Social media continues to evolve. It is transforming from a technology that it is hard to calculate returns on investment to one that can more clearly drive traffic to brick-and-mortar stores.
In November, Facebook launched Facebook Deals, a location-based service that allows retailers to reward shoppers who check into Facebook Places from participating stores. (Facebook Places is a geo-spatial application similar to FourSquare that lets users share their locations with friends.) Chains that have signed up for the partnership include JCPenney, Macy’s, REI, the Gap, Starbucks and McDonalds, among others.
There are also at least two retail centers that are participating in Facebook Deals—Forest City-owned Short Pump Town Center in Richmond, Va. and the Mall at Robinson in Pittsburgh, Pa.
Facebook Deals works by allowing shoppers to sign into Facebook Places via their smartphones from inside participating stores or shopping centers. The shopper can then get a reward. As such, Facebook Deals taps into several trends currently playing out in the retail space—the widespread use of social media to connect with consumers, retailers’ increased attention to the mobile sales channel and consumers’ preference for value shopping. It also is similar to Shopkick, a tool that’s currently being used by Simon Property Group and several major retailers.
For example, starting Nov. 5, REI promised to donate $1 to a community-based non-profit for every customer who checked into its stores, up to a limit of $100,000. Also on Nov. 5, The Gap ran a promotion giving free pairs of jeans to the first 10,000 people to check into its stores via Facebook Places. (Where it ran out of jeans, Gap awarded 40 percent discounts.) In November, American Eagle Outfitters awarded 20 percent discounts on customers’ entire purchases after they checked in to American Eagle, aerie or 77kids stores. Over the past two weeks, the chain has also offered $10 off any pair of jeans.
Forest City, which partnered with marketing services developer Mallfinder Network LLC to bring Facebook Deals to its properties, over a four-day period in mid-November offered $10 mall gift cards to the first 50 customers to check in at its 1.2-million-square-foot Short Pump Town Center. Forest City used Short Pump as a trial run for Facebook Deals because of its loyal customer base and strong customer Facebook participation .(The center has more than 6,300 Facebook fans.) Subsequently, Forest City began offering another 50 gift cards on December 14 at its 880,000-square-foot Mall at Robinson. The Mall at Robinson has more than 3,100 Facebook fans.
During the promotion at Short Pump, the center’s Facebook page ended up with 85 new fans, says Stephanie Shriver-Engdahl, director of advertising with Forest City. Though it took a while to spread the word about Facebook Deals to the shoppers (Forest City had 50 gift cards available, but only 25 were claimed), the number of check-ins since the promotion ended has increased to about 200, Shriver-Engdahl notes. Forest City considered the program enough of a success to plan a portfolio-wide roll-out by the end of the year.
“I think what makes this extremely interesting is that our centers and our merchants can provide these deals to our customers and it doesn’t cost them anything [extra] to do it,” says Shriver-Engdahl. “Some of the other services, like Groupon, require that the discount be at least 50 percent, and then they take 50 percent, so it’s a huge margin of loss and in some cases it’s worth it. But as Facebook Deals catches on, I think it has the promise of the same viral nature without the overhead to the merchant.”
Going forward, Forest City plans to offer its tenants the opportunity to test Facebook Deals through its centers without having a pre-existing partnership with Facebook. For example, in some cases, instead of offering a mall gift card, Forest City might offer customers checking into its centers a gift card for a specific store.
“We see a lot of interesting movement in location-based service, not just with Facebook Places, but with Google Places and Yelp, and we will be actively encouraging our merchants to begin to claim their places [on these sites] because we think it’s the most efficient way for them to go forward,” Shriver-Engdahl notes. “This knits together the social experience and the shopping experience through the things that consumers are most interested in now, which is deals and special promotions.”
In the future, Forest City also plans to offer more sophisticated promotions to shoppers using Facebook Deals. There will likely be loyalty-based rewards—for example, customers checking into the center for the fifth or 10th time will get $20 gift cards instead of $10 ones. There will also be rewards for bringing friends to the center or a participating store.
Forest City’s investment in setting up Facebook Places for its retail centers has been minimal, according to Shriver-Engdahl—the real cost comes down to the manpower needed to keep the promotions fresh and enticing for shoppers, she says. As of now, Mallfinder Network handles the set-up and management of the Deals for Forest City centers as part of the Social Media Pack services it offers the landlord.