Advertising drives consideration, conversations drive sales. It’s the mantra of social commerce, and the central tenet of Facebook’s plan to monetise its enormous user base. While the social networking site’s current valuation is a juicy bet on the future value of its consumer data, the firm is likely to see a more immediate return from e-commerce: providing a platform for online retail brands to segment and target customers more effectively.
What Facebook wants to replicate, says head of international business development Christian Hernandez, is the mall effect, where groups of mostly young shoppers congregate, share information and offer mutual advice. Facebook allows brands to create virtual malls on its platform by allowing users to “like” particular products, automatically alerting friends via status updates. And offers can be delivered in real time, adds Hernandez. “Because you liked that red dress on Asos but didn’t buy it, Asos can send you a message through Facebook to say it’s now 30 per cent off.”
E-commerce has traditionally been a relatively lonely pursuit. More than one person can in theory hunch around a laptop, but with social media’s help, large groups of buyers can combine to drive deals (Groupon) share content (Twitter) and influence buying decisions (Facebook) much more easily.
Social proof is an important influencer of purchasing decisions, hitherto missing from the online retail experience. Facebook’s partnerships with brands such as Levis represent a new opportunity for low-cost, highly effective marketing. The future of search is human.