Stay on Top of Emerging Technology Trends
Get updates impacting your industry from our GigaOm Research Community
Facebook probably has high expectations for e-commerce, but it seems that either it, or the brands and businesses present on the social networking site, are out of sync.
Some commentators see enormous growth opportunities; consultants Booz & Company predict global social commerce sales will be $30 billion in 2015. Others, however, see huge effort for no return. Retail giants like the Gap, or the department store chain JC Penny and Nordstrom have closed their Facebook shops. And a recent study by W3B suggests that just two percent of Facebook’s 1.5 billion users have ever even made a purchase through the social network.
My company has more than 2,000 shops on Facebook, and yet we see more orders from New Zealand, where we have no marketing, no sales presence and no country-specific website, than we do from Facebook.
So where is Facebook’s e-commerce effort missing the mark? There are two key questions: Is Facebook even the right forum for shopping, and if so, are companies trying hard enough?
Commerce versus culture
While the social media marketing manager dreams of millions of loyal customers eagerly sucking up any new product and enthusiastically passing it on to their stable of 140 friends, in reality, most Facebook visitors pop in for a virtual beer with a buddy, or to share and compare cats or holiday photos.
It’s not particularly active communication, and there’s not a direct opportunity to buy anything. It shouldn’t be surprising then that any current F-commerce successes are typically limited to “quick wins” where a visitor is already motivated by the offer of specific deals or the latest iPad sweepstakes.
Sticking to the metaphor of Facebook as a bar, companies have to accept that people generally aren’t receptive to an inappropriate sales pitch while trying to relax. (When was the last time you saw a bank representative rocking out in the club and then turning around and offering their financial services products?) Even a good friend would be de-friended if they pushed their own projects or purchases too often, or even worse, used affiliate links to earn five to seven percent commission by selling to a “friend.”
Making the commonplace complex
That said, Facebook is failing brands by making it difficult to engage in e-commerce on the site. It’s very hard for businesses to highlight that they even have a shop, and every redesign on the site involves yet another reworking of one.
Facebook also wants all transactions to be carried out via their own checkout system. And since other methods of checking out aren’t integrated to use Facebook registration as a common login, customers are also forced to go through multiple logins for delivery and payment info. This tedious, frustrating process is a conversion killer that leaves the consumer better off going out of Facebook to shop where the process is more streamlined and reliable.
A lack of natural navigation for visitors, both in finding a shop and checking out, is another failing for F-commerce. Consumers have experienced enough good communication to expect easy-to-use shopping. When they don’t get it, they just go elsewhere.
And finally, while Facebook credits may have advantages when it comes to virtual goods and micropayment, it’s doubtful the average consumer really wants do deal with yet another form of currency. (As someone who does business in France, Germany, the UK and the U.S., I already have three, thank you very much.)
Unsurprisingly, these difficulties mean that brands and retailers aren’t doing very much on Facebook. If you make it too hard, consumers will never discover that they can buy on the site, and brands will shy away from investment, especially when they see no return.
Why there’s still hope
Despite all those negative setbacks, I’d argue still that the conditions are right for f-commerce:
- Facebook still has a very high, loyal and active user base. If you have customers, it is more than likely that they’re on Facebook. It is also possible that they react to pure advertisement differently than to real content.
- More and more people are now buying from the living room (and soon probably even from the bar). For many of them Facebook could be the first place to look for an opportunity to make a purchase, or one of the most important starting points.
- And while they currently aren’t making many purchases, many Facebook visitors happily talk about brands, recommend products, and share shopping experiences on Facebook. It’s ripe for a well-designed ecommerce approach.
So what can Facebook do to help brands experience better F-commerce? It definitely needs a more friendly way to integrate a shop. The eBay setup, for example, is much easier for retailers to edit and build a section where customers can easily shop online. And Facebook could improve its mobile offering, as the rise of the tablet begins to dictate online sales.
We all know that brands need to maintain their relevance on Facebook with engaging and topical content that activates fans, makes them into advocates and creates a presence for the brand via their fans’ news streams. Yet, so far we haven’t come across anyone in ecommerce who’s truly excited by Facebook. Facebook has to change that if it’s going to make e-commerce a success.