Will Facebook’s new location-based Deals service provide bricks and mortar retailers with the footfall they crave? JOHN KENNEDY looks at how m-commerce could help retailers.
In certain cities in North America, stores and restaurants can’t keep up and almost have to shut their doors on potentially paying customers. Why? Well, thanks to thrift-based sites like Groupon and LivingSocial, consumers who have less cash but still enjoy the finer things in life are being made aware of discounts and offers.
This revolution has been inexorably spreading to Ireland through services like CityDeals or group shopping services like Gruupy.com.
Last week, Facebook took the wraps off a new shopping feature called Deals that could provide a boost to hard-pressed Irish retailers who need footfall in these tough economic times.
How Facebook Deals works
Facebook users with smartphones who check in – ie, indicate their location on their phone – via Facebook Places will see a list of places and those that have a little yellow ticket icon beside them will have discounts.
For instance, users can check in and get 50pc off hot drinks or get a free pizza at Milano. Champion Sports will give away professional footballs to the first 500 people to check in at its stores, while the first 500 people to check in at the Guinness Storehouse will be offered a free personalised bottle of Guinness Extra Stout.
As well as boosting footfall for bricks and mortar retailers, each time a user checks in and obtains an offer the news gets broadcast on their social stream so their friends will be made aware of the deal – thus a brand’s image is enhanced.
Following the trial, the intention is to open it up eventually to a self-service model for retailers to log onto Facebook and set up their own offerings.
Right now, the self-service model is available in North America, but Emily White, head of local at Facebook, says the plan is to tweak it before making the offering available globally.
“The world on the web was traditionally thought of as the wisdom of crowds. That is changing dramatically with the onset of social media; it’s now the wisdom of friends. Shoppers’ on-street choices are being informed by friends and family via social media and not by anonymous people on the internet.
“You used to have to vocally communicate what you are doing. Now, in one tap, I can share where I am, what I am doing and who I am with, with the people I care about, as I am making decisions that are informed by people and what they are doing with their time.
“This creates not only a social web but also enriches it with local and businesses information. It’s effectively a shift from a social place to where businesses are part of the conversation and this will drive Deals,” White says.
Rick Kelley, head of midmarket sales, EMEA, Facebook, says that out of Facebook’s 500m users worldwide, some 250m access the social network on their mobile devices.
He says Facebook is working with key brands in the interim to trial the service with Irish consumers. There will be four different types of deals available for businesses that wish to offer discounts to users: charity deals; individual deals; loyalty deals; and friend deals available to users who tag five friends.
Kelley says the kind of brand engagement businesses are getting out of using Facebook is beginning to trump that of a traditional web presence. For example, Starbucks has 20m fans on its Facebook page compared with 1.8m visitors to its website. Coca-Cola has 23m Facebook fans versus the 270,000 visitors to its website.
What is Yelp for Business Owners?
Facebook isn’t the only player in the Irish market tying location to deals on the street. Business directory service Yelp for Business Owners allows businesses to better manage their message to consumers and places offers and updates around their pages. Every time a customer checks in on their mobile phone while in a business premises, it unlocks a special offer. All the user has to do is show the business owner the special certificate on their phone.
Bryan Byrne, an Irishman who is director of business and revenue at Yelp’s Silicon Valley headquarters, explains: "If a user frequented a store or restaurant more than three times in a month they could be entitled to a free offer or discount.
"Location is very exciting and we’re giving ordinary businesses the opportunity to marry location applications with good business sense.
"Using Yelp, firms can post different types of offers, update their hours of business and message customers. Using location services, a restaurant could offer regular customers 10pc off their bill every time they check in."
Niall Harbison of social media consultancy Simply Zesty believes Facebook’s Deals service could take off in a big way in Ireland.
"Deals has taken off massively in the US and if retailers see this as a way to drive customers into their shops then they can’t ignore it. Rival location platforms like Foursquare pioneered the genre but Facebook seems to be taking it further and has the audience to make it work."
One development Harbison envisages coming from the Facebook stable is the onset of a group deals service that could rival Groupon and could be available in the Irish market in the year ahead. Effectively, if enough people group together to buy a certain quantity of, say, the latest Converse trainers, they could get them for €20 cheaper.
TapMap garners notice
An Irish company that is already making waves in the m-commerce world in the US is Galway company TapMap, which was last week named as one of three winners in the 2011 International Expo out of 34 start-ups from 16 countries worldwide. The iExpo is run from the heart of Silicon Valley in California by the Plug and Play Tech Centre, one of Silicon Valley’s leading incubators for new start-up technology companies.
TapMap enables retailers to publish all of their in shop products on mobile devices. The company works with retailers like Evergreen Health Foods, O’Briens Wines, Unicare Pharmacy and GameStop. The Irish company’s partners include Wal-Mart, Microsoft and Oracle.
CEO Philip McNamara says TapMap builds a database of products that consumers can access on a mobile phone. TapMap helps physical retailers sell more products by publishing the retailers’ real-time in-stock inventory on a variety of web-enabled devices. This lets consumers know if a product they want is in stock at the moment when they’re shopping for it.
Using the barcode information, ShopSavvy searches the web and local shops for the product, and displays the stores where a customer can find that product in nearby shops. ShopSavvy looks up product reviews to further assist with purchase decisions.
“TapMap makes money from retailers, marketing agencies, and ad agencies. It charges them a fee to access analytics on live product demand. The market potential is big, since TapMap reduces the need for advertising. Retailers spend $60bn on advertising in the US alone,” McNamara adds.
For the past two years, Silicon Republic has run a campaign to highlight the imperative of creating the digital infrastructure and services upon which the success of our economy depends.
The website for Digital 21 provides a forum for all those interested in accelerating the development of Ireland’s Digital Economy.