November 7, 2012, 3:18 PM

Facebook puts greater emphasis on e-commerce

A former eBay exec now working at Facebook explains how and why.

Lead Photo

Nicolas Franchet

Facebook Inc. has turned serious about e-commerce.

That’s clear from the social network’s recent moves, such as its launch of Facebook Gifts, which enables U.S. shoppers to buy their presents for friends, and Collections, which offers a new way for retailers to present their products to Facebook users.

Gifts is live with a small percentage of Facebook users as the social network slowly rolls it out to other consumers on the social network. Collections, which launched as a test before being “paused” after only a few weeks, remains in product development. However, Facebook will relaunch Collections soon, says a spokesman for the social network.

Facebook’s newfound focus on e-commerce is also clear from its April hiring of eBay Inc. executive Nicolas Franchet to head up its e-commerce global vertical marketing team. He reports to David Fischer, Facebook’s vice president of marketing. The move is part of a broader effort by Facebook to focus on the specific needs of marketers in a variety of verticals, including e-commerce, automotive, consumer products and gaming.

“As Facebook has grown, we’ve realized that it’s important to get close to the industries we serve because we are such a broad platform,” Franchet says. Because of Facebook’s wide-ranging ad offerings, as well as its other tools, marketers often need direction, he says. In particular, they need guidance understanding how others have successfully used Facebook to achieve their particular goals, be they acquiring new customers, driving sales or building loyalty.

Franchet—who has held a number of positions at eBay, most recently senior director, U.S. fashion, and sits on the board of Shop.org, the digital division of the National Retail Federation trade group—has close connections to the e-commerce industry. That enables him to understand its unique needs, he says.

Take retailers’ most basic goal: driving sales. Many analysts, including Sucharita Mulpuru-Kodali, vice president and principal analyst at Forrester Research Inc., say social media hasn’t been effective at spurring shoppers to make purchases. Franchet and his colleagues, though, have tried to develop tools that align with tactics that lead shoppers to make a purchase, such as a good deal.

That’s the idea behind Offers, which Facebook launched earlier this year as a free tool that marketers can use to create promotions that appear in consumers' news feeds. The social network in September began requiring businesses to pay for ads that increase the prominence of the Offers.

The tool has helped some retailers acquire customers. Coastal Contacts, for instance, ran an Offer for a free pair of eyeglasses that more than 400,000 consumers claimed. When a consumer claims an Offer, that information is shared on many of her friends’ news feeds, which includes the latest posts from friends and companies that a consumer has Liked. The news feed placement explains why 74% of shoppers who took the Offer were friends of the retailer’s fans, not fans of the retailer itself. “The claims they got went viral,” says Franchet. And the deal drove sales (shoppers paid shipping and handling fees, as well as for upgrades such as scratch coating or bifocals).

The tools Facebook has recently rolled out stand as the social network’s initial foray into e-commerce, says Franchet. “What we need to do, what we want to do, and what we are doing is building new products that map well to retailers’ objectives,” he says.

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