There are 600 millions users on Facebook and 70 percent of them are outside the US; Facebook commerce is the topic at the front of every brand marketer’s mind. Though seemingly premature, retailers are starting to explore how they convert brand enthusiast “likes” into purchases.

In Mark Zuckerberg’s first interview on 60 Minutes in 2008, he spoke about the power of Facebook as a shopping tool.  Referring to a scarf from Bloomingdale’s, he offhandedly suggested that if your friend or someone you respect as an expert bought that scarf and “liked” that scarf, it would make it a more attractive scarf to you as a consumer to purchase.

Three years later, retailers clearly recognize the power of “F-Commerce,”with more than half of the top 25 retail sites like eBay and Amazon integrating the “connect with Facebook” feature into their sites at the very least of their social extension into the largest social network in the world. Retailers and brands are now going a few steps further, experimenting  with different forms of Facebook commerce. From a simple “connect with Facebook” feature to full e-commerce integration, all the ways to shop via Facebook are showing signs of success and revenue in the low millions of dollars.

Pop-Up Shops & Insider Shopping Events

In August 2010, Rachelle Roy launched a fan-only pop-up store on Facebook. The insider shopping event gave the brand’s Facebook fans early access to Rachel Roy’s new jewelry line collaboration with British R&B artist Estelle. The pop-up store lasted three days and launched with a limited edition jewelry collection.  The collection featured an exclusive, limited edition piece that sold out in only six hours.

During the three day campaign, Rachel Roy’s fan base grew by 25 percent in the first day and 100 percent by the end of the campaign.  The Facebook page was acquiring 1 fan every 1.5 seconds.

The Rachel Roy pop-up shop was built on a productized software-as-a-service solution, Fluid Social Fan Shop.  Peter Goldie, the Vice President of Marketing at Fluid Agency, an e-commerce firm whose clients include Diane Von Furstenberg, Nine West, Theory, Vans and Coach, believes that retailers need to create engaging social merchandising experiences that increase a brand’s fan base while driving transactions.

At the same time, digital savvy retailer Coach launched a pop-up shop as part of it’s Poppy Campaign. Within an hour of the announcement of their Poppy handbag pre-sale, Coach had 1,000 likes and 100 comments.

“Marketers are always looking for ways to drive customer purchases,” says Goldie. “Having limited edition, time sensitive sales helps retailers drive sales without having to discount.” Goldie added that pop-up shops are a great way for brand manufacturers to test the e-commerce waters without going into full scale website development.

“Few retailers are delivering premium Facebook shopping that not only rewards fans but pulls them into a deeper relationship with the brand,” says Goldie. “Slapping a store on Facebook doesn’t deliver.  Fan Shop enabled Rachelle Roy and Coach to create immersive brand experiences that fully integrate shopping as well as the shopper’s wider social network.”

Private, Fan Only Sales

In August 2010, Philadelphia-based Kembrel launched a private shopping community for students that sold them clothing, books and computer gadgets at 40-75% off – and they did it via entirely via Facebook. Kembrel’s summer beta period successfully attracted over 20,0000 registered student members. This initial growth was mostly organic through word of mouth, with little reliance on traditional marketing.

“The total market is 17 million students and every year, they spend over $300 billion. Now two thirds of that $300 billion dollars [goes towards] school, housing, food and essentials.  There’s $100 billion dollars spent on apparel, shoes and accessories, and that’s the market we’re going after,” said CEO Cherif Kembrel.

What makes Kembrel’s private sale model unique is that the marketing strategy completely relies on the social behavior of participating college students to drive consumption. The product assortment is tightly curated by young buyers who understand the student market; the day-to-day student activities are also student-run. To date, there are also over 250 brands that have signed up to reach students through the Kembrel platform.

“College students spend 2-3 hours a day on Facebook. By bringing our store to where our customers spend the most time online, our goal is to provide them with the most convenient and relevant shopping experience,” Cherif Hambib, Kremel’s CEO, shared with me.  Krembel is taking student relevance a step further by launching an internship matching service for fashion students whom are members of the site in order to merge the shopping experience with its community experience.

“The real definition of social commerce is being able to share what you’ve purchased and solicit opinions from your social circle. Retailers need to know why their target customers buy; the social sharing of products facilitates this.”- Cherif Habib

Wish List Features:  Bulgari

Luxury retailers are starting to explore Facebook as a revenue channel, as well. In Feburary, Bulgari launched a wishlist feature via Wishpot, a universal wishlist and registry service that lets retailers save things from stores all around the web as well as right on Facebook.  Bulgari fans can also purchase select jewelry through the app.

“Facebook has transformed itself into a Social Shopping Network. The next step is commerce. Facebook has replaced Google as the number one online search tool. With shoppers addicted to Facebook, it makes sense that it will shape the future of retail and become an important revenue channel.” says Ruth Staiman, President of The Fashion Office, a luxury marketing consultancy.

“Bulgari has developed entry-level priced jewelry, leather goods and perfume perfect for the Facebook audience.  A new customer who has never been in the Bulgari Store on Fifth Avenue or Via Condotti can access the brand in the comfort of their Facebook world. Leighton Meester, our favorite Gossip Girl, is the face of Bulgari’s new Ceramic and Silver Reincarnation of the B.Zero1 design that benefits Save the Children. The opportunity to create a personalized luxury gift for a Facebook friend priced at $370 with a portion of the proceeds going to Save The Children is nothing short of brilliant.”

