Facebook Commerce Springing Up: No Plug-in Required

There’s been a lot of buzz about social commerce lately, including Bazaarvoice’s Social Commerce Summit earlier this month to discuss strategies and tactics.

Is a Facebook storefront necessary for e-commerce? How can reviews be promoted to encourage more sales? What social plug-ins should be included on e-commerce sites? Perhaps the concept of social commerce is just being over-analyzed. This week, Home Depot showed us that social media can be leveraged for commerce by simply combining a few core principles of persuasion marketing.

Home Depot’s Like-Gating Social Commerce Campaign

The afternoon of April 8, 2011 I came across this Home Depot status update on Facebook:

“Want to know what next item is? Here’s the deal, if we get to 250 ‘Likes’ on this post, then we will tell you what the next item is. If we get to 500 ‘Likes’ we will tell you what the second to next item is. Ready…GO!”

When I first saw the status update it only had about 300 “likes,” and within eight minutes of posting it, it had over 1,000 “likes.” A lot of buzz was certainly building around this post. I couldn’t tell what the “next item” was from the context, so I visited the Home Depot Facebook page to investigate. It turns out that Home Depot was having a Spring Black Friday sale and selling select items of limited quantity via Facebook at extremely reduced prices, up to 75 percent off.

I watched for the next item to be posted, frequently refreshing the page. When the next item appeared, I promptly clicked the product page link. Only two minutes had passed since it was posted, and all 150 “Rose Bistro Sets” had already sold out!

Over the three-hour Home Depot campaign, the fan base grew by an estimated 61,000 (28 percent) and all four Facebook-featured sale items sold out in record time, totaling $29,450 in revenue.

6 Key Takeaways to Home Depot’s Social Commerce Success

Without a fancy storefront or plug-in, Home Depot successfully generated revenue via Facebook. The following factors were instrumental in the success of its campaign:

Like-gating. Like-gating is a Facebook tactic where you require users to “like” something before revealing content. It’s most commonly used on Facebook pages to reveal a new landing page to fans. In Home Depot’s case, it was asking for a large quantity of “likes” on a status update to reveal new content. (Brilliant!) In turn, it drew a viral audience that anxiously anticipated the revealing of gated content or special deals.

Exclusive content. The offers were only available on Facebook, so fans following the brand had an inside scoop on exclusive deals. Custom landing pages were set up for each sale item. These eliminated distractions from the main website and optimized a path for completing the sale.

Special value proposition. Home Depot leveraged extreme discounts, 68 percent to 75 percent off, on products relevant to the season to identify a special value. Marketers could also use propositions like unique products (handmade, signed, etc.), one-time-only availability, testimonials, etc. to make products compelling.

Offer transparency. Within the limited space available in a Facebook update, Home Depot included the detailed product description, availability, pricing, and shipping costs. Providing both product and cost transparency eliminated the need for consumers to research their buying decision. Free shipping was offered upfront – a vital promotion since shipping costs can degrade discounts and deter online conversion.

Urgency and limited quantity. Beyond the great deal, Home Depot capped it off with extreme urgency. Its Spring Black Friday sale was only one day, and the next exclusive deal was only available in limited quantities while supplies last! (The availability window at that high demand was under two minutes.) The limited quantity also applied to the number of different products (only four) to be featured. If this campaign were run on a regular basis with seemingly unlimited availability, the buzz would be dramatically less.

To keep the urgency rolling, when products sold out, the landing page messaging pointed customers back to the Home Depot Facebook page to continue participating in the deals as though it was a game. For folks who didn’t “win” the product at the exclusive sale price, they likely felt urgency to respond faster the next time around.

E-Marketing Team Collaboration

Not to be forgotten, strategic coordination and cross-functional team collaboration are vital to planning such a campaign. Roles, skills, and tasks to consider:

• E-commerce/e-marketing: Plan and oversee campaign tasks and objectives
• Merchandising: Select products, plan pricing, and enter items in the e-commerce database
• Web designer: Design custom landing pages (optimized for conversion)
• Web developer: Develop time- and inventory-sensitive landing pages tied to the e-commerce engine
• Social media specialist: Manage Facebook updates, timing, and discussion

Simple Social Commerce?

Home Depot channeling Facebook as a Spring Black Friday/Home Shopping Network hybrid proved to be a stellar success. The company grew and highly engaged its fan base with exclusive deals relevant to the season in a manner that was easy and fun.

What do you think of Home Depot’s approach? Can you identify additional key takeaways for social commerce from this campaign? Would a Facebook Storefront provide a better user experience or better conversion? Let us know in the comments below!