Facebook Collections, a feature for Facebook Pages currently released in closed beta, allow retailers to post product images with specific share buttons such as “Want”, “Like” and “Collect”. Clicking these buttons shares a story to your friend’s News Feeds about your affection for the product, and saves the product in a dedicated panel on your personal Timeline. You (or a friend) can then click on a product in the panel to be directed to the product purchase page for that product on the retailer’s website.
Facebook has teamed up with just seven retail partners for the beta launch of Collections. They include Pottery Barn, Neiman Marcus, Victoria’s Secret, and Fab.com.
Why does this matter for retailers?
Collections do two major things to help retailers:
1. They create customer referrals. Every time a user clicks “Want” on a product they share a story to their friends’ News Feeds. This story basically states that the user thinks this product is cool. Whereas before a recommendation like this would only go from one user to another through a medium such as text message, now that recommendation is being sent to that users hundreds of Facebook friends. This allows for exponential growth in word-of-mouth marketing for specific products.
2. They captures purchase intent information, let me explain. When a shoppers clicks that they “Want” a product they are showing explicit intent that they are interested in it and may purchase it in the future. This is highly valuable information for retailers as they could use this information to send targeted marketing campaigns to people interested in specific products (see Building the Social Shopping Graph below for details).
4 ways Retailers will be able to utilize this to get more sales
1. Create Collections to give customers ideas of how to use your products
Creating a collection of products allows you to create a context around how they can be used with each other. This gives shoppers ideas on how they can use the products themselves, which in turn gives them a reason to buy. Furniture retailers could add together bedroom products to create a Collection showcasing the ultimate Girl Bedroom. Fashion retailers could create Collections of entire outfits to give shoppers ideas for new looks. And toy retailers can create Collections of toys for children of different ages and interests.
2. Run a “Want it” to Win Contest
Retailers could use the Facebook Collections feature to run a very simple contest to generate a mass amount of sharing about their products and a wealth of purchase intent information. Retailers could ask fans to click “Want” on the product they want the most to be entered into a draw to win a prize. Each entry into the draw would create a customer referral for the companies products, and show the retailer which of their products are most popular with their fans.
3. Purchase Intent Information
As discussed above (and below in Building The Social Shopping Graph) user interaction with Collection product images will give retailers insight into what customers are interested in buying. This knowledge will allow them to target customers with specific marketing messaging and special deals based on what they are thinking of buying.
How it Works
Say you Like Pottery Barn’s Facebook Page, one of the beta partners. When Potter Barn posts images on Facebook, they show up in your News Feed. But product images that are posted using the Collections feature won’t just be a static picture — it will ask you if you want to “collect,” “want” or “like” it. (Facebook is testing all three verbs). There’s also a place to comment.
Clicking each verb button on the product image will have a different result. Anything you “collect” or “like” goes into a panel on your Timeline called “Products.” If you click “want,” the item will go to a panel entitled “Wishlist”. Most importantly, when you click on a product in the Products (or Wishlist) panel you’re taken directly to the product purchase page on the retailer’s website.
Facebook is showing each verb version to a third of users, and will be watching to see which generates the most traction and satisfaction. Note that this is all different from the “Want” button social plugin for external sites that Facebook is rumored to be working on.
Building The Social Shopping Graph
Facebook is not yet releasing an analytics dashboard for this, but it’s definitely on the path towards building the social shopping graph. This data set would enable retailers to target users based not only on Age, Location, etc., but also on products that users have said they “Want”. For example, a retailer who sells Nike running shoes could target only users who have clicked “Want” on a pair of Nike running shoes. Or even more enticing for retailers, they could target users who have clicked “Want” on their competitors products.
How Collections Make Facebook Revenue
Facebook is currently not charging for it, but it will inevitably lead to retailers buying more ads. As they’re drawn in with these new tools they’ll obviously want to amplify the reach that each of these collection posts get.
This is especially true as Facebook limits brands’ ability to promote their Collections to users who Like their Page only. This means brands will still need to spend to get Likes in order to utilize Collections. Facebook sells ads specifically designed to get brands more Likes for their Pages, and those ads will become a lot more valuable to retailers because of Collections.
How does this affect the Online Shopping Space?
While many analysts are calling this a challenge to Pinterest, it’s more of a direct competition to social shopping sites like Wanelo, Lockerz and Svpply. While Pinterest is a full photo (and rich media)-sharing site with plenty of content devoid of consumer products, these social shopping sites only show products. If Collections catches on as the go-to application for social shopping – i.e. sharing the product you “Want” with your friends and discovering what trend-setters “Want”, these Social Shopping sites are in big trouble. Fab.com, eBay & Etsy type sites are clear for now as they enable ecommerce transactions, which Facebook Collections does not.