JD.com and Alibaba create indexes to identify Chinese shoppers’ spending trends, which help retailers gain insight.
The social network has created an e-commerce partnerships group that seeks to work more closely with retailers to weave Facebook member data into e-commerce sites. “The future of commerce is social,” says Facebook executive Ethan Beard.
Although retailers ranging from multichannel department store chain J.C. Penney to online clothing seller StyleQ have launched Facebook storefronts where consumers can make purchases on the social network, those efforts are only one piece of social commerce, says Ethan Beard, director of the Facebook Developer Network, who oversees a team that works to build partnerships with merchants and other businesses.
David Fisch oversees a newly created group within Beard’s team that seeks to develop an e-commerce partnerships group. The group is charged with encouraging retailers and other businesses to work more closely with Facebook. Those integrations may include storefronts, though the social network is not encouraging the development of those. Rather, Facebook wants to encourage retailers to integrate the social network into their e-commerce sites. In doing so, Facebook aims to encourage consumers to interact with the social network while shopping and buying.
“The storefronts are really only one piece, and really a pretty small piece, of the burgeoning area of social commerce,” he says. “Our interest isn’t in getting people to create tabs where people can shop but allowing consumers to shop wherever they are and helping them discover products through their friends.”
That strategic positioning make sense, says Sucharita Mulpuru, an e-retail analyst at Forrester Research Inc.
"All the retailers we've talked to say that Facebook storefronts are negligible," she says. "No one visits them and, in fact, few people revisit a fan page after originally Liking it."
That's why Facebook is encouraging retailers to integrate the social network their sites, says Beard. In doing so retailers can create a more robust experience for consumers.
As an example he points to Levi’s Friends Store launched this year. The store, a section of Levi.com, allows shoppers who sign into their Facebook accounts on the site to see their friends’ birthdays, and to view just the merchandise that their Facebook friends and other Facebook users noted that they Like.
He also highlights the launch by Amazon.com of a program that allows consumers to log in to the retail site through their Facebook profiles. Shoppers who log in receive personalized recommendations for movies, music and books based on their Facebook profiles, as well as those of their friends.
“The future of commerce is social,” he says. “There is a tremendous amount of innovation and experimenting going on as companies try to figure out how to make commerce social. Commerce was always a social activity, but e-commerce has largely been a solitary activity. With the rise of Facebook and other online social experiences, people want to bring that social experience back to shopping.”
Facebook’s vision is for a consumer considering, for instance, a single lens reflex camera to be able to get advice from a friend or other Facebook member knowledgeable about SLR cameras, Beard says. Key to this is Facebook’s Open Graph, which allows the social network to gather information about Facebook users, both on the social network itself and from other web sites that tie into Open Graph.
“The guy’s friend might say, ‘Buy the Canon and here’s where I bought mine,’” he says. “That social discovery is what we think can happen throughout the web, on and off of Facebook.com.”
While Facebook doesn’t earn commissions from sales generated by such recommendations, it could potentially benefit from encouraging its users to share more information. More user-generated information on the site could encourage consumers to spend more time on Facebook, and that could help Facebook generate higher advertising sales.
“At the core of Facebook is an experience where users share information, activities and what they care about with their friends,” says Beard. “Our goal is to enable that sharing to take place.”