Are Group Deals & Flash Sales The Next Big Thing In Facebook Commerce?

As more and more brands are opening up shop on their Facebook pages it is becoming increasingly important to find ways to reward customers for purchasing and sharing. As a result, we are seeing an influx of special offers like group deals and flash sales hitting Facebook commerce stores. I had the opportunity to speak with several leaders in F-commerce—SortPrice, Zibaba, and WildFire—to find out more about how these deals work, why they’re great for creating a buzz, and how they play into the future of F-commerce.

As more and more brands are opening up shop on their Facebook pages it is becoming increasingly important to find ways to reward customers for purchasing and sharing.  As a result, we are seeing an influx of special offers like group deals and flash sales hitting Facebook commerce stores.  I had the opportunity to speak with several leaders in F-commerce—SortPrice, Zibaba, and WildFire—to find out more about how these deals work, why they’re great for creating a buzz, and how they play into the future of F-commerce.

Who I talked to…

Before getting into the nitty-gritty of deals on Facebook, I’ll quickly give a little bit of background on the three companies that I spoke with.  The CEO and co-founder of SortPrice, Doron Simovitch, was the first person I heard from.  SortPrice offers a Facebook store application that makes it easy for brands to create stores on their Facebook pages.  SortPrice does not currently give users the option to offer group deals, but they are a forerunner in Facebook Flash Sales.

Michael Katz, the VP of Business Development at Zibaba also provided input.  Zibaba is one of the first online storefront apps to offer users the ability to create group deals and offers.  They also offer a unique affiliate program that lets outsiders promote a brand’s Facebook shop.

Finally, I heard from the CEO of Wildfire, an application that specializes in group deals on Facebook.  Read on to find out what this triad had to say.

How do Facebook flash sales work?

Doron Simovitch of SortPrice explained how flash sales work on Facebook.  Basically, a flash sale is a timed sale that offers a deal for users for a very specific window of time.  When a user sets up a flash sale via SortPrice’s storefront app, “the flash sale goes live immediately on the merchant’s Facebook store, with a product image and description and a countdown clock alerting shoppers how long they have to take advantage of [the deal]… fans can visit the merchant’s Facebook store to take advantage of it, with the transaction being completed on the merchant’s actual website.  Fans also have the ability to like a flash sale, comment on it, and/or share it with other Facebook friends, giving it a genuine shopping feel.”

How do Facebook group deals work?

While Zibaba plans to offer flash sales in the future, they are currently focusing their efforts on group deals and Michael Katz explained to me how Groupon-style deals work on Facebook.  “Group deals are a very easy way of generating buzz around a specific product and increasing sales for that product.  Owners can select any item from their existing catalog of products to easily create a group deal by specifying the amount of discount, the start and end date and time, and the minimum and maximum number of participants.”  Within minutes, they’ve set up a group deal on their Facebook page.  Once the minimum number of participants have signed up, they all get to purchase the product at the discounted rate.

While Zibaba offers group deals as part of their storefront app, Wildfire is focused solely on helping brands create group deals for their pages, not entire F-commerce stores.  Through the Wildfire app, brands are able to crate a group deal page, hosted on their Facebook fan page.  See the example below.

What are the benefits of running special offers on Facebook?

According to Katz of Zibaba, “Merchants are seeing less value for their brand when they run group offers through third party sites.  They end up with no additional brand loyalty, very little sales of regularly priced items from the group buying customers and no direct interaction between their brand and the ‘bargain hunters’.”  When you reward your Facebook fans, you effectively target the people that are already your customers, increasing brand loyalty and encouraging sharing.

Simovitch of SortPrice elaborates.  “Features like Flash Sales are a win-win for both shoppers and retailers.  On the merchant side, a flash sale delivers all the value and fun of a Groupon-style daily deal without the retailers having to share commissions with a third party.  If a merchant has a glut of a particular product that needs to be unloaded quickly, this is a great way to do just that as well, as they can run a new flash sale every day.”

He continues, “Since F-commerce is all about building a community of loyal fans and followers, such sales are a perfect way to provide the incentive and rewards that many Facebook users want out of their social shopping experience.”

A representative from Wildfire focused on the benefits of offering group offers, reiterating the fact that via Facebook “your fans can spread the word for free via shares, invites, and purchases, which trigger newsfeeds.”  Especially in the event of group deals, fans are highly motivated to spread the word because they want to ensure that the minimum number of people sign up so that they can take advantage of the deal.

How do group deals and flash sales play into the future of F-commerce?

Victoria Ransom, CEO of Wildfire, told me, “As consumers spend more time on Facebook and less time on other online sites, Facebook commerce will continue to grow in importance.  Marketers are going to be increasingly tasked with justifying their spending on social media marketing, and coupons and group deal redemptions provide measurable increases in sales.”

Michael Katz believes that “group deals, flash sales and coupons will continue to grow within the F-commerce environment for two reasons.  One is to promote the store and its full offering to new customers and the other is to reward customers who are loyal to the brand.”  He also points out that special Facebook-only deals are becoming recognized as great ways to convert fans that have never made an actual purchase into paying customers.

Doron Simovitch adds that, “Flash sales and similar tools address both the engagement and incentive priorities and will be crucial to F-commerce strategy in the coming years.  Not only do such components provide customers with the content they need to make smart shopping decisions, they’re also essential to creating the two-way relationship between shoppers and merchants on Facebook that is a must.”

What’s your take on group deals, flash sales and other offers on Facebook commerce stores?  How do you see these special offers playing in to the future of F-commerce?  Please share your thoughts with us in the comments below.

Megan O’Neill is the resident web video enthusiast here at Social Times.  Megan covers everything from the latest viral videos to online video news and tips, and has a passion for bizarre, original and revolutionary content and ideas.