If you’re working long days, a laptop or iPad provides access to most of the luxury goods on Avenue Montaigne or Madison Avenue. Why go to the mall?  You can move a lot faster online and complete an entire day’s worth of “real life” shopping in an hour or two. – Ruth Staiman, @FashionOffice

Facebook E-Commerce Apps

Are you a small to medium sized retailer that wants to set up shop on Facebook on a shoestring budget? Well, San Francisco-based Payvment has created a solution for you – and it’s FREE. The company’s software allows retailers to create Facebook storefronts that accept payments via credit cards or PayPal.

Payvment’s e-commerce app allows anyone with a retail store to set up shop on Facebook and create a compelling storefront, offer discount and incentive programs, the ability to complete your purchase within Facebook and auto prompts to become a fan of a store in order to receive site-only deals. The app offers unique features for shoppers as well, allowing them to carry their goods with them across thousands of Payvment-powered storefronts on Facebook.

Can you imagine shopping at Nordstrom’s and being able to buy your shoes, accessories and clothing at one register instead of in each individual department? That’s what Payvment’s app does, but on Facebook.  According to Payvment’s Chief Executive Officer, Christian Taylor, the company has set up 250 new Facebook retailers daily and currently hosts more than 40,000 retailers and offers more than 750,000 items, including all-natural cosmetics, handmade jewelry, and T-shirts. Notable shops include Grayce By Molly Sims, Yes To Carrots and Cartoon Network’s Adult Swim UK.

“Unlike shopping in-store or on a company website, Facebook’s APIs encourage a more personalized shopping experience, shaped by users’ social behavior and friends’ suggestions,” said Jason Taylor  vice president of Platform Strategy at Usablenet.

Full E-Commerce Integration

In fashion, sometimes a retailer has to go big or go home, and that’s exactly what UK retailers ASOS and Young British Designers have done. In January, ASOS launched the company’s entire 150,000 products on Facebook in hopes of increasing revenue from mobile commerce; which currently amounts to just $1.5 million or about 3 percent of its revenue.

Another UK retailer, Young British Designers, launched a fully integrated Facebook store a few hours after the ASOS store went live. Both stores allow consumers to buy designer items, search products, add-to-basket, edit cart contents and check out securely. Both also have integrated social shopping features:  customers can ‘like’ items and ‘share’ and ‘tweet’ products that they purchase.

“Full e-commerce integration stands to benefit companies with a strong or sole e-commerce focus, particularly independent or boutique firms looking to stand apart from larger conglomerates,” says Jessica Quillin of Quillin Consulting, LLC. “The concept of a Facebook store is to combine direct marketing and online shopping into a fully-tailored, streamlined retail experience. Online fashion and luxury retailers, especially those that sell high-end goods, are a natural fit for full e-commerce integration simply because they cater to a sophisticated demographic with busy lives who likely crave a more personalized, quick-access shopping experience.”

It will be interesting to see how these two UK retailers’ deep investments evolve and what sort of revenue comes from them through aggressive social marketing initiatives that will clearly have to surround them in order to generate significant consumer dollars spent via their Facebook communities. Both ASOS and Young British Designers have solidified themselves as industry players, and all retailers and brands will no doubt be watching in order to copy or evolve the full e-commerce integration strategy.

Using Facebook To Drive E-Commerce Website Traffic

Online retailer Clothing At Tesco has generated over £2m in sales in the past year as a result of its UK Facebook page. Clothing At Tesco tracked its activity on Facebook using vouchers, finding that a campaign called Friday Frenzy resulted in more sales in two hours than it would usually get in a week.  Though successful, Tesco has shut down the Facebook commerce marketing efforts due to staffing and budgetary constraints.

The sales Clothing at Tesco generated were not from a shopping app or integrating sales into it community pages as noted in my Mashable article, it was in fact generated from fan engagement via its Facebook page. This resulted in traffic to main e-commerce site where they generated the dollar amount specified above.

“It’s estimated that in three to five years, 10 to 15 percent of total consumer spending in developed countries may go through social networking sites like Facebook. There’s money in this for all of the players involved,” said Mike Fauscette, an analyst at research firm IDC, told Business Week.

Three Things Retailers Need For F-Commerce Success

If you already learned How To Get Customers To Your Facebook Page and you’ve learned How To Create Facebook Ads and you have a group that you feel is sufficient to start selling your amazing products too, then there are three things that I believe retailers need to remember in order to reap the rewards of f-commerce:

1.     Remain Authentically Social: Being “social” is the whole point of social networking.  Brands and retailers should focus on creating meaningful interactions with their Facebook fans through brand and customer content before they focus on selling them anything.

2.     Augment the social aspects of your Facebook presence with e-commerce. Make sure your fans’ interaction content seamlessly translates over into their purchase experience.  This must live within the Facebook community, not redirect them to your main e-commerce site.

3. Monitor Facebook fan user behavior to develop incentives that turn fans into customers. Use Facebook’s internal tracking system, Facebook Insight, in addition to other analytics in order to develop coupons, deals, discounts or rewards programs that increase purchase conversion.

As Facebook expands as a social and e-commerce platform, retailers should focus on keeping fan experiences social and experiential, instead of focusing directly on monetizing the social network.  The current examples and studies are indicative of that.  In my opinion, Facebook will not replace a retailer’s main website as the premiere destination to purchase products, but early indicators show that it will become a meaningful revenue stream.

“40 percent Facebook users follow a brand and 15 percent of those fans intend to make a purchase from that brand within 60 days,” says Professor Scott Galloway of L2 ThinkThank. “Facebook is a transformative platform that need to be incorporated into every retailer’s marketing strategy. Over time, digital marketing channels will significantly reduce offline ad spends.”

Photo Credit: f-commerce image from Shoppables