35 Million Fans and Counting: Shoe Lovers’ CEO Bets Big on Social Commerce

It’s no secret that social networking platforms are penetrating the $1.6 trillion e-commerce space. Chatter about Facebook, Twitter, Pinterest and even Google and YouTube launching ‘buy buttons’ has persisted for over a year. Tandem has been evaluating this evolution, mulling over what the turn to commerce means for social media stakeholders. As part of our inquiry, we sat down with one of our portfolio company founders, Felipe Servin of Shoe Lovers, in order to hear his take on the social commerce opportunity straight from the frontlines. Shoe Lovers currently lays claim to the most engaged page on Facebook in the world with over 35 million very active fans.

Nick Mayberry: Please take a moment to introduce Shoe Lovers to our readers who may not be familiar with the company.

Felipe Servin: Sure. Shoe Lovers, also known to our Spanish-speaking community as Yo Amo los Zapatos, began in 2013 with the belief that social media was expanding beyond your social circle to include broader groups tied together by the things they love. We launched Yo Amo los Zapatos to build and engage an audience of Latina shoe lovers with the end goal of producing and selling the shoes they love most.

Since beginning our project, we’ve grown Shoe Lovers’ Facebook fan base to over 35 million users. So far in 2015, we’ve added a daily average of 21,000 fans and now organically reach 18 million fans a day. Our fans interact with Shoe Lovers approximately 600 million times each month, which makes us the most engaging Facebook page in the world, among ALL brands and ALL categories.

What have you learned about your market from building Shoe Lovers?

The overwhelming reaction to Yo Amo los Zapatos on Facebook definitely taught us the power of speaking directly to Latinos, particularly on social networks. Building a company around a target demographic from the ground up lends an authenticity that is extremely powerful when it comes time to market brands or sell products to that audience. Hispanics command $1.5 trillion worth of buying power in the U.S. alone. That’s no niche.

We are also fortunate that Hispanics are so thoroughly engaged on social networks, and that our main presence was built on Facebook. Latinas make 4 times as many comments on Facebook as other groups of women. We attribute this to their cultural tendency to develop close personal relationships of trust quickly. We’ve even had some of our fans talk to our brand about their family problems!

It’s been said that the 3 Cs of social media marketing are Content, Community, and Commerce. Where are you seeing the most innovation?

Each of the 3 Cs is integral to the equation; you cannot isolate them from each other. But of the three, the one that is changing the most is definitely commerce. Social media is having a near revolutionary effect on commerce. I like to view traditional commerce as a vending machine: transactional, robotic, and emotionless. Thanks to social media, commerce is becoming more and more emotional: it is now about discovery and inspiration. Brand strategies are moving from a push model to a pull model to respond to the desires of a hyper-connected generation. Brands are using content to engage with this community on an emotional level in order to pull them into a commercial transaction. This new, emotional angle on commerce is where we’re seeing massive innovation, and Shoe Lovers hopes to be a major driver of this change.

Your community is clearly highly engaged around your content. But does this engagement equate to intent to purchase? Will their involvement translate into sales?

To answer your first question, no. Our fans do not engage with our brand with the intent to purchase shoes, but more as a form of entertainment. They come to our page to view interesting content and to communicate with like-minded shoe lovers. This is what social media is all about. But that doesn’t mean their engagement won’t translate into sales. Look at YouTube influencers: they sell product all the time, but their audience isn’t there with the intent to transact commerce.

But in order for this model to work, you need to meet at least two conditions. First, your product and content must evoke emotion. If used right, creative tools like beautiful images and meaningful video can induce emotion and excitement among a fan following that end up pulling them into a commercial transaction. Second, you also need a relatively large audience to broadcast to. Without intent, you’re only going to end up with so many customers at the end of the path to purchase, so you need to begin with as large an audience as possible at the outset.

Considering all the changes that have happened to Facebook over the years, if you were starting Shoe Lovers today, would you still build your audience on this social network?

I don’t want to sound like a Facebook groupie, but I do love it. In terms of paid acquisition, Facebook still delivers the best ROI in the business. This holds especially true if we’re talking about direct response marketing, including app installs and consumer purchases. Facebook’s effective price is lower than Google’s and delivers an amplification factor through network effects that is hard to beat.

So, to answer your question, I would use Facebook again, but I would go about building the business differently. I would have to. You can’t rely solely on organic growth and network effects like we did originally to deliver an impressive fan following anymore. Paid acquisition is a practical requirement. However, paid acquisition tends to deliver a lower value fan on average. So, you need to develop a workaround. We manage to continue adding high quality fans at a fast pace because our strategy puts a premium on content quality. We devote time to producing great content, and then we watch how different content performs in an organic environment. We then take only the best performing pieces and throw money behind them in the form of paid acquisition to take the metrics to the next level.

Is Facebook the future of online commerce?

Yes and no. Commerce will happen at increasing levels through Facebook, but it will not be a primary revenue driver for the company. If Facebook wanted to be a true e-commerce company, it would be charging for transacting commerce on its platform. But, it’s not. Facebook isn’t taking any commission on its buy button, and it isn’t limiting buy buttons to paid ads. It’s an entirely organic new category of shareable media that is in line with its traditional business of creating great tools to boost content and hyper-target audiences.

What are the largest points of friction Facebook will have to address in order to be successful in commerce as a part of its overall strategy?

First and foremost, trust. Facebook has always had issues around trust. From the convoluted path a user must follow to adjust their privacy settings to the controversies over the sale or misuse of user data, FB users are generally ready to believe the worst about the company. Now, this same company is asking you to trust it with your credit card and delivery address. Will you?

When it comes to actual functionality of the product, I have used the buy button a number of times and was surprised to find a lack of order tracking and history functionality. As a consumer, I have been trained that e-commerce services provide me the luxury of checking where my package is at any given time. I felt like on Facebook I was buying blind.

On the other side of the equation, as a merchant, there is a surprising lack of data transparency. When I release a product and attach the buy button, I want to know if someone clicks the button or not. I want to know how far along the path to purchase they got, and how many people are abandoning their carts. The platform may not be ready for this yet, but we merchants need it.

Lastly, customer care. Fortunately, we have a huge Facebook following and our customers know exactly how to reach us there. But other merchants might not be so lucky, and their customers may not know how to easily change or add to their order post-purchase. The normal minimum customer care experience is lacking on the platform.

That being said, I look forward to the huge boost e-commerce will get once Facebook does figure out these faults. It could become a platform for any merchant to build an e-commerce presence, without paying for hosting, analytics, or even discovery if they so choose.

How big can a company like Shoe Lovers really get? How big is the social commerce opportunity?

We’re obviously very bullish on the space or we wouldn’t be in it! We’ve set lofty goals for ourselves, like becoming the largest fashion brand on Facebook and selling hundreds of millions of dollars in shoes in coming years. And thanks to our highly engaged community, this is looking like a more conservative estimate by the day.

As it stands, a few large social networks like Facebook and Pinterest will see commerce offerings become an ever more accretive part of their revenue model. These are powerful friends to have for a startup. But even without such powerful friends, big commerce businesses can be built leveraging the nature of social. Houzz proved this when it became the first unicorn in the space. There’s still room for a handful of major social commerce players to emerge. Shoe Lovers plans on being one of them.

This article is cross-published on Shift by Tandem. To receive weekly startup insights right in your inbox, sign up here.

Featured image courtesy of rickharris via Flickr.