Facebook Places Deals: social commerce goes mainstream
Published 03/02/2011 | 11:36
Facebook is expanding the frontiers of social commerce into restaurants and shops with a new app for mobile phones.
Earlier this week Facebook launched ‘Places Deals’, a new service for the UK and parts of Europe which allows users to check into shops and restaurant using their mobile phone to get discounts.
The service, which launched with the likes of Starbucks, Yo! Sushi and Mazda on board, also allows people to see what deals are happening around them and where their friends are getting a good bargain.
In some instances there are also some rewards to bringing friends along to different shops and restaurants.
According to analysts, the move was a “no brainer” for Facebook, which is trying to build a social web within the web. Initial deals include: the first 30,000 Facebook users who check in at participating Starbucks stores across the UK, will be able to claim a free filter coffee.
Debenhams is set to give away 1,000 Benefit mascaras and free makeovers to those who check in at its stores on Valentines Day and Mazda is going to give away five cars, every month for five months, and a 20pc discount to anyone who checks in a Mazda showroom on certain models.
However, Places Deals’s arrival in Europe is the latest development in a bigger trend, known as social commerce.
Increasing number of services and tools are popping up which aim to help people use the web to find out what their friends are buying in real time and their whereabouts.
Foursquare, a location-based social network, which works in a similar way to Facebook Places, is another example of service hoping to drive social commerce.
The idea is that users will get rewarded for checking into places repeatedly, in a comparable way to supermarket loyalty card schemes – but without the paper work or need for scanning.
Group buying sites, such as Groupon, LivingSocial and Keynoir, also come under the broad ‘social commerce’ banner, and offer their email subscribers a ‘daily deal’.
The slightly confusing terms ‘group buying’ came about through a former business model for these sites – which used to require a certain number of people to agree to purchase a deal before the deal became available to all.
However, sites such as LivingSocial, which has gained lots of attention through hugely popular deals such as 50pc off a $20 Amazon voucher – which resulted in more than one million such vouchers being sold – are now offering daily deals and often taking the financial hit themselves – in a bid to get as many new subscribers as possible.
There are also other sites which take social commerce to the next level. Blippy, a social network which allows people to share information their credit card purchases, with friends or strangers, allows users to locate each other via their credit card transactions.
The idea is that if a user is having a coffee somewhere, then all their friends would know where they were via a signal sent from the card they used to make the drink purchase.
The concept of using your friends to find the best deals or experiences is not new one – it’s just never been technologically enabled in such a mobile way before.
Ian Maude, head of internet at Enders Analysis, thinks it’s difficult to know the full impact of this new type of social commerce just yet, but believes it will be significant.
“I think the power of social commerce will be significant and the effect on retail will be in the hundreds of millions of pounds. It is definitely not a gimmick and has the power to transform business at a local level.
"Although I don’t think new services, such as Facebook Places Deals will fundamentally change people’s buying patterns but it will definitely alter them to some degree.”
Philip Wilkinson, co-founder of Keynoir, a UK group buying site, added: “Voucher code sites offering deals have been around on the internet for a long time. But what’s different now is there is the ability to add location into the mix, making the offerings more valuable.
"And now, more and more sites are offering just one great quality deal a day, which helps people focus on the offer, buy it and not become a victim of information overload.”