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Facebook is set to become a big retailing player

Facebook is set to become a big retailing player

As Tescos looks to be locked into a gently downward spiral and the discount stores like Aldi and Lidl continue their relentless rise, the revolution and battleground of the retail market is set to be shaken up even more.

Facebook has shown its hand as it moves to become a retail outlet.

You Never Need to Leave Facebook

Josh Constine explained on TechCrunch how Facebook Tests Buy Button To Let You Purchase Stuff Without Leaving Facebook (7 July 2014).

The buy button is inside the News Feed posts and among the stream of ads that flow. It allows users to spend with other merchants while staying within the Facebook lock. Most observers dismiss Facebook’s assertion that this is for the ‘convenience’ of users, recognising it as the next stage in their (Facebook’s) dream of making serious money.

A man called Nicholas Franchet is Facebook’s global head of retail and ecommerce and his mission is to come up with ways of leveraging the ‘timer and attention’ people give to the social media site into shopping.

He told a press round table discussion in San Francisco, ‘we can offer a sheer reach that no other platform can.’ Advertisers want to move from click to purchase rapidly. The price of the FB ads can then rise. And go on rising.

In this respect, they are becoming like iTunes and the App Store, a retail opportunity if ever there was one. Google’s Shopping Express service is making the same kind of moves that FB now is.

In a revealing article on Wired in June 2014, Issie Lapowsky pointed out ‘The Hidden Agenda of Amazon’s New Phone’ is less what Amazon CE Jeff Bezos said will ‘solve all our photo-taking, outdoor-reading and home-shopping needs’ and more about helping Amazon ‘better compete with tech giants like Apple and Google in areas that extend well beyond the phone in your hand.’

As Marcus Wohlsen put it on Wired (21 July 2014), ‘As Amazon becomes more like everyone else, everyone else is trying to become more like Amazon.’

All They Need Is Your Credit Card

In the Facebook ‘buy now’ experiments, they tried various approaches of shaping ads to product listings and some users had the option of ‘automatically filling in shipping and billing information in online shopping carts using information stored on Facebook.’ But this is not an Amazon or Google clone idea.

The difference here is that search will not driving shopping on Facebook. Wohlsen described it as ‘browsing and discovering new things more like hanging out at the mall than going to the grocery store.’ Product discovery will be led by your likes, interests and friends as much as product price and features.

With a billion users’ preferences and social lives to analyse, they believe they will make it now so personalised to each user that to buy will be irresistible. It will over come the retailers’ nightmare of too many ‘shopping cart abandonments’ before a sale is completed.

‘Autosale’ is being tested. It works with retailers to pre-populate your financial payment details, so to click on OK is that much easier. Facebook’s Franchet said at that press discussion, ‘In a perfect world, you don’t have to check out.’

All you have to do to work this utopian vision, is to give them your card details in advance. Amazon already store card details, of course. Facebook now needs that data.

Just Pause for a Moment

Wohlsen wondered if people might have second thoughts ‘if they stopped to consider just how far Facebook’s reach could extend once that credit card number becomes another data point in their data profiles.’

The implication is that they have enough data already. Advertisers want to know which ads sell online or drive customers into physical shops. Facebook ‘could partner with a store that could in turn let Facebook know when a purchase is made using a specific credit card. Facebook could then match that number back to an individual user. Since Facebook knows what ads that user has seen, the company can essentially A/B test advertisements to figure out which ones drive more traffic.’

The question really for us all is, how much bigger do we want Facebook to grow? Or Apple, Google, Amazon for that matter?

Well, if the customer is always king, then the answer is visible in how big McDonalds, Coca Cola, Wall-Mart or Tescos grew. They will all grow on an ever rising curve.

Until the next new big thing comes along.

Other blogs on linked themes:

Holding Back the Facebook Tide, At Least in the Mind, 25 November 2013

If You’ve Ever Wondered About Ad-People’s Thinking Patterns, 3 June 2014

Who’d Bet On Whether Amazon, Google or Facebook Will Achieve Global Domination Now? 28 April 2014

Even Shopping That Is ‘Shoppertainment Theatre’ Will Not Excite This Reluctant Shopper, 7 April 2014

Young People Are Leading the Retail Market Revolution, 26 March 2014

Your Face When Shopping Is the Retailers’ Biggest Asset, 16 December 2013

Happy 15th Birthday, Dear Amazon, Happy Birthday to You, 28 October 2013

Image: vigneshkumar