasing
                                                    customer lifetime value (CLV) – today’s value
$2.53: The value of a post-purchase                 of the sum of all purchases that have and will
Facebook ‘Share’ (RPS – revenue per share) for      be made by an average customer.
event ticketing site Eventbrite in incremental
revenue.                                            It is this last goal, moving beyond transactions
                                                    to drive CLV by boosting purchase frequency,
$1.34: The value of a pre-purchase Face-            share-of-wallet and customer tenure that
book ‘Like’ (RPL – revenue per ‘Like’) for event    some of the most interesting innovations in
ticketing site Eventbrite in additional sales.      f-commerce are happening. For example, UK
                                                    mobile operator 02 and coffee chain Starbucks
$5.30: The value (RPS) of a post-purchase           are piloting f-commerce as a prototypical CRM
Facebook ‘Share’ for ticketing site Ticketmaster.   (customer relationship management) platform,
                                                    allowing customers to top up pre-pay accounts
$3.25: The value (RPS) of a post-purchase           on Facebook pages, rewarding them for doing
Facebook ‘Share’ for ticketing site Ticketfly.      so, whilst using Facebook as highly targeted
                                                    and cost-effective couponing media.
$14: RPS for businesses using local deals
software Chompon (RPL = $8).


$15.72: Incremental revenue generated
for businesses using PowerReviews review
software every time a review is shared to
Facebook: For every 12 shared reviews, an
additional sale is generated.


$2.10: The value (RPS) for businesses using
SpinBack, a word of mouth plugin for online
retailers that calculates the sales value of
Facebook shares.




                                                                                                              9
F-COMMERCE FOR BRANDS – FIVE REASONS




F IV E R E A SO N S FO R CO N S UME R B RAN DS TO S E L L O N FACE BOO K




For brands already selling direct to consumers,                 /   Coca-Cola has set up shop on Facebook,
f-commerce is ultimately uncontroversial; the                       selling fan merchandise to brand fans –
only controversy is over whether it works or                        apparel, collectibles, posters, and even
doesn’t. But what of consumer brands with no                        furniture from recycled Coke bottles.
or limited DTC experience? What use, if any,
is f-commerce to them?                                          /   Unilever has set up shop on Facebook, giving
                                                                    Dove fans early access to new Dove product
/    Procter & Gamble has set up shop on                            lines7.
     Facebook to sell new Pantene and Max
     Factor lines to Facebook fans before                       Interestingly, the principal utility of f-commerce
     they’re available in store.                                for these consumer brands appears not to
                                                                be sales; they do not sell, looking to establish
/    Procter & Gamble has also set up shop on                   a new retail channel to challenge or replace
     Facebook to sell campaign merchandise                      traditional and partner retail channels. Instead,
     for successful advertising campaigns such                  they would seem to be focusing on one or more
     as the Old Spice “The Man Your Man Could                   of five distinct non-sales benefits that can be
     Smell Like” campaign.                                      derived from selling on Facebook.


/    Procter & Gamble has also established
     a broader e-commerce presence within
     Facebook, adding stores to the Facebook
     brand pages of Tide, Gillette, Olay, Gain,
     CoverGirl, Luvs and Febreze.


7 – http://socialcommercetoday.com/f-commerce-store-roundup-32-notable-big-brand-facebook-stores-screenshots/

10
                                                                                                        F - CO M M E R C E




R E A SO N #1:                                                   R E A SO N #2:
Facebook ROI – Consumer brands are coming                        Brand Experience – Delivering a compelling
under increasing pressure to justify the time,                   brand experience on Facebook requires,
energy and money they are spending on                            minimally and essentially, meeting the desires
Facebook. Loose talk of ‘engagement’ – with                      and expectations of a brand’s Facebook visitors.
an official definition of “turning on a prospect                 What are these desires and expectations?
to a brand idea enhanced by the surrounding                      Increasingly, when asked why they connect with
context” – is increasingly seen as unaccount-                    brands on Facebook, consumers say it’s to shop
able fudge, signalling brand-babble without                      and for deals (see chart). By adding a store
a business case8.                                                to their Facebook page, a brand improves the
                                                                 experience it delivers at this touch point.
On the other hand, Facebook stores can help
brands make the business case for Facebook                       Ironically, as a recent report by IBM concluded,
investment by answering the thorny question                      legacy thinking among some consumer brands
of Facebook ROI: What’s the return on invest-                    has created something of a perception gap
ment in collecting ‘likes’, servicing customers                  between why brands think, or rather hope,
and messaging followers on Facebook? As the                      people connect with them on Facebook, and why
central component of any business case, ROI is                   they actually do. Brands want to believe that
a financial measure – money out minus money                      people least connect with them for shopping
in – which means that the only way to measure                    and deals (because that’s not what they do),
Facebook ROI is to link Facebook investment to                   whereas people most connect with them for
sales. E-commerce-enabled Facebook brand                         shopping and deals.
pages make Facebook ROI possible.
                                                                 From a branding and brand experience
                                                                 perspective, perception gaps such as this may
                                                                 be damaging, creating a ‘disconnect’ between
                                                                 a brand and its market. A Facebook store on a
                                                                 brand’s Facebook page may go someway to re-
                                                                 moving the disconnect whilst protecting brands
                                                                 from irrelevance or, worse, inauthenticity, when
                                                                 they pretend to appear non-commercial.




