The new face of retail

With retailers beginning to transact by opening stores within social media platforms such as Facebook, Joanna Perry takes a look at the payment issues that arise

For anyone born before 1990, the idea of shopping on social networking sites, rather than just the retailer’s main website, might seem an odd idea.

But retailers are beginning to build on the marketing presence they have developed, on Facebook in particular, by opening stores within the social network. Unlike retailers’ previous forays into virtual stores – such as within the game Second Life – this time the purchases being made are very much for real.

And though the phenomenon of F-commerce, as it has been dubbed, is far from mature, there are enough retailers around the world developing stores on the Facebook platform for it to be a trend that’s worth a second look.

But how do you handle payment if you create a Facebook store and will there be a push to encourage users to pay using the social network’s own Facebook Credits currency?

In the UK, Asos has had a Facebook store since January 2011. It claims to have been the first to market within Europe with a fully-integrated store on the social network. Existing Asos customers are able to use their Asos log-in details to add products to their cart and checkout within the social network. Eight different payment methods are accepted, including all the major card schemes and PayPal, in the same way as for its main site.

Safety first

One of the notable points to make about Asos’ Facebook store is that the checkout has lots of strong messaging on security. The etailer assures customers that their payment details will not be shared with the social network or publicly exposed on their profile, for instance, as a result of completing a transaction this way.

A message on the checkout page says: “You are viewing a modified version of Asos within Facebook, rest assured your payment & account details will only be seen by Asos.” And the checkout button reiterates this, saying “Pay Securely Now”.

PayPal director of platform and innovations John Lunn says it is not surprising that retailers are emphasising the safety of purchasing through their Facebook stores. “If you are doing a normal transaction on a retailer’s ecommerce site then it is a one-to-one transaction. On Facebook, the concept is all about sharing, so
people want to know how much is being shared.”

Lunn adds: “La Redoute in France is using Facebook, as is Asos, but generally it is not as mature as a route to market as it could be. There is a bit of resistance to over-commercialisation of social media.”

The best way to pay

There are several ways that retailers can handle payment in a Facebook store. The first is to redirect users to another page outside Facebook where they can pay, or they can create a lightbox that hovers over the page in the Facebook store.

Lunn says La Redoute is using the lightbox option for PayPal payments within Facebook, but it is also possible to direct customers through to PayPal for the transaction before directing them back to the social media site. For larger payments, he prefers retailers to redirect to PayPal so the payments provider can carry out enhanced security checks.

There has been some debate about the likelihood of Facebook wanting to introduce its own currency for physical goods bought through the site. The social network allows users to purchase Facebook Credits using credit cards, PayPal or their mobile phone, and, at the moment, they can be used to pay for virtual goods; for instance, in game apps developed for the site.

Facebook UK strategic partner manager Gavin Sathianathan says the company has no plans to launch Facebook credits for physical products. Facebook takes a 30% cut for credits payments and retailers do not have adequate margins to support this.

Social networks are a very immature channel to market for retailers. But if the results stack up quickly for the early adopters then others will want to move quickly.

Making sure you can convince customers that their payments will be secure is an important first step.

Retail Week

Amazon Opens Shops On Facebook

It’s about time that one of the earliest pioneers of online commerce opened up shops on Facebook. Yesterday Amazon’s subsidiary Quidisi opened up a few stores selling household items on the social network.

Quidsi, which was acquired by Amazon for $540 million last Autumn, has created electronic commerce pages on Facebook for Soap.com, BeautyBar.com and Diapers.com. These are companies owned by Quidsi, and their social network presence together amounts to about 60,000 fans.

When you go to Soap.com’s Facebook page, you see a tab called “My List” where you can search for and purchase products all within the social network. The shopping cart on the site looks like a more sophisticated, cleaner version of the one on Amazon.com, and lets you confirm what you want to purchase. The tool also tracks your order, and encourages you to “like” the product.

This is clearly a trend that's growing. JC Penny already having a facebook store and other retailers following closely behind. If customers are too time poor to go to your store, take your store to them!

JCPenney Sets Up Shop on Facebook

JCPenney has set up shop on Facebook, allowing consumers to buy the company’s clothes and tell their friends about it.

The retailer worked with Usablenet on the site, which also lets users “like,” share and review products.

JCPenney currently has 1.3 million fans on Facebook. The company moved closer to Facebook integration in October when it began running Facebook “like” buttons in its banner ads.

JCPenney’s not the first retailer to sell its wares on the world’s largest social networking site. 1-800-Flowers started offering Facebook-based transactions last year and in August, Delta Airlines began letting users book tickets from its Page. Procter & Gamble also runs an e-commerce site on the network.

