How Facebook Enters Bricks-and-Mortar Commerce

by Mercator Advisory Group 0

An intelligent look at how Facebook and its local services competitors Foursquare, Gowalla, Yelp, and Groupon will influence consumer marketing and purchasing behavior. In the long term, the recommendation here is to bet on Facebook owning it all as it has the scale (500 million users), an R&D capability already exploring mobile local check-ins a la Foursquare and, powerfully, a direct sales force already selling advertising to merchants. A Facebook mobile app becomes the channel for coupons and discounts. That’s definitely muscling in on others’ territory.

Facebook: provides the Social Graph, which is fast becoming a utility. Through its open platform, and APIs, we share more about our lives and our interactions online and on mobile every day.

Foursquare and Gowalla: provide location services and check-ins, along with game mechanics that motivate users to unlock badges, earn mayorships, and get discounts at local stores in the process.

Yelp: provides crowdsourced reviews of local businesses. Now also provides check-ins, and offers.

Groupon: provides discounted offers against a promise to increase sales and bring in brand new customers to local businesses.

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