8 – For the official definition of brand engagement, and a useful discussion see
http://www.ephrononmedia.com/article_archive/article_pdf/engagement_02_08.pdf

                                                                                                                       11
M I N D T H E GA P – T H E SOCIA L ME D IA PE RCE PT I O N GA P


                      CO N S UME R RAN K I N G                                B RAN D RAN K I N G
                          Why they connect                                    Why they think consumers
                                with brands                                   connect with them
                           in social media.                                   in social media.


                               (61%) Discount                                 (73%) Learn about new products

                              (55%) Purchase                                  (71%) General Information

           (53%) Product Reviews/Rankings                                     (69%) Submit opinion on current prod./serv.

                    (53%) General Information                                 (68%) Exclusive Information

                   (52%) Exclusive Information                                (67%) Product Reviews/Rankings

           (51%) Learn about new products                                     (64%) Feel connected

(49%) Submit opinion on current prod./ser.                                    (63%) Customer service

                      (37%) Customer service                                  (63%) Submit ideas for new prod./serv.

                     (34%) Event participation                                (61%) Be part of a community

                        (33%) Feel connected                                  (61%) Event participation

     (30%) Submit ideas for new prod./serv.                                   (60%) Purchase

                 (22%) Be part of a community                                 (60%) Discount



IBM From social media to Social CRM (Adapted from IBM Institute of Business Value analysis CRM Study 2011)
Consumer (US) n = 1056, Business (US) = 333; ftp://public.dhe.ibm.com/common/ssi/ecm/en/gbe03391usen/GBE03391USEN.PDF




R E A SO N #3:
Brand Insight – Ask consumer brands selling
on Facebook why they’re doing it – and the
answer is more likely to be insight than sales.
For example, the Facebook stores on the brand
pages of Procter & Gamble are used as a “Live
Learning Lab” to help the business understand
how consumers interact with their brands
and technology – in real life, as opposed to
via artificial surveys and sterile focus groups.
Combining conversations with commerce, and
using rich Facebook user data, brands have
the opportunity to harness Facebook stores to
better segment their markets, optimise pricing,
packaging and promotions – and even test
launch new products.


12
                                                                                           F - CO M M E R C E




The insight value of f-commerce benefits not        R E A SO N #5:
only brands themselves, but also their retail and   Brand Advocacy – Brands are using f-commerce
channel partners, ensuring what is produced         to drive brand advocacy: using Facebook stores
for stores, flies out of stores. Far from posing    to get products into the hands of the people
any kind of threat to retail partners, Facebook     most likely to recommend them, their fans.
stores from consumer brands may reduce risk         By offering new products on a fan-first basis,
for these partners, ensuring that their shelves     and offering fans exclusive fan merchandise
are stocked with the right products with the        designed to create conversations, brands can
right packaging, at the right price and with the    turn fans into active advocates. For example,
right promotions.                                   Heinz sells new ketchup lines from its Facebook
                                                    page, just before they hit the store, giving
R E A SO N #4:                                      Facebook fans exclusive ‘get-it-first’ access,
Brand Loyalty – Brands are using f-commerce         and thus something to talk about. They are
to drive brand loyalty, increasing propensity       cleverly instigating digital word of mouth.
to repurchase – relative to competitors, by
offering loyal brand fans a privileged point of
purchase. For example, Warner Bros. sells ‘fan-
only’ special editions of DVD box set movies,
including those from Harry Potter, direct from
Facebook movie pages. By boosting brand
loyalty, brands can increase the effectiveness of
advertising and marketing, amortising the cost
of user acquisition over a longer period.




                                                                                                         13
5 K E Y B RA N D ME T R I CS FO R F- COMME RCE S UCCE SS




/ Does our f-commerce initiative improve Facebook ROI?

/ Does our f-commerce initiative improve visitor experience
     on Facebook?

/ Does our f-commerce initiative generate insight that can
     usefully inform strategic and operational brand decisions?

/ Does our f-commerce initiative improve propensity to
     recommend among our Facebook followers?

/ Does our f-commerce initiative improve propensity to
     re-purchase among our Facebook followers?




Just as f-commerce promises retailers                      As is the case for retailers, f-commerce for
enhanced traffic, conversion and order value,              brand-building is too new and experimental
the f-commerce promise to brands includes                  for definitive answers to these questions.
enhanced experience, insight, loyalty, advocacy            Furthermore, success is likely to depend on how
and Facebook ROI. And to the degree that                   individual f-commerce solutions are deployed.
f-commerce will succeed or fail for retailers              But by understanding these five key questions
based on how it delivers on its e-commerce                 to which f-commerce may be the solution,
promises, so too will the success or failure of            consumer brands can establish pilots to test
f-commerce depend on delivering on brand-                  their efficacy.
building promises.




