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Facebook is testing new features that will impact the way brands communicate with, and sell to, customers. And as mobile devices slowly replace desktop browsers, these changes could ultimately pave the way for Facebook to become the destination of choice for shopping and not just for social networking.
In the coming weeks, the platform will begin testing a “Shopping” bookmark that will appear for a small percentage of U.S. Facebook users. The bookmark, found under the “More” tab, will include a range of products that are based on the pages that a Facebook user has “liked.”
The products on the Shopping bookmark will be culled from the businesses that have begun testing the Shop section on individual pages, starting with apparel and accessories. The difference is that all the products will appear in one place.
The second feature revealed Monday is an expansion of an “immersive” ad format called Canvas that began testing in September. When a Facebook user clicks on a Canvas ad that appears in their News Feed, they are taken to a full-screen experience, still within Facebook, that allows them to browse products and select information (like size and color) before clicking through to a retailer’s Web site to purchase the item. Retailers including Michael Kors and Mr Porter began testing the feature last month, and Target will be one of the merchants to begin testing the new product-focused experience unveiled Monday.
According to Matt Idema, Facebook’s vice president of monetization product marketing, the new features are in response to the very rapid shift toward using mobile devices to browse and shop for items.
“We already see people coming to Facebook to look for and discover products,” Idema said, “and we’re trying to make that experience better and in turn drive more sales to retailers.” He said that a Canvas ad would load faster than a merchant’s mobile Web site and give users the ability to browse before making an additional decision or clicking through to a retailer’s own site.
Although additional advertising revenue is clearly a motivating factor behind creating these immersive ad units, they also help Facebook become a “mobile hub” for consumers, said eMarketer senior analyst Catherine Boyle. “The more services Facebook is successfully able to offer consumers via their mobile app, the bigger the role they’ll play in consumers’ everyday lives,” Boyle said, “which leads to more revenue-generating opportunities for Facebook in the long-term.”
Merchants whose products appear on the Shopping bookmark can decide if they want the purchase to happen directly on Facebook or by clicking through to their individual site. If a merchant already works with Shopify or Bigcommerce, the transaction will be processed by that platform; for merchants who work directly with Facebook to input product details, the on-Facebook transaction will be processed by Stripe. Currently, Facebook is not taking a percentage of the sales price of products sold on its platform.
According to research out this month from Forrester, mobile commerce is expected to grow at a double-digit compound annual rate between 2015 and 2020 to as much as $252 billion. Still, researchers found a disconnect between browsing and buying; while one-third of retailer Web traffic came from phones, only 11 percent of sales came from phones, and much of this is to blame on a frustrating mobile experience.
These new ways of browsing and buying on Facebook offer a better mobile shopping experience by allowing brands to piggy-back on the data and faster load times powered by Facebook. It also allows them to capitalize on the ubiquity of Facebook.
For brands, the choice of developing their own mobile Web site, app or both can be daunting, time-consuming and expensive, Boyle said. “Creating a presence on Facebook provides a framework for brands to work within, a large and loyal audience to tap into and a way to test whether they need to invest further in mobile proprieties of their own.”
These products also help Facebook tread deeper into e-commerce territory. Competitors such as Amazon, Google, Pinterest and Twitter, in addition to Instagram (which Facebook owns), have also recently added buttons that allow for one-click buying.
According to eMarketer analyst Krista Garcia, social media isn’t where most consumers turn first when shopping (friends and family and online reviews are more popular) but Facebook is the leading platform when adding social to the mix. “Turning shoppers into buyers is what all of the social networks are trying to master right now,” Garcia said, “and it’s to be seen if this will be a measurable success.”
It’s estimated that 85 percent of time spent on mobile devices is spent on apps, with the majority of time spent on only five apps — including Facebook. And by helping match merchants with customers, Facebook is hoping to increase that.
