Retail Revolution   /   May 6, 2019

For retailers, Facebook Groups can be data goldmines

Before they can become a part of Hill City’s Wear Tester Facebook Group, members must commit to a four-week program. During that time, the wear testers must wear Hill City products that the brand sends to them, perform two to three activities wearing the clothing, and wash the pieces once a week. It’s a tall order — with upside.

Right now, Hill City — a six-month-old men’s athletic brand launched last fall by Gap, Inc. — has 179 wear-testers in the Facebook Group. It was started a month ago and is led by Luke Linder, the head of design and concept at Hill City, and Andrew Marcia, Hill City’s community manager. The purpose of the program is for the brand to gather direct feedback from people wearing its clothing, which it then incorporates into design and development processes.

The Facebook Group came together after a failed experiment with a chatbot that was meant to gather feedback from social followers. According to Noah Palmer, Hill City’s general manager, the brand “stumbled upon” the idea of bringing together a Facebook Group, where other wear testers could bounce ideas off of each other.

“We struggle, being a digital brand, to build a community. The Facebook Group brings that together organically,” said Palmer. “Within the [Gap] portfolio, our role is to break some of the convention that exists.”

Other retailers and brands are using Facebook Groups to bring together customers for the sake of turning them into coveted communities. The request-to-join nature of Facebook Groups makes them feel more intimate than public pages, helping to fuel more natural conversations. From those, retailers can get direct insight into what their most engaged customers are thinking. Thrive Market, an online grocery retailer selling organic and all-natural products, has a Facebook Group where subscription members can share feedback on new products and swap recipes. Peloton’s official member page, which has 168,000 members, is a forum for Peloton members to connect and also get updates on new Peloton features and announcements.

Facebook Groups are only going to become more integral to retailers’ strategies as they look to incorporate more customer insight into developments around products, subscriptions and loyalty perks. For Facebook, and its push toward “privacy,” Groups are a way for the platform to mine data in more intimate conversations. According to the company, more than 400 million of Facebook’s 2.4 billion users are already involved in a Facebook Group. That will also influence the type of ads that target users — meaning retailers who know they have a vocal community in a Facebook Group could be driven to spend more on the platform in order to properly monetize that audience, and not lose out to competition.

“By driving people to groups versus one-on-one conversations, Facebook is encouraging more of these [intimate] conversations to happen. More conversations equals more data,” said Jon Reily, vp of global commerce strategy at Publicis Sapient. “Here, Facebook wins — they frequently do — retailers win because more data equals more sales, and consumers lose out on privacy.”

The real Facebook Group goldmines for retailers are the unofficial groups, started by brand loyalists under a “buy, trade, sell” format. There are two Facebook Groups dedicated to Rothy’s, for example: “Rothy’s Addicts” and “Rothy’s Buy/Sell/Trade and Chat.” Both are for sharing photos, styling tips and asking questions about the brand; the former is for buying and reselling pairs of Rothy’s or trading pairs for different prints and colors. They have 12,000 and 14,000 members, respectively. That’s exactly the type of on-platform community Facebook is prioritizing, and retailers are going to begin targeting.

“We hear from our members in our Facebook Group loud and clear,” said Jeremiah McElwee, Thrive Market’s head of merchandising. “If they don’t like something, they’ll tell us. And then we have to act on that.”

The state of Amazon’s acquisitions
Last week, CNBC reported that Amazon is rebranding Souq, the Middle Eastern marketplace that it acquired in 2017 to Amazon.ae, in most countries. It’s an inevitable conclusion for Souq, as Amazon has reportedly been telling North American sellers for months to stop selling Souq as it planned to launch its own Middle Eastern marketplace. Here are some other recent developments of note among Amazon’s many acquisitions — in 2018, the company reported that it spent $1.65 billion on acquisitions.

PillPack: Amazon is getting closer to integrating PillPack, the online pharmacy it acquired in 2018 for $753 million, into its own marketplace. PillPack now has a page on Amazon.com. Healthcare reporter Jay Hancock also said that at the end of April, he started receiving PillPack marketing emails through his Amazon Prime membership.

Ring: It appears that Amazon wants to create a content arm for Ring, a home security startup it also acquired for around $839 million in 2018. A number of news outlets reported last week that Amazon has a new job opening for a managing editor to oversee a team of editors that will send crime alerts to Ring owners. The job posting said that the managing editor should be ready to join a “new media news team that is rapidly evolving and growing week by week.”

Whole Foods: Last week, Amazon rolled out Prime Now, its same-day delivery services, to Whole Foods stores in 13 more metropolitan areas. In April, Amazon also said it would double the number of weekly deals at Whole Foods available to Prime members. We’ll get more insight into how Amazon plans to connect Whole Foods with its budding grocery empire whenever it rolls out its long-rumored new grocery store business. — Anna Hensel 

CAC Watch: The physical store
Stores have to do everything for retailers today, include act as marketing channels.

“The rent you would pay for a store is the new CAC,” said Jameson Valone, vp of digital marketing at BrandBox, a multibrand pop-up retailer inside a Macerich mall. BrandBox is targeting brands that have yet to build out a full store network, offering them ready-built and staffed spaces that are equipped with features like POS systems and RetailNext traffic analytics. The company is targeting brands that have exhausted their online marketing channels.

UrbanStems, an online florist, opened a BrandBox store earlier this year after it found that it had saturated 98% of the addressable online market in its home base of Washington, D.C. Before opening the BrandBox store, UrbanStems tested subway campaigns and direct mail, but found it difficult to measure ROI.

“CPAs strictly on out-of-home is hundreds of dollars per customer acquired,” said Ajay Kori, UrbanStems co-founder. “If you’re able to acquire a customer in a physical store, you’re paying to do so, but you’re also making money off of them. I don’t see a world where all successful brands aren’t omnichannel.” — Hilary Milnes

What we’ve covered
DTC decline: Under Armour’s direct-to-consumer business is losing footing despite efforts to grow it.

CBD for pets: Zenpup is using human influencers to promote its CBD products for dogs.

Liberty Mutual talks marketing: The DTC push is influencing even the insurance industry.

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