14
                                                                                           F - CO M M E R C E




BRAND BUILDING WITH THE ‘SOLOMO’ CONSUMER




Cautious and conservative retailers may choose      Whilst many brands today are focusing on the
to sit out f-commerce experimentation until         rise of the new ‘social consumer’ – consumers
more proof-points emerge on the effectiveness       who shop with their social intelligence, using
and efficiency of f-commerce in furthering          social technology – ratings, reviews and their
e-commerce goals. In the same way brand             social graph – to form smarter opinions and
managers may choose to sit out f-commerce           make smarter decisions, social is only one
until more evidence emerges that f-commerce         aspect of how technology is changing how
can in fact, rather than in principle, deliver on   consumers connect with each other and with
brand-building goals of experience, insight,        brands. The other two in ‘The Big 3’ – mobile
loyalty, and advocacy as well as Facebook ROI.      technology and location-aware technology – are
                                                    equally as important, and in this sense, it may
But there is a compelling reason not to             make more sense to focus on the ‘SoLoMo
wait – and that is to learn more about how          consumer’ – consumers who experience brands
consumers are using technology – specifically       through social, location-aware, and mobile
social, location-aware and mobile technology        technology. With 250m people using Facebook’s
to connect and share with each other, form          location-aware mobile app to connect and share
opinions and make decisions.                        with each other, Facebook and f-commerce
                                                    make an ideal platform for learning about the
                                                    SoLoMo consumer.




                                                    WH O I S T H E SOCIA L CO N S UME R?
                                                    /   Learns about breaking news through sites
                                                        like Twitter and Facebook.


                                                    /   Learns about new products through social
                                                        channels and networks.


                                                    /   Is wise to unsolicited promotions and trusts
                                                        only relevant information.


                                                    /   Desires a conversation with the brand rather
                                                        than one-way ad messages.


                                                    /   Expects brands to be active in the same
                                                        social media sites he/she hangs out in.


                                                    /   Wants brands to listen, engage and respond
                                                        quickly.




                                                                                                         15
SOCIA L                                           LOCA L


23%: Online time consumers spend with             300%: Growth of location-based service
social media – social networking is now the #1    users in 2010 – services that have evolved from
online activity.                                  games to include reviews, recommendations
                                                  and deals.
86%: Consumers consult online reviews
before buying; 90% trust the reviews they read.   95%: Mobile users using their handsets to
                                                  find local information; 88% take action based on
42%: US online adults follow a retailer via       that information.
Facebook, Twitter or blog.
                                                  70%: Online mobile users who use hand-
6: The average number of brands consumers         sets to help shopping in-store.
follow in social media.
                                                  47%: Consumers who access customer
56%: Facebook users have clicked through          reviews in-store via mobile handsets.
to a retailer website from a Facebook post.
                                                  86%: Consumers using the Web to find local
28%: Facebook users have purchased                businesses: 20%+ of all Google searches have
something online via a link on Facebook.          a local intent.


35%: Consumers would buy products on              78%: Mobile connected consumers have
Facebook; 32% would do so from Twitter if         purchased from a local deals site.
possible.
                                                  76%: Smart phone users have made an in-
25%: Google searches done on YouTube              store purchase based on information accessed
video sharing site; YouTube is the world’s 2nd    from their handset.
largest search engine.
                                                  49%: Smart phone owners use their
52%: Consumers share deals from local             handsets to get local promotions and coupons.
deal sites such as Groupon and LivingSocial.
                                                  45%: Online European consumers have
50%+: Consumers more likely to buy                researched a product online and then bought
from businesses they follow in social media.      it in a shop.


53%: People on Twitter recommend                  $61bn: Projected value of the online local
companies and/or products in their Tweets.        deals market in 2015; 2011 value to grow 138%.


12x: Degree of trust consumers have in
shared consumers’ reviews compared to
brand-communicated information.


90%: Online consumers trusting recom-
mendations from people they know; 70%
trust opinions of unknown users.



16
                                                                                              F - CO M M E R C E




MO B I L E                                     The implication is that SoLoMo technology
                                               and the SoLoMo consumer are changing how
7.5%: Proportion of total media consump-       consumers connect and engage with brands;
tion that occurs via a mobile device.          real-time, on-demand and on-the-go. In a
                                               recent influential report in the Harvard Business
16%: Google searches made on a mobile          Review 9, McKinsey consultants found that
device, up 400% in last 12 months.             the old funnel metaphor for branding from-
                                               awareness-to-consideration-to-preference-
63%: Smart phone users using their             to-purchase has been made largely obsolete
handset to access a social network, at least   by SoLoMo technology. Rather than a linear
once a week.                                   process of pushing consumers down a funnel
                                               with brand communications, the process is now
79%: Smart phone users using their             consumer-driven, non-linear and built around
handsets to help with shopping.                real-time contextual needs.


