Facebook Take Another Shot at Ecommerce
by Kate Enright
Facebook began dabbling in ecommerce about 3 years ago when 1-800-flowers set up the first Facebook virtual storefront and began selling through the social media giant. The idea of “F-Commerce” then began to take off in early 2011 with many large brands deciding to take advantage of large fan bases on the site. Few doubted the success of selling to Facebook fans, but those who did, slated it from the beginning. The doubters were proved right when at the start of 2012 a list of big names pulled out of the F-Commerce game due to lack of return on investment. Gamestop, one of the largest retailers on Facebook closed its store saying it was “not a place to sell”. It turned out that people did not want to buy from their “favourite” retailers through Facebook. But now Facebook have changed tack and come back to the ecommerce table with a whole new game plan. Gifts.
In May 2012 Facebook acquired social gifting mobile app Karma. At the time it was thought that Facebook’s interest in Karma was more than likely down to its expertise in mobile. Afterall, it’s no secret that Facebook’s mobile app leaves a lot to be desired. It’s recently come to light however that it was much more tactical that that. Facebook announced recently that they are will be integrating social gifting into the site. Facebook Gifts will make great use of their social graph by not alone reminding users of friend’s birthdays but also taking the subsequent uncertainty of the gift choice out of the process. They will make recommendations for you, partially based on who’s paying them, and partially based on your friends’ preferences. These preferences are pulled from the system through previous likes, and also through the installation of a “want” button will make it even easier for you. Users can browse through the store and hit “want” on items they like, similar to a wish-list.
In an article we wrote in June of this year we spoke about how Amazon were making great use of Facebook’s Social Graph by basically doing just the above. They began using their “login with Facebook” feature in order to pull data from profiles such as birth-dates and Likes to encourage gifting within Amazon itself. It seems they were way ahead of the game on this one.
So what are the benefits of Facebook’s solution over Amazon’s? Well the main ones are in the addresses and notifications. Firstly, when sending a gift to someone a gift on Amazon, or any other ecommerce site, not knowing their address can prove tricky… With Facebook, it’s possible for a notification to be sent to the receiver when you’ve bought the gift asking them to choose an existing stored address or input a new one. The address they choose will be the one the gift is sent to. No more asking friends or taking a guess! As well as this, the recipient is immediately notified when the gift id bought, so they know you’ve bought them a gift right away. This means that you don’t have to wait until the gift is delivered in order to redeem your brownie points!
From the point of view of the retailers, the method of sharing product details through the “want” button and the gifting feature should prove to be much more valuable than the current one of posting images in photo albums. The action of “wanting” something will be posted to the users Timeline, thus sharing the product with all their friends, similar to the way Pinterest use the Pin function. In exchange for a split (undisclosed) of the money spent by users on the gifts, Facebook photographs the products, writes custom copy, and seamlessly integrates into the partner’s shipping process, while also tracking shipping and keeping buyers and recipients updated on the products progress in transit.
Victoria’s secret is one of the first companies to test the piloted (US only) “want” button. It will be interesting to see what their response is. One thing is for sure though, with Gifts, Facebook have finally hit the nail on the head with ecommerce, or at the very least, are far closer to the monetising mark than ever before.