E-retailers must focus on their specific goals and examine a vendor’s reputation and market expertise, not referrals.
The company will direct users to Ecwid’s Facebook storefront application.
Payvment, a vendor that sells tools to help retailers open up Facebook storefronts, today announced that is closing up shop after being bought by an undisclosed buyer.
The vendor says it reached an agreement with Ecwid Inc. to refer its users to transfer their Facebook stores to Ecwid’s platform, which enables merchants to embed an e-commerce widget in web pages, blogs and Facebook pages.
Shoppers will continue to be able to buy products via the Payvment Facebook storefronts and the company’s Pinterest-like Lish.com product discovery application until Feb. 14. Then, until Feb. 28, shoppers will be able to browse, but not buy, retailers’ products. The platforms will cease operations on March 1.
The vendor, which also offered retailers a social marketing tool designed to make it easier for retailers to reach consumers through ads on Facebook, has stopped allowing merchants to use its platform to buy ads. It will run ads that merchants have already bought through Feb. 14.
The move offers the latest sign that social commerce—at least as defined by consumers buying directly on Facebook or other social networks—has failed to catch on with many consumers. For instance, according to AppData, which tracks Facebook application usage, Payvment’s social commerce application had only 10,000 active monthly users this month. The platform once claimed to have more than 175,000 merchants using its platform, suggesting that those storefronts were lightly trafficked.
Payvment’s downfall is “another nail in the social commerce coffin,” says Sucharita Mulpuru, a vice president and principal analyst at Forrester Research Inc. “What's ironic is that very small businesses are the few that have some traction on Facebook.”
Rather than seek to drive sales directly on social network, many retailers have focused social media efforts on developing relationships with consumers and referring those shoppers to their web sites. That’s why the Social Media 300, a comprehensive analysis of e-retailers’ social commerce strategies, based its rankings of retailers’ social skills on the percentage of web site traffic that merchants receive from social networks. That referral traffic is increasingly valuable, according to the guide. For instance, the guide's top 50 sites in terms of referral traffic from Facebook derive an average of 9.3% of their overall site traffic from the social network.
Despite the shift in many retailers’ strategies, Ecwid says that it continues to see strong growth. The vendor says that from October to December, total sales from all Ecwid-powered Facebook stores increased 65% from the previous quarter. And, according to AppData, Ecwid has more than 210,000 active monthly users this month.
“It’s exciting to be in the sweet spot of the expanding social commerce trend, as we see our merchants create successful businesses on their Facebook storefronts,” says Ruslan Fazlyev, Ecwid CEO and founder.
Ecwid offers retailers a free basic platform to sell on Facebook and other sites, as well as premium options that cost as much as $99 a month that include features such as advanced inventory management tools.