35%: Smart phone owners have made              For example, whereas consumers used to
a purchase on their handsets.                  keep just one or two favourite brands in mind
                                               for each category, they now manage larger
34%: Facebook users accessing Facebook         ‘consideration sets’, dynamically adding and
from mobile devices at least once a day (32%   removing options right up to, and beyond the
view YouTube videos on a daily basis from      point of purchase. Just as we no longer need
a handset).                                    to remember telephone numbers, our handsets
                                               do it for us, we no longer need to create static
32%: Consumers using mobile handsets           consideration sets – SoLoMo technology can do
to browse or research products or services     it dynamically for us – on-demand. Via mobile
at least once a month.                         devices we have access to trusted information
                                               networks made up of independent experts,
2015: The year mobile web access will          fellow consumers, friends and family. Whatever
overtake desktop access.                       happens in this Brave New SoLoMo World,
                                               people will rely less on marketing messages to
15%: Consumers completing transactions         build opinions and inform decisions, and more
with their mobile devices at least once a      on each other.
month.




                                               9 – Harvard Business Review – Social Media and the New Rules
                                               of Branding
                                               http://hbr.org/2010/12/branding-in-the-digital-age/ar/1

                                                                                                            17
T H E SO LOMO CO N S UME R D ECI S I O N JO U R N E Y



                                               Problem Recognition




                                                                                        Dynamic Decision Loop




       Alternative Evaluation                        Consideration                        Information Search
       Problem Recognition                                Set
Consumers tap information
     and social networks up to
             point of purchase




                                                         Purchase
                                                                                                 Loyality
                                                                                                 Loop

                                            Post-Purchase Evaluation


Adapted from Harvard Business Review – Social Media and the New Rules of Branding
http://hbr.org/2010/12/branding-in-the-digital-age/ar/1




In sum, McKinsey’s global research, along with                    evaluation and advocacy may be influenced
an increasing body of findings from supporting                    as much by other brand users as by the brand
research10, concludes that branding today has                     itself. For example, by supporting each other via
less to do with what a brand says about itself,                   digital technology, consumers create their own
and more about what other people – especially                     loyalty loop with the brand that may promote
other brand users – say about it. Brand                           repurchase. The opportunity for brands is to
perceptions are influenced by consumer brand                      upgrade their understanding of brand building
advocates and brand detractors throughout                         away from messaging and towards activating
the decision journey. Pre-purchase, brand                         brand advocacy.
advocacy and brand detraction influence
problem recognition, solution search, and                         And it is here that f-commerce can help.
alternative-evaluation phases of the decision
process. And post-purchase, brand experience,




10 – See for example Carat and Microsoft ‘The New Shopper’ http://advertising.microsoft.com/wwdocs/user/en-us/foradvertisers/
US-Online-Consumer-Retail-Research-Carat-Microsoft-Advertising.pdf and OglivyOne ‘The Future of Social Selling’
http://socialcommercetoday.com/speed-summary-ogilvyone-report-on-the-future-of-social-selling/

18
                                                                                                                      F - CO M M E R C E




 F-COMMERCE – TURNING FANS INTO ADVOCATES




If a central role of marketing to the new SoLoMo consumer
is to populate information networks with positive brand
advocacy, then activating brand advocacy becomes a
key task.


F-Commerce can assist in building brand                             This technique of activating brand advocacy
advocacy by helping brands get new products                         among brand fans by offering exclusive fan-first
that are worth talking about into the hands                         new product experiences is a trialled, tested
and onto the lips of the people most likely to                      and proven method, and builds on five decades
recommend them; brand fans.                                         of research into brand advocacy.


/   Chanel sells new cosmetic products from its                     This research has confirmed, over and over,
    Facebook fan-store before they reach the                        that brand advocacy is a critical component of
    store – giving brand fans exclusive ‘fan-first’                 brand health; brand advocacy is known to drive
    access and thus something to talk about to                      sales – particularly at product launch; advocacy
    their friends.                                                  can contribute up to 40% of the life-time value
                                                                    of a brand user; it can increase advertising
/   As noted above, Heinz offers brand fans                         effectiveness; it can change brand attitudes
    ‘get-it-first’ access to new ketchup lines                      and is nine times more powerful at doing so
    from its Facebook fan-store – creating an                       than advertising; it can boost brand purchase
    exclusive experience that gets talked about.                    intention; and it can stimulate brand loyalty by
                                                                    reducing post-purchase cognitive dissonance11.
/   The Sony PlayStation fan-store on Facebook                      Over the decades, research into brand advocacy
    sells new products as they hit the shelves                      has also usefully identified three key ‘advocacy
    – and fans get bonus items; checkout and                        activators’ that are available to marketers:
    logistics are handled by retail partners.


