CHANNELADVISOR WHITE PAPER

Facebook Commerce Index(FBCI)

October 2011

NOTE: THE CHANNELADVISOR FACEBOOK COMMERCE INDEX IS A NEW WAY OF TRACKING FACEBOOK COMMERCE

INTRODUCED BY CHANNELADVISOR IN FEBRUARY OF 2011. YOU CAN READ THE BACKGROUND INFORMATION,

SCHEDULE, ETC. IN THIS INTRODUCTORY POST.

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THE CHANNELADVISOR FACEBOOK COMMERCE INDEX GOAL AND METHODThe goal for the ChannelAdvisor Facebook Commerce Index is pretty simple - to track the trends in page fans for online retailers and use that data to deduce best practices for online retailer fan acquisition.

Our methodology involved culling a database of over 500 online retailers that have Facebook Pages. We began tracking their fan counts daily for several months, and based on the data realized that there are a ton of interesting insights to be gained. We decided to launch the Index to release the data monthly and slice the data three ways:

• Top 25 Facebook Commerce Pages - This table will detail the top 25 online retailers by total fan count. Over time, we imagine the ranks will change, new players will enter and some will wane. It will be interesting to track this over time.

• Top 25 Facebook Commerce Growers - This chart will show the top 25 online retailers sorted by the number of total new fans added since the last month. This is a great way to see which retailers are picking up steam and then dig into why.

• Top 25 Facebook Commerce Percentage Growers - Finally, this data set highlights the top 25 percentage growers. At 15m+ fans, if Victoria’s Secret adds 100k fans, that’s actually not a big move; but, if another retailer adds 100k fans from a previous 50k fan base, that’s a meaningful change from a percentage standpoint that we should delve into.

As time goes on and we learn along with readers what is interesting and what you would like to see, we may expand the published lists to be longer or add different views of the data.

Note: if you are a retailer and don’t see your name on the list, or want verification that we have your Facebook page in the database, email us at facebookcommerceindex@channeladvisor.com.

OCTOBER 2011 FACEBOOK COMMERCE INDEX There was some movement in the rankings of the October FBCI, however the growth stayed steady at 3.7%, on par with the 3.8% from last month. Nike made a big jump this month from 17th to 15th, and Levi’s continues to impress with 9% growth.

Here’s what we saw from a macro level in growth of the audience across the entire index:

• Growth - The total number of online retailer fans increased 3.7% since September. • Audience - The total fan count jumped from 249m to 259m fans from September to October. This is the aggregate fan

count across > 500 pages without de-duplication, but indicative of the scale of the Facebook Commerce trends we have all heard anecdotally and are now able to track quantitatively.

Each month we sort the data into three different grids: Top 25, Top 25 Growers and Top 25 Percentage Growers. The charts are included below along with commentary on what some of the biggest movers and shakers did to gain ground during the month of October.

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Top 25

ChannelAdvisor Facebook Commerce Index October 2011 - Top 25

Rank Prev. Rank Retailer October Fans

October Increase

October % Increase

1 1 Victoria's Secret 15,307,759 261,014 2%2 2 adidas Originals 11,165,986 139,235 1%3 3 Victoria's Secret Pink 10,413,662 72,506 1%4 4 Walmart 9,323,010 439,110 5%5 5 Burberry 8,598,039 532,458 6%6 6 Levi's 7,464,384 634,784 9%7 7 WWE 6,760,135 130,779 2%8 8 Lacoste 6,526,625 103,254 2%9 9 Hollister Co. 6,044,509 128,197 2%10 10 Kohl's 5,774,477 60,638 1%11 11 Target 5,578,391 123,762 2%12 12 Abercrombie & Fitch 5,450,902 140,511 3%13 13 American Eagle Outfitters 5,425,455 124,086 2%14 14 Gucci 5,375,022 129,220 2%15 17 Nike 5,132,174 250,909 5%16 15 Aeropostale 5,221,075 112,224 2%17 16 Forever 21 5,152,065 68,706 1%18 18 Best Buy 4,729,191 20,431 0.50%19 19 Ralph Lauren 4,017,496 54,886 1%20 20 NFL 3,948,754 117,809 3%21 21 Hot Topic 3,540,718 120,176 3%22 22 Dolce & Gabbana 3,319,258 73,814 2%23 23 GameStop 2,842,519 100,761 4%24 25 Macy's 2,514,069 90,158 4%25 24 Old Navy 2,527,573 38,468 2%

We’ve color coded this so that blue shows a move UP, orange DOWN and no color is flat.

