What the Facebook?
While visiting Florida last October, I noticed a wall of gift cards near one of the checkout counters at a Target store. Gift cards are big business these days and many retailers are getting in on the action. With all of the options available, one brand really jumped out at me. It was a gift card for Facebook. The current incarnation of these gift cards assigns Facebook Credits into your Facebook profile, which can be used to buy stuff like virtual tractors in the popular online game, Farmville, or toward other virtual goods. These are the early days of the virtual goods economy (you’re already taking part if you’ve ever bought a song on iTunes or an app for your smartphone), but this is also the very early stage of F-Commerce, or Facebook Commerce.
Facebook is huge and continues to grow at a staggering pace.
With more than 500 million members, if Facebook were a country it would be the third largest by population after China and India. Last month eMarketer reported that Facebook reaches the majority of Web users, saying that 132.5 million Americans will use the site. Facebook will reach almost nine in ten social network users and 57.1 per cent of all Internet users, eMarketer added. Soon after that, an Ad Age/Ipsos Observer survey of digital media habits reported that 75 per cent of Facebook users have "liked" a brand as well. When you put these pieces together, it’s clear that should Facebook look at creating a currency within its network, it could become a dominant global force in monetary transactions.
The arrival of Social Commerce.
For the past few years, many media pundits (including me) have lauded the arrival of Social Commerce. Once online social networking took hold, it became apparent that people liked talking about the brands they use and they respect the opinions of those in their social circle when it comes to making purchasing decisions. Shopping – by its very nature – is a social act and it was only a matter of time before social media-like tools became prevalent throughout the e-commerce world. Now, it’s hard to sell anything online if you don’t let your customers rate, review and share their collective experiences. In fact, at the end of last year, Facebook allowed its now infamous "like" button to be placed on anything online – from pieces of content to products and brands. Imagine the data and information that Facebook now has from all across the Web and mobile channels about what people like (along with who they are, where they live and who they are connected to).
The arrival of F-Commerce.
It seems like the last mile – actually having commerce take place within the Facebook domain – is under way, and this is a huge deal that every business should pay attention to. The conversation around social media was about building loyalty, trust and chatter around brands by using platforms like Facebook where people like to engage with one another. The challenge was in figuring out the analytics to link those social acts back to a sale in order to create a semblance of proper retail attribution. Now, all of that changes.
Now, there is actual commerce taking place within Facebook.
Have you seen the Best Buy Facebook Page? If you look at the navigation, you’ll note a tab titled, "Shop + Share." The antiquated Internet strategy of two years ago that insisted brands drive consumers back to their website is slowly dying. Why force people to leave Facebook to have a great Best Buy experience? Best Buy understands this new world of consumer engagement and if consumers use Facebook as the primary way that they stay connected to loved ones and friends, who is Best Buy to break up that party? Now, you can buy from Best Buy and even share your experience with your online social network without ever leaving Facebook.
It’s not just Best Buy.
P&G also entered the F-Commerce fray last year with Pampers. Parents no longer have to leave Facebook to buy Pampers online. The brand choice of Pampers for P&G is interesting as the CPG giant constantly leverages its own data and analytics to develop the most ideal marketing outcomes. It’s a clear indication that those who think that Facebook is just a bunch of university students trying to hook up are sorely misinformed.
Let’s do the math…
Facebook has close to 600 million members. It has its own currency system in place, called Facebook Credits. Facebook Credits is the default monetary exchange system used on the Facebook platform. Brands are being talked about and engaged within the Facebook platform. Some of these brands are paying a premium to sell within Facebook. As Facebook extends its platform into any and every digital space (websites, blogs, smartphones, etc.) and people have a level of trust in the security of their Facebook Credits, it’s not out of line to think about what the major implications of F-Commerce might be on the future of business. Think about the money being exchanged on iTunes in terms of gift cards, etc. . and take another look at Facebook’s statistics.
In a globalized economy where exchange rates fluctuate based on geo-local politics and economics, how do you think this will affect our world when everyone (everywhere) is also using the same monetary system and virtual credits?
The above posting is my twice-monthly column for the Montreal Gazette and Vancouver Sun newspapers called, New Business – Six Pixels of Separation. I cross-post it here with all the links and tags for your reading pleasure, but you can check out the original versions online here: