Facebook sweeps up e-commerce talent by acquiring Tagtile

Tagtile, the mobile loyalty card system designed for local businesses has been quietly acquired by Facebook. Facebook is acquiring all of Tagtiles assets and it looks like it will also change the way that Tagtile currently works.

Tagtile is aimed at businesses that want to ensure hyper local loyalty from its customers. It has two components -- a powered hardware device in store -- and a phone app.

If you have the app installed on your iPhone or Android, generating loyalty points is easy enough.

If you visit a store that has the Tagtile cube, all you need to do is tap your phone against the cube to record your visit to the store.

Tagtile connects your purchase history with your customer identity. Merchants can extract information from the data about customers' geographic location, what they buy and how often they buy it from the store.

The merchant can then keep the customers engaged by sending push notifications and offers to the phone app.

The merchant can interact directly with the customer base, keep customer engagement strong and encourage them to revisit the local business.

Facebook and Twitter is integrated into the app so that customers can comment about their experience at the store. It is then tied back to the customer record.

Social / Local loyalty

Other international brands have recognised the power of the local shopper and are merging their e-commerce and social activities to keep these customers engaged. Walmart announced a partnership with Facebook last year to bring local relevance to customers.

Knowing what the customer is talking about at a hyper local level can highlight deeper levels of market data to bring exactly what the customer wants to the local store.

Near Field Communication devices such as the Tagtile, or similar to that used in the City Peaks community game monitor when goods are purchased, by whom and when.

Monitoring local Twitter and Facebook conversations gives an extra layer of intelligence to stores.  Knowing what your customers are talking about in their social conversations at a local level can ensure that merchants have the exact products that will bring customers into the stores.

So why buy Tagtile?

Facebook needs to succeed with its e-commerce activities post IPO in case advertising revenue starts to downturn. It needs to be able to mine its data stores to identify trends in customer spending to sell on to its business partners.

It already knows more about us than Google does but it does not share its rich data at any deep level with its partners.

Facebook needs to be able to bundle a solution to sell to brands who want to tap into Facebook's store of data for closer customer connections. It needs to find an alternative revenue stream to keep its shareholders happy as it builds its e-commerce offerings post IPO.

I reckon Facebook will be quietly buying up many more start-ups in Silicon Valley that offer mobile e-commerce and location based products such as Gowalla. It needs to do this to remain e-commerce credible and diversify its future revenue streams.

And with the massive amounts of cash that it will raise when it floats, it will have enough to buy pretty much whatever it wants...

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