In its second-largest acquisition, Amazon buys the company for $970 million.
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“It’s all about convenience,” says Vib Prasad, the company’s vice president of web marketing and merchandising. “Why make our customers leave Facebook to buy something from us if they don’t have to?” The retailer has not disclosed how the change has affected sales.
Others are testing Facebook selling with special offers.
On Feb. 24, Procter & Gamble, working with interactive marketing firm Resource Interactive, allowed its Facebook fans to buy its new Pampers Cruisers with Dry Max diapers on its Facebook fan page nearly three weeks before the product would hit store shelves. In less than an hour, the manufacturer sold all of the 1,000 packs it designated for the effort.
The campaign, which the manufacturer aims to replicate with other Procter & Gamble brands, was an attempt to offer Pampers’ more than 215,000 Facebook fans something unique-and to do so on a web site they were already visiting, says a Procter & Gamble spokeswoman.
The Limited took a similar approach, offering a top-selling scarf in the days before Christmas for 30% off with free shipping on its Facebook page, which has more than 23,000 fans.
Fans saw the promotion pop up in their news stream, as they would a message from a friend, and could share the scarf offer with their Facebook friends. They could also buy the item themselves by clicking on the image, which expanded into a fully functioning shopping space where shoppers could complete the purchase. The scarf sold out in a matter of days, says Brian Seewald, the company’s director of e-commerce.
The sale sought to reward Facebook fans for being brand advocates, he says. “There was a sense of exclusivity to the sale. If you weren’t a fan, you couldn’t access the deal.” The Limited, which is also working with Resource Interactive, plans to offer up to six similar one-item sales throughout this year, he says.
Avon’s Mark is also seeking to use Facebook-specific promotions to create buzz. For instance, it lets Facebook members create online wish lists to share with friends. It encourages its sales representatives to push Facebook-only offers by posting comments or status updates that then appear on their friends’ news feeds.
Like 1-800-Flowers, Mark worked with Alvenda to enable customers to complete a transaction without leaving the news feed. When a customer mouses over the widget and clicks on it, it expands into a shopping space where shoppers can browse the retailer’s inventory, as well as complete the purchase.
Mark’s Frank declined to disclose sales, but she says that the company is happy with the early returns. But more than sales, the offering has piqued interest in the brand and boosted shoppers’ brand awareness, she says.
Word of mouth
For a much smaller e-retailer, Equator Estate Coffee and Teas, Facebook offered a way to offer limited-batch coffees not available on its web site, which Equator Estate is in the midst of overhauling. The Facebook store officially launched in January after a two-month trial period.
The Equator Estate web site is too cumbersome to constantly update with high-end offerings available in limited quantities, says Helen Russell, the company’s CEO and co-founder. “Being a small company it would be too costly and time-consuming to regularly add and remove those coffees from our web site,” she says. “With Facebook, those updates are instant.”
Aiming to take advantage of the social dimension of Facebook, Equator Estate lets its customers share their purchases with their friends, and the retailer’s fans, on Facebook and other social networks such as Twitter.
That kind of sharing might make sense if the purchase is special enough to be worth sharing, says Forrester Research Inc. e-commerce analyst Sucharita Mulpuru. “I may not mind sharing that I bought a ticket to go to a concert this weekend,” she says. “But most of my purchases I probably don’t want to share and other people don’t care about.”
The ROI question
In its two-month test, Equator Estate only sold about 20 pounds of coffee on Facebook. But Russell wasn’t overly concerned about the modest sales because the start-up costs were minuscule.
Working with e-commerce applications developer Milyoni Inc., the retailer spent less than $1,000 to get the page up and running, and pays Milyoni a sales commission of less than 5%. In comparison, overhauling the retailer’s web site cost more than $35,000. “Facebook was such a minimum outlay that, in my mind, the ROI is already there,” she says.
Milyoni competitor Alvenda is also trying to make its Facebook offer attractive to retailers. The company eliminated its upfront fees in November and now relies on sharing about 10% of revenue from Facebook sales, although the percentage varies depending on the specific retailer offering, the company says. There is a monthly minimum revenue-sharing amount, which can range from around $5,000 to upwards of $10,000 per month.
But not all upfront fees are minimal. For instance, Resource Interactive’s software generally costs around $30,000, although that includes the cost to integrate with a retailer’s e-commerce platform. Beyond that, Resource Interactive says it charges around $500 for each campaign and takes a share of revenue as a commission. It did not disclose the revenue share.
Whether that investment makes sense will depend on how much revenue a Facebook store can drive. 1-800-Flowers is betting it will be worthwhile to make it easy to shop on Facebook, just as it enables purchasing through mobile phones. “The more ways we enable shoppers to shop, the better,” says Ranford.
Other retailers aren’t so sure. But given how many consumers are regularly visiting Facebook these days, it’s easy to imagine that more retailers will give social selling a try.