Ecommerce merchants have begun to approach social commerce with less trepidation than in the past. More are incorporating social sharing options into their websites and many are setting up shopping carts in Facebook. That's true for large brands and mom & pop shops as well.
To date, no company large or small has done what J. C. Penney did Tuesday. The century old retailer moved their entire product catalog to Facebook. Whatever products customers can buy at the company's ecommerce website can now be purchased on its Facebook Page.
What are the implications of this action where ecommerce is concerned? Five come to mind:
Facebook is a given for social commerce - Facebook is quickly moving toward 600 million users, 50 percent of whom logon at least once per day, according to its own statistics. What this means is that the social network has become the operating system of the social web. And, not unlike the Oklahoma land rush of the 1880s, retailers are lining up to to stake a claim in what is proving to be fertile territory.
"The value of Facebook and other social media sites to retailers is greater than previously thought," stated ecommerce consultant John Lawson, reporting on a recent survey conducted by social media marketing company Media Logic. "Out of 100 retailers participating in the study, all of them have seen tremendous growth on their respective Facebook pages," Lawson said.
Social shopping is becoming no big deal - Sure, it's a big deal now. There is ongoing contention over whether people will consider merchandising efforts by brands inside social networks to be an intrusion or will embrace them. Privacy concerns continue to be a hotbed issue as well. But, when a major retailer does something as bold as what J. C. Penney did Tuesday, the question becomes less about "why" and much more about "why not."
Other brands will follow suit - Have you ever attended a gathering of people with whom you were unfamiliar and waited until someone else broke the ice before conversing? "Breaking the ice" over the value of using Facebook as an ecommerce portal is essentially what J. C. Penney has done. By moving the entire product catalog to Facebook, they did it with a sledgehammer too! Precedent has now been set and it stands to reason other brands will follow suit.
Online privacy will become less of a concern - As the "digital natives" of Generation Y gain greater stature in the marketplace, concerns over privacy will take a back seat. Some refer to Gen Y as the "non-privacy generation." The idea of sharing via social media, including making online purchases, comes naturally to them.
A Pew Internet & American Life Project study released in May, Reputation Management and Social Media, said internet users have become less concerned about online privacy. "Just 33 percent of internet users say they worry about how much information is available about them online, down from 40% in December 2006," according to the study.
The shift toward the use of Facebook and other social networks for commerce has been incremental. Only last year the news was all about 1-800-Flowers setting up a store in Facebook. A few months ago, the attention was focused on Delta airlines opening a virtual "ticket window" inside Facebook. Now, it's J.C. Penney and, tomorrow, who knows. What is of greatest significance is that social media, especially Facebook, can no longer be considered an insignificant player in online retail marketing and sales.
Whether merchants choose to move the water cooler closer to the cash register by adding social sharing, Facebook's new registration tool (just announced today), ratings and reviews, or other elements of social media connectivity to their ecommerce sites, or, conversely, move the cash register closer to the water cooler by setting up a Facebook shopping cart (or both), those who are willing to take steps now will enjoy the benefits of first-mover advantage in the future when such activity becomes commonplace. Of course, if J. C. Penney's action is any indication, perhaps it already has.
COMMENTARY: I never would've thought that J.C. Penney's would make this kind of bold, risky and exciting move. This is the last company on my list that would do something like this.
J.C. Penney's average customer is 35-53 years of age. It's no secret that J.C. Penney's wants to tap into the younger and more lucrative 18-34 year old or Millennial market. It's collaboration with Mango, a designer of young women's apparel caught a lot of retail marketer's by surprise. I covered this in a blog post dated August 11, 2010 entitled "Penney's Bold Partnership With Barcelona's Mango To Attract Millennials".
It now appears that Penney's strategy to move its entire product catalog to Facebook is part of its master plan to tap into the 42 million strong Millennial market. Mango has a Facebook presence, but it does not have any ecommerce capability. I did not see any cross promotion to J.C. Penney's Facebook page. I am sure this will be fixed soon.
Facebook offers a great marketplace for Penney's products, especially for the Mango line. According InsideFacebook.com, the 18 to 34 year old's make up 52%, or better than half of its users. Penney's has alway's been popular with parent's. There is going to be an explosion in Millennial birth rates, and these young mother's spend a lot of time online, particularly on Facebook. I think I get it now.
Still this is not going to be an easy transition. It's one thing for Penney's to add apparel that appeals to a younger demographic, its a different matter when it comes to marketing and engaging with a younger demographic like Millennial's and Gen-Y's. What works for older consumer's doesn't work so well with Gen-Y's and Millennials.
The real challenges for Penney's are cultural and generational. For decades Penney's has targeted a much older demographic, and now must modify their marketing thinking and strategy, culture and execution to appeal to a much younger demographic. In doing so, Penney's has to be careful that they do not alienate their older customer's and drive them to Sears.
Only time will tell whether Penney's has successfully bridged the cultural and generational gap, and whether the decision to move their product catalog to Facebook was the right one.
This is going to be exciting.
Courtesy of an article dated December 16, 2010 appearing in Practical eCommerce