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ChannelAdvisor Facebook Commerce Index October 2011 - Top Growers

Retailer October Fans

October Increase

October % Increase

Levi's 7,464,384 634,784 9%Burberry 8,598,039 532,458 6%Walmart 9,323,010 439,110 5%Apple Inc. 1,479,689 295,616 20%Victoria's Secret 15,307,759 261,014 2%Nike 5,132,174 250,909 5%Party City 1,146,613 248,519 22%NASCAR 2,125,501 228,959 11%PetSmart 379,064 190,899 50%Eurosport Soccer 156,211 146,943 94%Abercrombie & Fitch 5,450,902 140,511 3%Sephora 1,862,203 140,196 8%adidas Originals 11,165,986 139,235 1%WWE 6,760,135 130,779 2%Gucci 5,375,022 129,220 2%Hollister Co. 6,044,509 128,197 2%American Eagle Outfitters 5,425,455 124,086 2%Target 5,578,391 123,762 2%Hot Topic 3,540,718 120,176 3%NFL 3,948,754 117,809 3%Express 1,408,491 116,375 8%Tommy Hilfiger 1,786,892 113,601 6%Aeropastale 5,221,075 112,224 2%MLB 679,646 110,018 16%Lacoste 6,526,625 103,254 2%

Next we report on the online retailers that added the most absolute fans.

Top Growers

Facebook Commerce Index (FBCI) - October 2011 5

ChannelAdvisor Facebook Commerce Index October 2011 - Top % Growers

Retailer October Fans

October Increase

October % Increase

FreshDirect 11,245 9,318 484%The Shopping Channel 23,575 16,464 232%Eurosport Soccer 303,154 146,943 94%eBags 38,937 17,555 82%1-800 CONTACTS 12,929 5,598 76%King Arthur Flour 45,625 18,643 69%PetSmart 569,963 190,899 50%The Vitamin Shoppe 67,339 21,457 47%The Swiss Colony 12,320 3,765 44%Ice.com 336,003 97,023 41%Bare Necessities 28,978 8,191 39%Power Equipment Direct 17,413 4,904 39%FootSmart 8,781 2,411 38%Gemvara 34,820 9,485 37%Men's Wearhouse 15,605 4,239 37%TheWatchery Luxury Watches 2,553 540 27%Buy.com 65,900 13,333 25%Costume Craze 1,556 293 23%Ace Hardware 159,644 30,047 23%Lumber Liquidators 7,378 1,348 22%Ann Taylor 358,117 65,189 22%Party City 1,395,132 248,519 22%YOOX.COM 59,369 10,379 21%Tool King 23,730 4,093 21%Apple Inc. 1,775,305 295,616 20%

Finally, let’s look at online retailers with > 1k fans by percentage growth.

Top % Growers

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TOP 25: NIKE TAKES A TEAM APPROACH WITH OVER 120 “SUB-PAGES” Reminiscent of September’s charts, there was little movement among the top 25. Nike, however, laced up in October to increase its fan count 5% and jump ahead two spots.

What’s Nike’s game plan? A team approach. Nike has over 120 Facebook pages that cover regions, sports, athletes and NikeTown stores worldwide. On its main Facebook site, Nike touts its total global fan count, which surpassed 128 million last month.

A two-way fan funnel.

It’s likely that a large portion of Nike’s “Likes” are the result of redirected traffic from these category-specific pages. To create a two-way flow of fans, Nike’s main page acts as a starting point for visitors by tagging sub-pages in all its posts to ensure visitors are funneled to a topic of interest.

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FRESHDIRECT: 484% FAN INCREASE An Internet grocer with doorstep delivery, FreshDirect is known for breaking the mold. With its blog-like feel, the fan page of the retailer is really a testament to the brand’s customer-centeredness—the page is covered in festive recipes, holiday meal preparation tips and hundreds of high-quality photos sure to awaken an appetite.

This month, FreshDirect increased its fan count by a jaw-dropping 484%! With its weekly “What’s Your Pick” Sweepstakes, fans could enter to win $25 of grocery cash in a matter of seconds. A sweepstakes isn’t a novel idea, but here are some key things to note about FreshDirect’s take:

1. Short Form: A multiple choice, easy-to-read form avoids the mess that can result from free response survey format. Keeping it short and sweet guarantees more participation.

2. Repeat Contests: FreshDirect has run its sweepstakes five times to date. Participation increased each week as buzz developed around the contest.

3. Rewards for Engagement: Realizing that one-click “Likes” don’t translate to customer lifetime value, FreshDirect gives fans who actively engage (comment, visit outbound links, post) extra entries into the sweepstakes.

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EUROSPORT SOCCER Eurosport Soccer’s drawing for cleats signed by world-famous soccer player Cristiano Ronaldo scored 146,943 Likes for a 94% fan increase, proving that sports fanatics still come running for autographed memorabilia and that quality giveaways may indeed be the most effective strategy for sports-related retailers looking to increase fan count.

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THE SHOPPING CHANNEL – GREW BY 232% Wouldn’t a shopping spree to cover all your holiday gifts be nice this season? More than 16,000 seemed to think so and took their chances with The Shopping Channel’s Giveaway, which will award a $20,000 credit to TheShoppingChannel.com at the end of December. Here are a few interesting notes on how this giveaway helped the page see 232% growth last month:

1. Big Giveaways, Big Growth: While expensive giveaways like this aren’t the best model for smaller retailers, large brands looking for a quick jump in fan count should consider creating a one-time, big-prize contest.

2. Perfect Timing: If it seems like The Shopping Channel is just piggybacking off growing anticipation around the holiday season, they are. The main lesson to learn here is that timing around campaigns, giveaways and posted content is key. Consider the timing for your social media strategy as heavily as you would any other marketing outlet.

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LEVI’S: CREATING A MOVEMENT, NOT JUST “LIKES” Levi’s has secured a place in the Top 25 for months now, but where most top social-savvy brands see a 1-5% increase each month, Levi’s clocked 9% growth in October. How does Levi’s keep the momentum of its campaign to capture 634,784 fans in a single month?

Here’salookintowhat’sfuelingLevi’spage>> Rather than completely wipe its slate clean and scramble to create new content every month with all-too-common posts and contests, Levi’s took the long-term approach, dedicating its entire Facebook page to its “Go Forth” campaign to support Water.org, which has been the main focus of the page since it was created.

Narrowing its page focus has allowed Levi’s to build on its campaign with quality content, from lengthy documentaries of “Pioneers for Water” to celebrity endorsement videos and real-time pledges.

In a world where Facebook pages are quickly becoming one-visit stops for users looking to score discounts or free products, Levi’s is setting itself apart by structuring its Facebook page around a global, long-term campaign. By creating a movement to sustain customer engagement, Levi’s is more likely to increase brand awareness, and ultimately ROI, in the long-run.

CONCLUSIONWith the holidays quickly approaching, we are eager to see how retailers will continue to grow their fan bases. Will a festive promotion or a discount offer draw more followers in the coming months? Stay tuned to see how retailers continue to capture the Facebook audience, and let us know if you see any interesting tactics that we need to highlight in the next edition.

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ABOUT CHANNELADVISORChannelAdvisor is a leading provider of cloud-based e-commerce solutions that enable retailers and manufacturers to increase the scale and profi tability of their global sales through dozens of online channels including Amazon, Google, eBay, Facebook and more. Through automation, analytics and optimization, ChannelAdvisor leverages a single inventory feed to more effi ciently list and advertise products online, connecting suppliers with shoppers to increase sales. Billions of dollars in sales are driven through ChannelAdvisor every year, and thousands of customers depend on ChannelAdvisor to substantially grow their businesses.

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