Idema contended that Facebook’s carousel ad format, which lets advertisers show multiple products in one ad, offers advertisers more bang for their buck by converting more impressions into actual purchases. Facebook advertisers pay by impression, and according to early testing, carousel ads resulted in a 30 percent to 50 percent lower cost-per-conversion. (Instagram also recently began testing carousel ads.)
There is more of an emphasis on performance ad spending, said Fluent chief marketing officer Jordan Cohen. “We see an ongoing shift away from CPM-based pricing models to performance ones like cost-per-lead, cost-per-action and even cost-per-sale.”
According to research shared by Facebook, Neiman Marcus saw three times more conversions and 85 percent better click-through rates from carousel ads.
Target chief strategy and innovation officer Casey Carl has called mobile devices their “new front door.” According to research shared by Google, 98 percent of Target customers shop digitally, and three-fourths of them start on a mobile device. Target will be one of the first merchants to test the product-focused features in the Canvas ads.
Target senior director of social media Colleen McDuffe confirmed that the retailer’s customers look to Facebook for purchase inspiration — especially on mobile devices. “Facebook’s new shopping bookmark allows us to meet that need, providing a seamless bridge between inspiration and purchase,” she said.
Monday’s news came just days after Facebook unveiled plans to test Reactions, which are ways to respond to posts beyond “likes.” Reactions will begin testing in Ireland and Spain, and users will be able to react to posts from friends, advertisers, publishers or businesses with images that communicate “love,” “haha,” “yay,” “wow,” “sad” or “angry.” Just as when a user “likes” a post, using a Reaction will infer that the user wants to see more of that type of post.
The feedback from Reactions could mean that customers react to an ad campaign or a product beyond the “Like,” ultimately informing product decisions or helping merchants tweak ad campaigns.
Social media has already provided an accessible forum for expressing dissatisfaction with a brand. Consider Victoria’s Secret’s November 2014 campaign for its Body by Victoria line. After customers spoke out against the slogan “A Perfect ‘Body’” on social media, Victoria’s Secret changed the wording to say “A Body for Every Body.”
Facebook Page owners will be able to see these Reactions on Page insights, and Reactions will have the same impact on ad delivery as “Likes” currently do.
Still, how merchants will be able to interpret that feedback remains to be seen. “It opens up a whole Pandora’s box of emotional challenge,” said Chris Paradysz, chief executive officer of PM Digital, a digital marketing agency. “There are eight different ways to say ‘wow.’ Whereas before it was ‘like’ or nothing, this will make it less clear. When it comes to using data and information,
Forrester analyst Erna Alfred Liousas said that widespread adoption could come slowly due to consumer confusion interpreting the different button options relative to content. Still, she said, “Facebook could get a better picture of how much impact that data drives when they start using some of it to tailor a reader’s news feed.”
Amy Errett, ceo of at-home hair color service Madison Reed, said that Facebook has provided an avenue for reaching new customers, and that she would “absolutely” consider selling the firm’s products on the platform outside of ads. As for the new reactions, she “likes” it. “We have a highly engaged audience on Facebook,” Errett said. “We think this opens it up to get even more people involved and allows us to provide even richer engagement and feedback.”
Facebook will begin testing all of these new features with only a small number of users initially, but as they expand, buying a birthday present might be just as simple as posting birthday greetings on a friend’s wall — and it could happen without leaving Facebook.
Thus far, experts seem to agree that the challenge in making mobile shoppers out of mobile browsers has been converting social behavior into buying behavior. “They are going about it the right way by making that connection easy,” Paradysz said. “Social behavior has evolved so much that people don’t separate the destinations. Mobile has changed all that.”
“Facebook is highly regarded for its targeting capabilities and it has certainly proven that it can help consumers discover apps that might interest them,” Boyle said. “If they can do the same for retailers — help consumers discover new products without diminishing the user experience — and make buying easier in the process, there is a good chance consumers will increasingly turn to Facebook to make purchase decisions.”