By  on May 9, 2013

Cartwheel, Target’s digital savings program on Facebook, is just the tip of the iceberg for the mass retailer’s efforts to blend offers with social commerce.

The program, which launched in beta mode on Wednesday, provides shoppers with digital coupons they can share with friends. When a shopper claims an offer, it generates News Feed posts on Facebook. The more customers redeem, share and invite friends to join Cartwheel, the more rewards they receive.

The future of Cartwheel lies in personalized offers, geo-fencing and finding in-store locations, and algorithms that can suggest add-on products, said Eddie Baeb, a Target Corp. spokesman. “We’re excited that there are multiple ways to evolve this to the personalization element and knowing our guests better. This is just the beginning for Cartwheel itself and also for how much more integrated we can make the digital experience with the in-store experience.”

Asked whether there is an exclusivity period where Target is Facebook’s only mass retailer for digital savings, Baeb said, “I can’t answer that. We aren’t disclosing financial agreements. [Facebook] will maintain other retail partners just as we will have other social media partners. We have a very close and ongoing dialogue with Facebook and have worked with them on multiple projects.”

Target began talking to Facebook a year ago about developing a savings program that uses social media for discovering deals and sharing them with friends. “This is another component of going where our guests are going,” Baeb said. “We’re looking to integrate the digital experience. People love to generally share great deals and share exciting products. We certainly think there’s appeal for customers across the generations. The ease and convenience for guests with a smartphone is having offers with you at all times and being in a store and changing out offers and adding personalized deals.”

Baeb explained that a unique barcode is generated based on a consumer’s list of deals. If the customer wants to add a new deal while in the store, the barcode can be scanned at checkout.

John F. McNulty, co-chief executive officer and cofounder of Didgebridge, which measures the impact of digital advertising across multiple mediums, said, “The fatal flaw in most advertising is very simple, it’s intrusiveness.” Cartwheel, he said, is similar to a digital-age Tupperware party where “friends invite you for a gathering and in the middle of that experience a switch is flipped and it becomes commerce.”

While the sharing function on Cartwheel can be turned off, McNulty said you need a Ph.D. from MIT to figure it out. Target said some personal care products will automatically be kept private. But McNulty said any category can be touchy. “Maybe I don’t want people to know I eat a lot of snack food or ice cream or that I work for Coca-Cola and I’m buying Pepsi,” he said. “We believe the future is in opt-in permission-based programs and reaching consumers when they’re in a shopping mode and not a social mode.”

“Target and Facebook learned their lesson from Beacon,” said Liz Crawford, vice president of strategy and insights at Match Drive, referring to Facebook’s early commerce attempt where users automatically shared their purchases until concerns over privacy ended the program. “[Cartwheel] is enabling a privacy, opt-out function up front. Beyond this, the exclusivity of the deal among friends is great buzz. I also imagine that very-limited-time offers will begin to prevail as the cachet of being ‘in the know’ becomes increasingly lightning quick.”

“For those guests who are comfortable and enjoy sharing socially, it’s a great thing,” Baeb said of Cartwheel. “On the main page you’ll see your friends’ activity so you’re getting [a read] on the product activity. You’ll also see their social activity. It’s a crowd mentality. What’s cool is how the products are assorted. Within collections or categories, the way the products are shown by most trending items and most popular deals of other users. You see on your individual offer cards little tags on the bottom that tell you which friends have added or redeemed that item.”

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