/   Retail brands NineWest and Rachel Roy also
    use Facebook fan-stores to activate fan
    advocacy by offering ‘fan-first’ exclusives
    for new product launches.




11 – For more evidence on the commercial benefits of brand advocacy see; Bughin et al 2010, Charlett & Garland 1995, Day 1971,
Festinger 1957, Hogan et al 2004, Kumar et al 2007, Nowinski 2008, Reichheld 2003, 2006, 2011, Reynolds & Darden, 1971 Wangenheim &
Bayón 2007

                                                                                                                                    19
Experience


Involvement


Incentives




A DVOCACY ACT IVATO R 1:
Experience – Advocacy is primarily driven by                         Whilst experiential advocacy cannot be manu-
salient memories of personal experiences                             factured (advocacy only happens when you have
(and to a lesser degree, anticipation of future                      something worth advocating), it can be amplified
personal experiences). It is the experience, not                     by making a product experience exclusive. For
the product (or the ad) that drives advocacy.                        example, by offering a select group of consum-
Experiences that trigger advocacy tend to be                         ers limited and exclusive early access to new
new, original, exclusive, surprising (expecta-                       products, and providing them with exclusive
tion-beating), exciting, symbolic and satisfying.                    information and samples to share, brands can
From a motivational perspective, advocacy is                         substantially boost active advocacy. In one test,
an emotional response to surprise and delight,                       a pre-launch sampling of an otherwise unre-
typically – in the context of products and                           markable new coffee resulted in active advocacy
service advocacy – around product perform-                           from over a third of participants13.
ance, perceived value and customer service .               12




12 – For more on the role of experience on driving advocacy see; Cova & Pace 2006, Derbaix & Vanhamme 2003, Dichter 1966, Gremler
et al 2001, Gummesson 2006, Kuokkanen 1997, Liu 2006, McConnell & Huba, 2003, Oliver 1980, Oliver et al 1997, Schlossberg 1990, Scoble
& Israel 2006, Sifry 2006, Swan and Oliver 1989, Sundaram, Mitra & Webster 1998, and Westbrook 1987

13 – For evidence of the power of product seeding see; Holmes & Lett 1977, Marsden 2006, Thomas 2004

20
                                                                                                                        F - CO M M E R C E




A DVOCACY ACT IVATO R 2:
Involvement – Advocacy is driven by the degree                       Brands can boost involvement-driven advocacy
to which we care about something, something                          through ‘empowered involvement’ – giving
we find personally important and relevant,                           consumers a say in the brand, its future and how
that is, products and subjects with which we                         it is marketed. For example, in one classic test,
have high involvement at the time of advocacy                        students were recruited to join a select panel
(involvement may be ‘enduring’ or ‘situational’).                    to evaluate new music bands. This generated
In this context, brands that get advocated tend                      psychological involvement that triggered
to have 1) high functional value, 2) high symbolic                   advocacy, sending the bands in question to the
value (we use them to signal our tastes), 3) high                    top ten charts in the cities (and only in the cities)
hedonic value (emotional appeal) and 4) high                         where the sub-$5K campaign took place. This, of
risk associated with their purchase. Motivation-                     course, is the principle that underpins the Idol
ally, involvement-driven advocacy is an emo-                         talent contest TV franchise 15.
tional response to interest and excitement .             14




A DVOCACY ACT IVATO R 3:
Incentives – Advocacy is also driven by incen-                       Brands can boost incentive-driven advocacy
tives that motivate consumers to advocate.                           through material and non-material rewards for
Incentive-driven advocacy can be achieved                            advocacy. ‘Word of mouth marketing panels’
either through referral rewards programs –                           such as Bzzagent, TRND and Vocalpoint offer
a highly cost-effective ‘pay-for-performance’                        consumers free samples in return for feedback
customer acquisition strategy, or through                            – if they like it they tell others, if they don’t
advocacy programs that offer consumers free                          they feed back privately to the brand. Overall,
or discounted samples in return for positive                         incentivising happy customers to advocate with
reviews and recommendations. Research also                           samples, rewards and discounts has proven to
shows that one simple non-material incentive                         be an effective alternative to margin-eroding
is often overlooked by marketers; a simple and                       price promotions17.
polite please – a simple request from a brand to
spread the word can increase advocacy 12 fold16.




14 – For more on the role of involvement on advocacy; see especially Oetting 2009, and also Chung & Darke 2006, Dichter 1966, Feick &
Price 1987, Houston & Rothschild 1980, Kapferer & Laurent 1985, Mancuso 1969, Richins & Root-Shaffer 1988, Sundaram, Mitra & Webster
1998, Venkatraman 1990, and Zaichkowsky 1985

15 – For more on how marketers can boost involvement-driven advocacy see; Mancuso 1969, Marsden & Oetting 2005, Marsden 2006,
Oetting 2009, Marsden 2009
16 – For more on the role of incentives on brand advocacy see; Biyalogorsky et al 2001, File, Judd, & Prince 1992, Kumar et al 2007,
Ryu & Feick 2007, Wirtz & Chew 2002

17 – For more on how word-of-mouth panels can boost incentive-driven advocacy see; Marsden 2005, 2006, Oetting 2009

                                                                                                                                       21
ADVOCACY ACTIVATION WITH FAN-STORES




In using Facebook fan-stores to offer fans exclusive
‘get-it-first’ product experiences, consumer brands
are already using the experience of advocacy activator
in a very powerful and proven fashion. The opportunity
for brands is to harness the other two advocacy
activators – involvement and incentives – as well.
How can they do this?


