Building Commerce Around Your Facebook Community

There have been many hot social media startups over the last few years, but few made the all-important leap to becoming a platform the way Facebook has. We’ve seen the depth and breadth of Facebook as new and enhanced features – including groups, email, and location services such as Places – are introduced and optimized to maximize the platform’s stickiness. And it has worked – time spent on Facebook surpassed Google last year and now averages 5.7 hours a month per user compared to 3.6 hours for Google, according to comScore’s April 2011 report. It seems we still can’t get enough Facebook. In fact, there appears to be no end to our ability to connect and share just about everything and anything happening in our lives with others including news, photos, and events, as well as where and what we are doing at any given moment. Therefore, it should be no surprise that F-commerce (Facebook commerce) is now emerging as a popular and acceptable place to shop.

The F-Commerce Explosion

According to a recent report by consulting firm Booz & Co entitled, “Turning Like to Buy,” more than 27 percent of consumers said they would be willing to purchase physical goods through social networking sites like Facebook. Additionally, social commerce sales are expected to reach $5 billion worldwide this year – with $1 billion coming from the United States. This is expected to grow sixfold to more than $30 billion worldwide and even more rapidly in the U.S. ($15 billion) by 2015.

So who’s leading the Facebook commerce charge? First and foremost, some of the largest and most recognizable brands including: Coca-Cola, Starbucks, and Disney.


Then there are the retailers both large and small across nearly every category including JCPenney, 1-800-Flowers, Nine West, and Equator Coffees and Teas.

Also quick to recognize the opportunity on Facebook are sports figures and franchises who are tapping into their ever-growing fan bases to sell tickets and memorabilia – NBA, Boston Celtics, Miami Heat, Oklahoma Sooners, John Elway, and more. Even non-profits are jumping in. Facing tough times in a rough economy, non-profits are increasingly turning to Facebook and the power of the social graph to connect with and expand their donor bases – like the Juvenile Diabetes Research Foundation, and the International Rett Syndrome Foundation. Finally, learning from their past mistakes and successes (i.e., Hulu), leading entertainment companies are building fan communities and generating additional revenue opportunities for their franchises – The Discovery Channel, Dexter, A&E Paranormal State, DOG The Bounty Hunter, The Bad Girls Club, and Pawn Stars.


More recently, movie studios like Warner Bros have shaken up the industry by experimenting with Facebook as an alternative digital distribution platform – offering movies including The Dark Knight, Harry Potter and the Deathly Hallows, Harry Potter and the Sorcerer’s Stone, Harry Potter and the Chamber of Secrets, Inception, Life As We Know It, and Yogi Bear for rental using Facebook credits. In fact, news of the test sent shares of Netflix tumbling by more than 6 percent or $650 million.


Why all the excitement? For brands, the power to leverage data, community, and the social graph has the opportunity to not only create unique and individualized stores and offers, but conversations around commerce. Specifically, users can now share what they purchased as well as their experiences with a brand or even individual product. For movie studios like Warner Bros, the Facebook platform offers an alternative to services like Netflix, whose digital influence via streaming continues to grow. In addition, and perhaps more compelling, is the Facebook environment offers individuals the ability to post comments and interact with friends, and perhaps at some point access the “star” of the film to create a unique experience. This experience, combined with the opportunity to obtain valuable feedback and to tap into the social graph opens a whole new world of possibilities for movie studios and big brands.

There is little doubt that F-commerce will increase in popularity as users spend more time on Facebook and increasingly turning to other’s opinions for the things they need. However, while this opportunity is big, it is important to note successful F-commerce requires much more. It requires an interactive approach including:

    • The ability to create engaging conversations.
    • The ability to offer value beyond “selling” and to form communities around a shared passion.
    • The ability to create unique social experiences.
    • The ability to grow trust and advocacy.

Done correctly, F-commerce has the opportunity to be one of the most important commerce channels this decade – driving both marketing efficiency and effectiveness.

Disclosure: Some F-commerce brands, including the NBA, Boston Celtics, and Equator, use Milyoni Technology. Michael Della Penna currently sits on the Milyoni marketing advisory board.

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