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Merchants Set Up Shop at Facebook

Jul 1, 2007
by Christopher Heine

Facebook Inc., the online social network with 24 million active users, now allows merchandisers to develop applications that its users can add to their personal pages. Various name brands have already jumped into the fray.

Among the first to take a stab has been, which developed a feature called, Book Reviews, that allows a Facebook user to write about a favorite book and display the review on a personal page. Visitors can click on a, "buy," button that takes them to in order to purchase the book., an online retailer of women's fashion and accessories, created a Fashion & Style feature that lets Facebook users point out and comment on their favorite items from among's 250,000 items. The application can notify the user's friends of any changes in those listings.

Moving forward, most of the other applications allow Facebook users to share information or photos, such as one that lets them communicate about favorite travel spots, and another for exchanging photos of pets. Users can add and delete these applications as they choose.

Facebook will not allow advertising in the applications themselves, but says the outside developers can make money by selling advertising on their own sites, and from the transactions themselves (such as Amazon selling a book to a consumer who gets to the site via the Book Reviews feature).

"Until now, social networks have been closed networks," said Mark Zuckerberg, founder and CEO of Facebook, Palo Alto, CA. "We are going to end that."

Service, Value & Merchandise
Price is one reason consumers stay loyal to online merchants, but it is rarely the only factor. Indeed, a survey by DoubleClick Performics and The e-Tailing Group Inc. found that 48 percent of online shoppers surveyed were, "somewhat loyal," to merchants across channels, based on a combination that includes good value, superior store service and the right mix of products.

The survey focused on what factors affect consumer loyalty to merchants across channels, and the extent of participation in loyalty programs. For instance, rewards customers, defined as those belonging to two or more rewards programs, are less apt to be focused on price, instead responding to tools and features that enhance the multichannel shopping experience. The survey also determined that men were less loyal to merchants, while women were more likely to register at a site or be influenced by promotional email, according to Lauren Freedman, president, the e-Tailing Group, Inc., Chicago, IL.

Though price was not the sole driver of loyalty, it was a frequently cited point of interest among survey respondents. In one example, the promotional tactic of totally free or conditional free shipping ranked the highest among survey respondents.

When asked to rate 25 features on a scale of one to 10 in terms of their importance in bringing them back for repeat visits to a website, 92 percent of respondents rated free shipping to be very important or important. All other cost saving features, such as rebates and coupons or exclusive deals for program members, were ranked as very important or important by 75 percent or more of survey respondents.

Customer service features were the second most highly rated set of features, with 88 percent rating online order tracking very important or important, and 84 percent assigning the same ratings to guarantees or privacy policies. Within the content and tools feature set, customer ratings and reviews came in highest, with 74 percent rating this feature very important or important, and 72 percent designating very important or important ratings to product comparison.

For more information, contact:

Facebook, Inc.
471 Emerson Street Palo Alto, CA 94301-1605
Tel.: 650-543-4800
Fax: 650-543-4801

DoubleClick Performics
180 North LaSalle Street, Suite 1100
Chicago, IL 60601
Tel.: 312-739-0222
Fax: 312-739-0223

The e-Tailing Group, Inc.
1444 W. Altgeld Street
Chicago, IL 60614
Tel.: 773-975-7280
Fax: 773-871-3528

Topic: Business Strategies

Related Articles: communication 

Article ID: 252

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