We know that people advocate new products                     In the context of Facebook fan-stores, brands
and services when they’ve had an expectation-                 can use this same ‘empowered involvement’
beating personal experience, especially when                  to activate fan advocacy by engaging fans as
the experience is perceived as personally                     product reviewers or advisers. For example,
important and relevant, and when the                          access to the fan-store could be made
experience is accompanied with an incentive to                contingent on agreeing to post a video review
advocate. The opportunity for brands, therefore,              to Facebook (in the spirit of ‘haul videos’ or
is to transform Facebook fans into Facebook                   ‘unboxing videos’), or perhaps voting on some
advocates by adding ‘involvement’ and                         aspect of how the product will be marketed.
‘incentives’ to the ‘get-it-first’ Facebook store             Procter & Gamble have used just such a ‘VIP
experience.                                                   Vote’ technique effectively in their online
                                                              word-of-mouth marketing panels ‘Tremor’ and
To add ‘involvement’ into the advocacy mix, a                 ‘VocalPoint’, inviting consumers to vote on
fan-store must somehow increase the personal                  options for product packaging, logos, campaign
importance and relevance of what is being sold.               merchandise, print and TV campaigns. The
A simple and proven solution for doing this is to             result is increased involvement, which activates
engage fans not as customers but as advisors.                 advocacy; a phenomenon that according to the
3M famously did this back in the 1970s, when it               consumer goods giant is the “the gold standard
re-launched Post-it Notes after an initial failed             in marketing”18.
market introduction. Rather than engage its
core target market – office staff – as users                  Brands also have the opportunity to harness
or customers, it invited them to act as product               the ‘incentives’ advocacy activator in Facebook
advisors. Specifically, 3M asked early customers              fan-stores. One option, favoured by Domino’s
to advise them on how the brand should best                   pizza19 and others, is to offer financial incentives
be marketed, and how they should advise other                 for advocacy, in the form of discounts and
users on how best to use the product. This                    rewards for Facebook ‘Shares’ and ‘Likes’,
psychological involvement transformed a once                  especially those that result in new purchases –
disinterested and uninvolved audience into in-                just like the popular Amazon affiliates program.
volved and active advocates. It also transformed              A simpler alternative would be to offer fans
the fortunes of Post-it Notes – from failed
product to top selling office supplies brand.


18 – Jim Stengel, global marketing head for P&G quoted in
http://www.mediaweek.co.uk/news/162552/Procter---Gamble-target-teens-via-word-mouth/

22
                                                                                                        F - CO M M E R C E




‘social currency’ for their advocacy – something                Consumer brands have yet to systematically
that improves the fan’s social status among                     apply these insights from advocacy research
family and friends. For example, fans could be                  to their fan-stores, but one early illustration of
sent samples or discount vouchers along with                    how this might be done was a 2011 campaign
their fan-store purchases to hand out to friends.               by English indie rock band, The Kaiser Chiefs. In
Fans could even be offered information in the                   June 2011, the band launched their new album,
form of ‘inside scoops’ – surprising and disrup-                ‘The Future is Medieval’ and invited fans – via a
tive facts about the new product or product                     link on their Facebook page – to buy and down-
category that make them look smart in the                       load the album. But instead of downloading a
eyes of their peers.                                            ‘cookie-cutter’ version of the album, fans were
                                                                encouraged to compile the album themselves,
In sum, if the goal of a Facebook fan-store is                  choosing 10 tracks from a selection of 20, and
to activate brand advocacy by turning brand                     then adding their own cover-art. After purchase,
fans into vocal brand champions, then research                  fans could then share their personalised version
into brand advocacy points to a simple 3-point                  of the album, and if friends purchased it too,
advocacy activation formula:                                    they received a 13% commission on any sales.


/ Experience – Give fans a ‘get-it-first’ op-                   In this way, the Kaiser Chiefs fan-store used
    portunity to buy new products worth talking                 each of the three advocacy activators – en-
    about.                                                      gagement, involvement and incentives – to
                                                                turn fans into advocates. As such, it could be a
/ Involve – Make purchase contingent on                         proto-typical blueprint for fan-stores designed
    reviewing the product or voting on some                     to turn fans into active advocates.
    aspect of how it is marketed.


/ Incentivise – Reward consumers for spread-
    ing the word – financially and/or socially
    (discounts, samples or news to share).




