Three Predictions for the Facebook ‘Buy’ Button
So the news is out that Facebook is testing a new “buy” button designed to help businesses drive sales in News Feed and on Pages. This feature will let consumers click the “Buy” button on ads and page posts to purchase a product directly from a business, without leaving Facebook.
While some retailers and brands are now conducting actual e-commerce from their Facebook pages, the “buy” button holds the potential to substantially increase Facebook’s potential as a platform for executing omnichannel transactions. Here are a few predictions on what will happen to Facebook’s standing as a retail application as the buy button gradually shifts from pilot to full rollout.
Facebook Will Drive Store Traffic
Smart retailers will offer, and even encourage, buy online-pick-up-in-store functionality through the buy button. Many consumers prefer the immediacy of picking up an item in a nearby store to waiting for a delivery, and retailers benefit from the resulting increase in store traffic and secondary purchases.
In addition, in-store pickup can allow retailers in the fast-food and grocery verticals to effectively utilize the buy button. Of course the buy button will also drive a lot of online purchases for home delivery, but ultimately it should increase Facebook’s importance to retailers’ store strategies, which is good for Facebook.
Security and Privacy Will Need Addressing
Facebook says it designed the buy button with “privacy in mind” and that payment information won’t be shared with advertisers. Facebook will also let consumers decide if they want to save payment information for future purchases.
This is all well and good, but security and privacy will be a major issue for Facebook to address, especially with lingering controversy over the recent admission that the company tested how newsfeed content affected user moods. While consumers are waking up to the fact that any online activity produces a wealth of individual data that companies can and do use for marketing and research purposes, the highly personalized nature of Facebook makes users especially sensitive to privacy.
There is no immediate means for Facebook to calm consumer fears about the safety of their personal and financial information when using the buy button. But by employing advanced technology to protect consumer data and authenticate user identity, Facebook can in time gain broad consumer trust.
The Kids Won’t Come Back
Anecdotal evidence as well as actual research backs up the notion that Facebook is by and large your father’s social network. Millennials, especially those of high school and college age, are increasingly turning to more visually oriented social networks like Instagram (owned by Facebook) and Snapchat.
Although clicking a button to buy an item directly from an ad is the kind of cool and convenient tech feature that would typically resonate with Millennials, it won’t be enough to bring them back to Facebook. This also means that youth-oriented retailers will be less likely to get seriously involved with the buy button.
The logical next step in the general evolution of social media as a commercial platform is the enablement of purchasing items directly from photos on visual networks such as Instagram and Snapchat. Given its parent company’s related experience in directly enabling social purchases at the click of a button, look for Instagram to be a leader in this area.
Children’s Place board member passes away
The Children’s Place has announced that Lou Lipschitz, a member of its board of directors and chair of the audit committee, has died.
"We are deeply saddened by the passing of our friend, colleague and trusted advisor Lou Lipschitz. Lou’s financial leadership, and passion for our business, enriched our company and our board, and we will dearly miss his dedication, grace and wonderful sense of humor," Norman Matthews, The Children’s Place chairman of the board, said.
Lipschitz served on the board of directors since 2008, and was the chair of the audit committee and a member of the nominating and corporate governance committee. Prior to joining the Children’s Place board, Lipschitz served as the EVP and cfo of Toys "R" Us from 1996 until his retirement in 2004.
Retail groups ask for tokenization in payment security
Washington, D.C. – The National Retail Federation (NRF), Retail Industry Leaders Association (RILA), Food Marketing Institute (FMI), Merchant Advisory Group, National Association of Convenience Stores (NACS), National Grocers Association, and National Restaurant Association (NRA) are jointly calling for an open and universal tokenization standard in the U.S. payments system. The groups released a statement saying payment card data is currently vulnerable to theft where card information is swiped or entered, where card information is stored, and where it is transmitted.
The group is calling for payment industry stakeholders to adopt tokenization. Tokenization refers to the process of replacing sensitive account data and identity information with a unique token or symbol, making it less vulnerable to a security compromise. Tokens are randomly generated in a secure environment, like a coin vault, so that no data is stored or transmitted in an unsecure format.
“In order for the full benefits of tokenization technology to be realized by U.S. consumers and businesses, the standards for this technology must be created on an open platform that enables all technology providers to compete equally,” says the statement. “An open, interoperable platform will also ensure merchants can support the technology across multiple providers and make back-end security processes seamless for the customer experience.”
The statement also says tokenization will assist retailers in age verification identity checks, and storage and transmission of electronic health records and pharmacy prescriptions. Payment stakeholders are encouraged to participate in an accredited standards process, such as, but not limited to, the International Standards Organization (ISO) or American National Standards Institute (ANSI X.9), to create, maintain, and coalesce around an open solution approach to payments security.
The statement concludes that solutions for tokenization should align with the following guiding principles:
1. Subscribe to an open standards approach through an accredited standards-setting body.
2. Create a technology neutral platform allowing broad participation in the standard from technology stakeholders.
3. Allow participants to develop proprietary frameworks that operate in adherence to the standard.
4. Ensure the standard works for multiple payment environments, including e-commerce and m-commerce.
5. Require that intellectual property, such as coin vaults and common technology applications, be governed by the industry standards.
6. Require the standard be supported by all networks, brands and payments types (credit, debit, prepaid, ACH, etc.).