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This holiday season, Sears wants to be your new gift-giving Facebook friend.
Better known for power tools than social networking tools, the retailer is among a handful of big companies, including Starbucks, Burger King and Amazon.com, hoping to get Facebook users to leave more than just a witty comment or virtual gift on their friends’ Facebook walls.
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The system works like this: A customer purchases a gift card or a voucher from the retailer's Facebook page. The retailer then posts a notification on the friend’s Facebook wall, and when the friend clicks on the post, he or she gets a code that is good for the gift item or cash amount.
Sears and Amazon.com allow users to buy gift cards in dollar denominations, but other companies are hoping to get people to buy a specific item for their Facebook friends.
Starbucks lets users refill their friends’ coffee cards. Cold Stone Creamery sells gifts cards specifically for treats such as a milk shake or sundae, and Burger King’s Facebook promotion is for a Whopper.
“It isn’t quite there yet, but I think people are becoming more comfortable with Facebook as this all-encompassing world,” said Kimberly Maul, a writer and analyst in the social media group at eMarketer, a research company.
She said it could take a few years for gift giving via Facebook to catch on with mainstream users, but sees Facebook gifting as a good way for marketers to generate real dollars from the social networking presence that many are building.
“You have a chance to take fans and followers and translate them to in-store and offline sales,” Maul said.
Susan Ehrlich, senior vice president of financial services for Sears Holdings, which also includes Kmart, expects the company's new Facebook gifting tool to be more of a novelty this holiday season, and said it will not replace regular gifts just yet. Still, she is expecting to see more interest at the last minute, once it becomes too late to send a real gift in the mail.
The company also expects Facebook-based gifting to grow more popular in coming years, as social networking becomes a bigger part of people’s lives. Facebook, the 800-pound gorilla of social networking, says it has 500 million active users, and about half of them log on every day.
“What people come to expect of Facebook is going to evolve,” Ehrlich said.
Sarah Owen, vice president of mobile applications and loyalty products for First Data, sees big potential for people who want to send a Facebook friend a small gift that is more personal than a cash gift card.
Having moved a lot for her job, Owen said she has lots of friends who are too far away to physically get together for a cup of coffee or similar small gesture. Although she wouldn't send them a gift card for a small amount of money, she said she would feel comfortable sending a voucher for a small item such as a milk shake.
First Data, the payments processing company that provides Facebook gifting technology for some companies, is hoping the low cost of many gifts will make them popular year-round, rather than just something people do for the holidays.
First Data charges a fee of 50 cents to 75 cents per transaction for companies that use its platform, but Sears and Kmart are currently eating the fee rather than asking customers to pay it. Ehrlich said that’s because they want to encourage early adoption.
“There aren’t fees on our gifts cards in general, so there shouldn’t be a fee on this one,” she said.
Many of the companies that are trying out Facebook gift giving have included a nod to the medium itself.
Burger King even goes so far as to make light of the impersonal implications of gifting via Facebook, encouraging its users to “send a Whopper along with a heartfelt, prewritten e-card.”
The gift itself is sent along with pre-scripted cards that say things like “I’m really glad Facebook identified you as a ‘person I may know’: and “To the friend who’s always liked my status updates, even though I have no idea who you are.”
A tool from eBay encourages people to use their Facebook network so a number of friends can go in on a gift for one person.
Meanwhile, some retailers are turning the tables in the other direction. Stores including Wal-Mart, Best Buy and Target have started selling vouchers at their brick-and-mortar stores that Facebook gamers can use on popular games such as Farmville.
First Data, which expects to have about a dozen companies using its Facebook gifting platform by the end of the year, said it’s too early to publicly disclose how much business it has generated so far.
Ehrlich, of Sears, admits it is very early days in the effort to get people to give gifts via Facebook, and she said Sears is still learning what works best. For example, the company originally thought its lower-value gift cards would be popular but found that people wanted to be able to give gift cards of up to $100. Still, she said Sears is happy to be an early adopter.
“There will be lots of folks following,” she said. “We believe social media will profoundly change retail.”
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