December 22, 2010, 2:35 PM
Blogger

The future of social commerce isn’t on Facebook

Zak Stambor

Managing Editor

I’ve never felt the need to buy a pair of jeans, a shirt, or really anything else on Facebook. From nearly everyone I regularly talk to about social media and e-commerce, that’s the norm.

Few, if any, retailers who have opened Facebook storefronts where consumers can make purchases on the social network have reported sales, suggesting that the number of consumers who have bought on the social network are few and far between.

But that hasn’t stopped a slew of retailers large and small—from multichannel department store chain J.C. Penney to online clothing seller StyleQ—from launching Facebook storefronts in the past few months. And they’re not even the early adopters.

Those storefronts essentially duplicate the retailer’s web site within Facebook. But those storefronts often offer an inferior experience to a retailer’s e-commerce site because of the natural constraints of building a store within Facebook’s confines.

That’s why Facebook storefronts are not what the social network is after, says Ethan Beard, director of the Facebook Developer Network, who oversees a team that works to build partnerships with merchants and other businesses.

“We’re not trying to recreate Internet on Facebook.com,” he says. “In fact, I spend most of time working with people to socialize the web outside of our site.”

What’s that mean? That the social network knows that consumers like myself don’t care to visit J.C. Penney’s Facebook page, dig through their catalog to find a pair of jeans in my size and complete a purchase on the site.

Facebook understands that consumers like me are conditioned to visiting a retailer’s web site when they want to make a purchase. We’re similarly conditioned to visit Facebook.com to boast about the bargain we scored or the bad customer service experience we had. That’s why Facebook is looking to leverage each destination’s strengths via the Open Graph, which allows the social network to gather information about Facebook users both on the social network and from other sites, as well social plug-ins that allow retailers to add features such as the Like button to their sites.

The Facebook Like button is just one example of the many ways that Facebook is seeking to develop a more nuanced view of social commerce. By making it simple for a consumer to click that she Likes a pair of jeans, Facebook hopes that she does clicks the button so that that information is shared with everyone she’s connected with.

I’m sure Facebook will continue developing more plug-ins and features like the Like button that retailers can add to their sites to encourage consumers to share. That’s because it only makes sense for Facebook to do so. It wants consumers to share more information because more information translates into more content on its site. That, in turn, could lead consumers to spend more time on Facebook. And, with more consumers spending more time on the site, Facebook can generate higher advertising sales.

Comments | 5 Responses

  • Disagree. The future of social commerce does include Facebook. Facebook provides a very powerful and opportunistic channel to sell products and conduct commerce. If location is the number one rule in retail, than 500 million people makes Facebook a must-have location. It will not replace e-commerce, but it will complement it with new opportunity and experiences. Just as I can buy a Coke at the supermarket and at McDonalds and at the ballgame and in a vending machine. I can buy the same products at the local store and on the merchants website and thru eBay and now on Facebook. It doesn't have to be either/or. While we are in the first inning of social commerce, its easy to say there are no hits or runs, but maybe a few errors. The new year promises to heat things up as we move away from transplanting an e-commerce store into a facebook tab and hope for the best and into merchandising with social networking features that engages fans in new and powerful ways that e-commerce simply does not address. There are two facebook stores, powered by Milyoni (disclosure: my company), that did extremely well in the last few months...The Miami Heat and the University of Oklahoma. Not because they put a store in Facebook, but because they did a great job of merchandising using social networking that rewarded their fans, generated buzz, and provided special offers and exclusive deals not found elsewhere. With all due respect to Ethan Beard and the Facebook team, they didn't predict the potential of gaming within Facebook, they might not know exactly how this will play out in commerce either. They know its coming in a big way...hats off to them for letting the market and innovators figure this one out and letting start-ups go at it with vigor. Facebook is wide OPEN for commerce.

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  • what was previous " comment" anyway, Facebook sucks. I do not see it as a primary e commerce site. It is already gummed up w/games @ bad applications. Just to stay current socially U need a secratary. Mark Zuckerman,please do us all a favor.Cash out NOW. Let GM buy it, run it into the ground,and we can get on with our lives.

  • Provocative post Zak. I agree with you...The future of social commerce is not on Facebook. or perhaps I should say...The future of social commerce should not be on Facebook. Without a doubt, Facebook is a vital component of social media engagement, a relationship and loyalty builder. However, from a marketing perspective, I find myself reminding Retailers and consumer brand clients that they should never give up ownership of their relationship with their customers. I believe that the primary website based on the user experience (ecommerce website or mobile mcommerce version driven by device used by consumer) should always be the destination. Social media is a powerful tool to build and engage with audiences, but should never own your relationship with the consumer. From the perspective fo the CMO or CEO, I believe making Facebook the destination increases the power of Facebook's more than it builds social influence of the brand. When the platform is used as a jumping point to their own ecommerce or mcommerce site, there is much more to be gained...such as analytics, nimble content development, optimization for search, emails based on shopping cart abandonment, etc. can truly build and leverage those relationships to improve loyalty and sales. Facebook is a fabulous way to drive promotion, sale of specific products, customer feedback and one-to-one engagement, but Facebook's desire to become the platform for purchases is designed purely for their benefit. Don't get me wrogn, there is no harm in a good business model, and with an IPO slated for 2012, Facebook has great incentive to aggregate as many eyeballs and relationships as possible to generate ad revenue to deliver value to current and future shareholders. However, It is incumbant upon each Internet Retailer to identify the proper platform for their long-term success. The answer could very well include a Facebook commerce page. However, each Retailer must leverage strategy, analysis and long-term goals to determine the proper integration between their store and social platforms. I would be remiss if I didn't also mention the additional benefit created by the relationship between social queus and organic search engine performance for Internet Retailers...especially when traffic is directed to their own website. Much is to be gained from search when content on the Retailer's web site is "liked", shared, or specific promotions, deals or sales are shared on visitor's social media accounts. Bottom line...Facebook is here to stay, and there is genius behind the Open Graph model, but I believe the Retailer should always own the relationship with their customers for optimum results over time. I look forward to reading other's thoughts. Rebecca Murtagh a/k/ @VirtualMarketer on Twitter

  • Zak-you hit the nail on the head. Unless Facebook can offer value to the user experience, they have no business getting involved with eCommerce. By value, I mean a reason people would use Facebook to purchase. eBay offers value with their auction type model, shopping comparison sites offer aggregate data for quick purchasing review, search engines offer relevant search results, marketplaces (Amazon, Sears, Walmart) offer variety, but more importantly, customers who are ready to buy. There is no reason for the customer to shop or buy on Facebook. Also, with all the third party plugins for Facebook storefronts, it will make it extremely difficult for Facebook to aggregate and standardize this data. By opening up their software platform (which has had it's fair share of problems), they lose control and standardization which would help them develop a unified eCommerce experience. If Facebook starts to leverage the reviews, Like's, and other data points it has been collecting (on products, businesses, etc...), they could have a very unique and valuable system for product comparison/search.

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