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Fighting eBay, JCPenny Risks Its Brand on a Facebook Store

Editor's Note: to see our infographic slideshow on Retail Shopping in 2015, click here.
Last week, Texas retailer JCPenny (JCP) announced they would be the first retailer to launch a version of their online store hosted on Facebook. Shoppers can now complete an entire order -- from shopping to fulfillment -- on Facebook. But for JCP, that means sacrifice: a Facebook store-front means that JCPenny loses their branding, promotions and banners to Facebook's standard blue-and-white facade. Is this what it will take to beat eBay and Google, who are muscling in on brick-and-mortar stores?
Does Online Branding Matter for Retailers?
"A couple of years ago, the 'branding' question would have been a more tense discussion," says Nick Bomersbach, JCPenny's vice president overseeing our customer experience for our digital marketing. "But we realized that this is where our customers are, and we have to open ourselves up to it if we want to understand them more" -- even if JCPenny's Facebook Store ends up looking like every other Facebook page on the block.

Behind the scenes, will still benefit from the Facebook shopping page, since ratings and reviews that users compose on Facebook get pushed out of Facebook and into JCPenny's homepage. But while the backends of the two stores is the same, the front-end is quite a different animal. On Facebook, JCPenny has radically simplified their merchandising to try to get people to focus on sharing and buying. "We're not exposing the same content on Facebook," says Bomersbach. "We're not doing the callouts, the promotions, the trends -- that stuff doesn't get pushed through [from the main site]."

In other words, the Facebook shopping experience is stripped-down. The effect is much a more placid and more personal store than, although Bomersbach says "that wasn't the clear intention." (You can visit the store by clicking here; Facebook login required.) Instead, he says, they focussed on simplicity: "We wanted to make it very easy to buy or share."

Facebook = Mobile
If that "simplicity first" strategy sounds familiar, it's because it's the same one that most brick-and-mortar retailers are adopting for their mobile apps. In fact enough, JCPenny is using the same development company that did its mobile site, Usablenet, to develop the Facebook shopping experience. Usablenet is one of the biggest purveyor of mobile retail sites on the Web, having developed in-store mobile apps for clients like Amtrak, Macy's (M), Crate & Barrel, Aetna (AET), Brookstone, JetBlue (JBLU),CVS (CVS), Staples (SPLS), American Airlines (AA), Marriott Hotels (MAR), Sears (SHLD) and American Eagle (AEO).

As Facebook's mobile developer emeritus Joe Hewitt told me earlier this year, the concensus at Facebook HQ (and indeed, in the Valley at large) is that mobile Web traffic will surpass desktop traffic in about three years. Facebook will get a huge portion of that mobile Web traffic, just as it does with desktop traffic -- more than 150 million people are already using Facebook on their mobile devices. In essence, JCPenny's Facebook Store is just another vote of confidence in the prevalence in the mobile Web.

Does Mobile Actually Matter to Brick-and-Mortar?
The mobile Web is vital to retailers because it will help stave off the danger posed by apps like eBay, which is developing predictive technology to target consumers with killer deals while they're standing in the store. Sure, mobile sites and Facebook strip out some of the retailers' branding. But the alternative is much worse: if consumers become accustomed to beginning with eBay or Google searches, then retailers like JCPenny become just another search result in the matrix of comparison shopping -- and that means 100% loss of branding.

Research shows that a loss of branding during the "comparison shopping" process would be devastating in its scale: Forrester estimates that by 2014, 53% of all in-store purchases (or $1.4 billion of goods) will be researched on the Web first. Bomersbach says that JCPenny has no clear goals for sales through Facebook, just that "we know we need to be there in front of our customers."