19 – http://socialcommercetoday.com/social-commerce-the-rise-of-the-widgets/

                                                                                                                      23
ACTIVATING – ADVOCACY WITH FAN MERCHANDISE




If the core purpose of a Facebook fan-store is to activate
fan advocacy, then the primary solution for doing this is
to offer fans ‘get-it-first’ new product experiences, ideally
using involvement and incentives to amplify the resulting
advocacy.



In addition to creating advocacy around new          / Sports team brands such as Arsenal, FC
products launches, fan-stores also have the             Liverpool, FC Barcelona and Miami Heat
opportunity to generate advocacy all year               all sell fan merchandise direct from their
round. The simple solution for achieving this           Facebook stores.
may be to offer fans exclusive fan-merchandise.
By allowing fans to wear a brand, sometimes          / Music brands from Lady Gaga, Justin Bieber,
quite literally, on their sleeves, fan merchandise      Rihanna and Katy Perry to Bob Marley, the
increases the opportunity for brand conversa-           Beatles and Bon Jovi all sell fan merchandise
tions to take place, and thus brand advocacy.           from their Facebook pages.
It should therefore be unsurprising to learn that
this is exactly what a number of leading brands      Branded fan-merchandise can activate advocacy
are doing with their Facebook stores – using         by giving brand fans something to talk about,
them to sell fan merchandise. In addition to the     an excuse to advocate the brand to friends and
examples from Procter & Gamble and Coke              family in the absence of a new product to laud.
noted above, other brands are using Facebook         In this way, consumer brands have not one,
to sell branded fan merchandise:                     but two key opportunities for igniting brand
                                                     advocacy with Facebook fan-stores – offering
/ Westin Hotels doesn’t sell hotel rooms from        ‘get-it-first’ new product experiences, and
     its Facebook brand page, but it does sell       offering fans exclusive fan merchandise. The
     branded fan merchandise – robes, candles,       merchandising opportunity for brands is to
     towels, sheets, and spa products.               design fan merchandise specifically to trigger
                                                     advocacy with products that are new, original,
/ Publishing brands including Penguin books          exclusive, surprising (expectation-beating),
     sell fan merchandise from fan-stores such as    exciting, symbolic, and satisfying. One specific
     the popular ‘Penguin canvas bag’.               opportunity would be to create fan merchandise
                                                     to accompany advertising campaigns in much
/ TV show brands including Desperate                 the same the way that Procter & Gamble has
     Housewives, Dexter, Grey’s Anatomy, Jersey      done with its ‘Smell Like a Man’ Facebook
     Shore, Lost, and Supernatural all sell fan      campaign store. Since we know that advertising
     merchandise direct from their Facebook          effectiveness is significantly enhanced when
     pages.                                          a campaign is accompanied with brand advo-
                                                     cacy 20, campaign themed fan merchandise could
                                                     significantly enhance advertising ROI.



20 – See Hogan et al 2003

24
                                                                                         F - CO M M E R C E




FUTURE TRENDS




F-commerce for consumer brands is new and experimen-
tal, and future trends will depend on how successful f-
commerce turns out to be at achieving brand objectives.
The future of f-commerce is not set; there is no fate but
that which brands make for themselves.



Nevertheless, if one of the key brand-building    / Analytics & logistics – The use of fan-stores
benefits that f-commerce delivers is activating      by consumer brands will spawn new entities
advocacy among brand fans, then a number of          in the f-commerce ecosystem; specialized
future trends are likely to emerge:                  fan-store analytics and metrics, and new
                                                     specialist fan-store logistics companies of-
/ Systematic ‘fan-seeding’ – Consumer                fering fulfilment and drop-shipping services.
   brands will use Facebook fan-stores in a
   more systematic manner for seeding new         / Digital and virtual goods – Growth in
   products with brand fans.                         fan-stores will be driven by high-involvement
                                                     categories offering the instant gratification
/ Viral fan-stores – To promote advocacy,            of digital downloads: music, movies, TV,
   fan-stores will become increasingly viral;        gaming, publishing and sports (premium
   appearing as shareable stores in newsfeeds        Facebook streaming), ticketing, and digital
   and using viral mechanisms to promote             merchandise.
   advocacy such as samples, vouchers and
   social currency (disruptive and surprising     / Facebook Credits – As Facebook Credits
   news) to share.                                   gain traction, fan-stores will increasingly
                                                     allow frictionless fan payment with Credits
/ Empowered involvement – Facebook                   for both digital and physical products (if the
   fan-stores will increasingly integrate the        ‘beta’ commission rate on Credit purchases
   ‘involvement’ advocacy activator into the         (30%) is reduced to market norms).
   fan-store experience – for example, by
   making fan-first access contingent on          / Fan-store agencies – We will see the emer-
   video-reviewing a new product.                    gence of specialist agencies and agency
                                                     competencies for managing Facebook
/ ‘Pop-up’ fan-stores – Consumer brands will         fan-stores for consumer brands, offering
   increasingly use temporary fan-stores to          a turnkey brand-literate service.
   support not only new product introductions
   but also advertising campaigns, events and
   other brand activities.