Check out the site:
http://www.facebook.com/jcpenney?v=app_174296685928910#!/jcpenney?v=app_174296685928910

Todd Wasserman for Mashable

Walmart Launches Crowd Saver Deals via Facebook

US giant Walmart has recently launched 'Crowd Saver' promotions through its Facebook page, allowing deals to become active when enough fans “like” a proposed item. The special prices are only available through Walmart.com, and each customer may only buy one item at the discount. It features electronics, toys, and home items.

It's a simple supply and demand model really, so if Walmart gain enough traction from a particular product they can buy it at a better price. It's much like the way IKEA have been able to launch it's massive 'new lower price' campaign this year. They have been able to offer better prices on the products that sell the most as they negotiate stronger deals with their suppliers. Well, that coupled with the buying power of the Australian dollar of course.

Facebook retail 'deals'

Facebook has a new offer for users willing to share their locations in status updates: deals from nearby merchants or big-brand marketers such as Starbucks, Gap or McDonald's. Facebook is launching the Deals service with 22 big brand partners -- Starbucks, McDonald's, H&M, and Gap -- and 20,000 small-to-medium-sized businesses can start creating Deals on their Places page inside of Facebook.

The social network announced "Deals," an extension of its Places mobile feature, which allows users to check in at locations such as bars, coffee shops or malls. Users will be able to claim those deals by walking into a merchant and checking in on their phones or other mobile devices, giving marketers the ability to reach consumers and potentially attracting them into a given store.

The new service combines two of the hotter trends in local marketing: location-based check-in services such as Foursquare, and local group deals services such as Groupon or LivingSocial. "There are many changes in mobile, and there's a revolution in the social space," said Mark Zuckerberg, founder and CEO of Facebook, which has 200 million mobile users. "Mobile is as big as that -- when you combine mobile and social, industries can get disrupted."

But like everything Facebook does, it has the potential of taking a niche phenomenon now exploited by a coterie of small startups and turning it into a mass phenomenon. "While businesses have been able to use other geolocation services to incentivize customers to some extent, Facebook Deals allows global brands to do so at massive scale," said Michael Lazerow, CEO of social marketing firm Buddy Media.

Facebook announced the Deals Platform and another feature called "Single Sign On," which allows users to log into any app on their iPhones and Android phones, eliminating the need for remembering passwords and typing on tiny mobile keypads. There are 550,000 games and applications available on Facebook, and developers can now build the single sign-on into any of them or build new apps with the feature.

Facebook is launching the Deals service with 22 big brand partners -- Starbucks, McDonald's, H&M and Gap -- and 20,000 small- to medium-sized businesses can start creating Deals on their Places page inside of Facebook. Merchants create a Facebook page where there is an option for choosing the kind of deal they would like to offer: individual, loyalty, friends or charity. Individual and loyalty offers are digital
versions of the traditional coupon and loyalty cards, where a customer gets a punch hole for every coffee or sandwich purchased. The friends offer is a strictly Facebook style deal, where if a user checks in his or her friends, they get a discount. The charity deal is where the merchant will donate $1 for each check to a charity.

"The Deals concept solves the long term," said Facebook's director of local, Emily White. "For a long time, merchants have been told to get online. This solves that problem for them and turns the fans into real dollars."

Gap decided to immediately participate in Deals, offering 10,000 pairs of jeans for free to all users who check into one of the 900 Gap stores nationwide. "It's important for us to connect with our customers where they are," said Olivia Doyne, a Gap spokeswoman on hand at the event at Facebook headquarters in Palo Alto. "This can be used in so many ways. If a store has too much inventory, we can use Deals for that. We can tailor the deals to our customers' locations."

Facebook does not earn money in the Deals promotions, and Ms. White said this project is very much in a beta state. But inadvertently, by having more businesses create pages on Places and having more people checking into those businesses, there will be a natural increase in Facebook traffic.

Marketers have long seen mobile phones as a powerful means of reaching consumers while they're out shopping or physically close to a given store. "This is continuing Facebook's empowering of small businesses," said Dave Marsey, senior VP of Digitas digital media. "We're gonna see the biggest response with small local businesses that can more directly and electronically manage attracting new customers and rewarding loyal customers."

Mr. Zuckerberg said that, as always, Facebook's focus is to make things better for users. "Whether the deals platform turns into something more commercial, or we choose to monetize something else -- though we have no plans of doing that any time soon -- that works for us too."