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Facebook exec names 3 trends driving retail personalization

Online shopping is increasingly being driven by an "I'll know it when I see it" phenomenon.

January 14, 2014

NEW YORK — During a Sunday afternoon panel discussion on personalization in retail marketing, Facebook's head of retail and e-commerce, Nicolas Franchet, shared some insights the social media company has learned on how personalization is changing online retail behaviors.

"Personalization is at the center of everything we do at Facebook," he said. "There are no two news feeds that are alike. If you think about it, what we′re building is a personalized newspaper."

Franchet said that digital retail and advertising has previously been all about search, and about products — a customer knows what they want, so they take to search to find the best place to buy it.

Increasingly, though, he said it is about discovery — where consumers are introduced to products they "didn′t know they wanted." He pointed to the online deal retailer nomorerack as an example of a retailer that is using the phenomenon of product discovery, particularly as integrated into social feeds, to good effect.

Discovery was one of three big trends that he said his company is seeing with regard to digital retail. The other two are:

Seasonality: Franchet noted that seasonality is something as old as retail itself, but digital is drastically changing it by creating ever-smaller segments, and being able to talk to smaller groups of people. It's far more complex now than the four seasons, or the big segments like back-to-school and Christmas. As an example, he discussed the day in October when the FAA announced it was going to start allowing electronic devices during the entirety of a flight. Amazon marketed its Kindle on that day, noting "it's time to buy a Kindle."

Compression: As more and more activity moves from the desktop browser to the mobile browser, retailers are seeing a "massive compression effect" as the smaller screens mean that fewer products can effectively be marketed. "On mobile, you can only show me a few things, and then I move on," he said. "So how are you going to get those few things right? By using higher personalization levels than we′ve ever seen."

He also said that the move from a mobile browser to an in-the-stream social ad compresses things even further — now, instead of being able to effectively offer four or five items, the ad needs to contain just one, making it even more important for the retailer to know which item to serve up.

Read more about social media in retail.