                                                                                                       25
/ Fan marketing – If ‘fan-first’ marketing on
     Facebook proves successful, we may see the
     emergence of a new era of ‘fan marketing’
     with marketing campaigns and special
     products designed specifically and uniquely
     for brand fans and made available via
     dedicated fan-stores. This trend may already
     be underway; Warner Brothers sells fan-only
     special editions from Facebook fan-stores,
     Simon & Schuster offers fans, and only fans,
     special author-signed books, and Disney
     Studios offers fan-only VIP services to
     Facebook fans such as a group-buy facility
     to see new Disney movies.


/ Beyond the brand – If Facebook fan-stores
     prove to be successful, we will see the
     emergence of a new type of fan-store
     that, rather than being brand-centric, will
     be interest-centric; fan-stores for fans
     of sports, interests and activities selling
     curated bundles of gear from a range of
     different brands. The opportunity for brands
     will be to curate these fan-stores with
     non-competitive brands.




26
                                                                                                         F - CO M M E R C E




CONCLUSION: START WITH THE SMILE AND LEAD




The central recommendation of this report                    Ultimately, f-commerce for consumer brands
is simple: Consumer brands can build brand                   will not succeed or fail based on processes, but
advocacy with ‘fan-first’ marketing using                    on the ability to act on the insight that making
Facebook fan-stores to get new product lines                 your fans smile is smart for business. A smile
and fan merchandise into the hands and onto                  converts to loyalty and advocacy, two of the
the lips of those most likely to recommend them              most precious commodities for brands. Provid-
– their Facebook fans.                                       ing fans with a privileged point of purchase is
                                                             simply walking the talk of making brand happi-
There are no cookie cutter recipes for setting               ness your business model; fan-stores for brand
up successful Facebook stores for your brand                 fans are nothing more nor less than a ‘smile
fans; f-commerce is too new and experimental                 delivery channel’, providing the people who
for that. The best that brands can do is adopt               manage your brand in real life, the brand users
a strategic approach to f-commerce, adopt-                   who ultimately pay your salary, with an experi-
ing something similar to the LEAD approach                   ence worthy of a smile. Facebook fan-stores are
proposed by McKinsey that is designed to                     about growing smiles, not sales. So the best
de-risk innovation in social media21:                        advice for embarking on an f-commerce journey
                                                             is to ask yourself how you can make your
/ LISTEN – First listen to your Facebook fans:               customers smile with a privileged and personal
   Do they want a privileged and personal point              point of purchase on Facebook, and work back
   of purchase on Facebook, and if so, what                  from there.
   would they want to buy?


/ EXPERIMENT – Limit initial investment to a
   small scale fan-store and experiment with
   how you can use it to drive advocacy.


/ ADAPT – Adapt your fan-store into an
   outcomes-driven solution based on fan
   feedback and on what drives advocacy
   in practice.


/ DEVELOP – Continuously develop your
   fan-store, improving the fan experience
   as new opportunities emerge.




21 – https://www.mckinseyquarterly.com:443/Business_Technology/BT_Strategy/Managing_beyond_Web_20_2389

                                                                                                                       27
ABOUT SYZYGY




Syzygy is a full-service agency for digital marketing and communi-
cation. We create brand experiences through all relevant channels.
And we get inspired by digital technologies. No matter if it’s website,
multi-touch device, social media or smartphone app – it’s gonna
be spectacular.

Syzygy has been involved with f-commerce since its inception –
opening the first agency B2B store on Facebook and coining the term
‘f-commerce’ itself. Together with Dr. Paul Marsden, social media
strategist of Syzygy Group, we run ‘Social Commerce Today’ –
the Web’s premier resource for news, analysis and comment on
the use of social media in the context of commerce.

Syzygy is part of Syzygy Group, a group of specialist talent in
interactive marketing with 280 employees, and offices in London,
Frankfurt, Hamburg, Warsaw and New York..

socialcommercetoday.com




28
                                                                 A B O U T SY Z YGY




CONTACT US




 
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For more information please do not hesitate to give us a call.




                                                                               29
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McKinsey Quarterly, June.

Charlett, D. & Garland. R. (1995) “How Damaging is Negative Word of Mouth?” Marketing Bulletin, Vol. 6, pgs 1-9.

Chung, CMY, Darke, PR (2006), “The consumer as advocate: self-relevance, culture and word-of-mouth”,
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Cova B., and Pace S. (2006), “Brand Community of Convenience Products: New Forms of Customer Empowerment –
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Day, G. (1971), “Attitude Change, Media and Word of Mouth,” Journal of Advertising Research, 11 (6), 31-40.

Derbaix, C. and Vanhamme, J. (2003), “Inducing Word-of-Mouth by Eliciting Surprise – A Pilot Investigation,”
Journal of Economic Psychology, 24 (1), 99-116.

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