Written by Ellie Robinson
Facebook Deals was launched in Europe on 31 January to compete with other social commerce sites such as LivingSocial and Groupon. It is promoted as a way of building up customer loyalty and attracting a new client base. The site’s Facebook Places application – which shares the location of the user with their online “friends” – acts as a gateway to deals and special offers. All the Facebook user has to do is ‘check in’ to a certain location using their smartphone or tablet, and they will instantly be eligible for money of a purchase or maybe even a freebie from participating retailers.
Odeon became the first cinema group in the UK to use the social medium as a marketing tool. Visitors who checked into their cinema via Facebook Places, found an offer – a free, small popcorn, available to movie-goers. The offer was limited to the first 1,000 boxes, with 50 boxes allocated per cinema. However, Luke Vetere, sales and marketing director of Odeon says: ‘We’re hugely excited about using social media to engage with film fans and proud to be the first cinema chain to utilise the Facebook Deals platform to reward guests for coming to Odeon.”
Alton Towers used a similar method but upped the ante
this February. Its Facebook deal offered free entry to the
Staffordshire theme park, not just for the customer who checked in via the social networking site, but also three of their friends. The first 100 users received a free one-night stay at one of Alton Tower’s hotels.
Liz West, PR manger at Alton Towers, says: “Facebook is a fantastic brand and a great way for the resort to reach a key audience. Deals is an innovative product development and we are hopeful it will become a important marketing tool for us.
“On the day we launched Facebook Deals (on 18 February 2011) we provided free entry to anyone that checked in. The response was amazing and we had around one per cent of our Facebook fans at the time turn up. Facebook Deals is a great tool for engaging with our fans and being able to reward them for their visits to the Alton Towers Resort. The response we had to the ‘free entry’ day was fantastic and the feedback from the guests that visited was extremely positive.”
Alton Towers already have a highly engaged audience on their page, with over half a million fans who regularly post about developments at the park, and respond en masse to status updates. The theme park saw one of the key benefits of Deals in the volume of social stories which would be generated by customers as users checked into the park when they launched the deal on 18 February this year.
If only one per cent of Alton Towers’ fanbase had visited the park that day, it would still have triggered check-in stories from at least 27,500 users, of which a percentage, it was anticipated, would convert to fans.
The location based deals market isn’t new, with FourSquare and Gowalla having operated in this market for over a year however they have a fairly small niche audience between them. Meanwhile Facebook enters the game with an existing base of 12 million monthly mobile users. Not all handsets are as yet compatible with Facebook Places as yet, but undoubtedly the feature will be rolled out rapidly over the next few months. Certainly it is already available on iPhones, Android smartphones and Blackberrys.
The Interactive Media in Retail Group (IMRG), the industry
body for global online retail, recently published research,
conducted in conjunction with eDigitalResearch, tracking changes in consumer behaviour when shopping or browsing retailer sites online. The results from the eCustomerServiceIndex (eCSI) revealed that 15 per cent of the 2,000 consumers surveyed had been influenced to make a purchase on a social media site. It also showed that just four per cent of customers had bought goods from retailers directly from Facebook stores.
Andy Mulcahy, communications executive at IMRG, said
that, while four per cent is quite a low percentage, it is still early days for these types of deals. He drew comparisons with the emergence of e-commerce. This first became possible in the
mid 1990s, but took five years to take off.
IMRG’s Mulcahy adds: “The really interesting figure to come out of the eCSI report is that 15 per cent of consumers have been influenced to buy through social media. ‘Influence’ is really the key word here; retailers should not look at their social media presence solely as a sales channel, but more a valuable resource for engagement and opening up communication with consumers. One in 11 people are on Facebook, so the potential is vast and someone will inevitably come to own the social commerce
space when (or indeed if) it really takes off. On Christmas Day 2010, Facebook had more traffic than Google - the first time this has happened.
“When it comes to engaging consumers, social media offers unparalleled opportunities for gathering feedback, offering loyalty rewards and feeding key updates quickly. This, for the time-being at least, is social media’s true value to a retailer.”
David Smith, managing director at IMRG, however, believes the jury is still out on the future sales potential of these sites. He pointed to a new research conducted by Havas Media Social and Lightspeed Research that suggests, despite the retail industry hailing social commerce as the next big thing, 89 per cent of people have not bought anything through Facebook and 44 per cent are not interested in doing so.
However the majority of consumers (70 per cent) feel that targeted advertising based on interests or shopping behaviour, similar to Amazon’s recommendation model, would make them more likely to buy products on social networks.
IMRG’s Smith says: “I think the engagement over the next couple of years will be more to do with reputational management/brand building and customer engagement rather than pure sales.”
Richard Cottrell, sales and marketing director at Vista Retail Support, which provides maintenance services for electronic point of sale technology to Londis, SA Brains and Spar retailers, echoed this view. He argues that the challenge for those working in hospitality and leisure will be to reach out to customers
without giving them the hard sell.
“Hospitality companies mustn’t fall over themselves in the rush to reach customers via social channels,” he explains. “They
need to reach people wherever they are and that increasingly means online. More importantly, they need to reach them where they play and Facebook absolutely ticks that box. Moreover, Facebook, because it is a social channel, is where more and more consumers communicate to decide where they are going to go to get together; again, Facebook is the critical channel for hospitality.
Restaurants and cafes have also become wise to the Facebook Deals trend, with major chains like Starbucks and Yo! Sushi signing up as two of the first major partners in the UK. When the deals announcement was made in january, Emily White, Facebook’s
director of local, said that the service would eventually be
offered at local smaller shops and restaurants.
“We all love a bargain so whether you’re on the lookout for a special offer at your favourite restaurant or tips from a fashionista friend about a discount on shoes in a department store,
Facebook Deals will help you find it,” says a Facebook’s blog. “You’ll see a few different types of Deals: individual deals for a discount, free merchandise or other reward; friend deals where you and your friends claim an offer together; loyalty deals for being a frequent visitor to a place; and charity deals where businesses pledge to donate to a cause when you check in.”
The social networking site currently makes no money from these partnerships with retailers, but did not rule out cashing in on people’s purchases initiated via check ins in the future.
It does seem that the benefits for the hospitality and leisure services to use Facebook Deals is far from clear at this early stage in its development .
But the success of retailers in other sectors - ASOS, HMV and French Connection have all launched Facebook stores in recent months, with ASOS being probably the most successful - indicates that these deals could create new marketing opportunities, if not a solid sales platform quite yet.