Analysis

Guest comment: The end of Facebook commerce?

Charles Nicholls SeeWhy HiRes2

Is selling on Facebook like trying to sell stuff to people hanging out at a bar? Charles Nicholls of SeeWhy considers.

by Charles Nicholls

According to a recent Bloomberg article, GameStop, Gap Inc, JC Penney and Nordstrom have all closed their Facebook storefronts over the past year. This shouldn’t be a surprise. While Facebook may be the most visited website, with 845 million members, consumers go there to hang out, not shop. Sucharita Mulpuru, an analyst at Forrester Research, refers to this as “like trying to sell stuff to people while they’re hanging out with their friends at the bar.”

For brand marketers, Facebook is a great place to engage directly with consumers, build relationships and drive traffic to their ecommerce sites. But Facebook as a shopping destination? With a few notable exceptions (inherently social businesses such as music, games and entertainment), it just doesn’t make sense to invest in a Facebook storefront. But using Facebook to drive traffic to your ecommerce site is a well proven and very effective method of driving high quality traffic to the site.

A year ago, we stuck our necks out and called the Facebook commerce baby “ugly.” Despite all the hype, we advised steering clear of Facebook storefronts and focusing on ecommerce social integration via plugins (Forget Selling on Facebook (for now) – Think Social Plugins). Since our original post last year, the picture has become more complex since many consumers now have a variety of devices for socializing, researching and shopping. While consumers will undoubtedly use a variety of devices, their preferred device for shopping is a desktop/laptop and an ecommerce site. And a mobile ecommerce site is preferred over a smartphone app.

Here’s why consumers don’t want to shop on Facebook:

Purpose
Currently, consumers aren’t going to social networks to shop, but instead to socialize, have fun and share. This shows a disconnect between the way some brand marketers view social networking sites (as a channel to sell more) and the way that consumers view them (as a way of interacting and having fun).

Cannibalizing, not additive
Of the limited number of success stories for Facebook stores, a common theme emerges: promotions. Promotions are effective in driving traffic to the Facebook store and securing a conversion. But our issue with these promotions is that they can be used to drive traffic to the ecommerce store just as effectively, where the buyer will most likely spend more than they would on Facebook. Until evidence emerges that Facebook storefronts are additive and create incremental sales, they are doomed to failure. What we should be thinking more about is how we can make shopping inherently more social, rather than cannibalizing ecommerce sales with promotions just to promote a different storefront.

Trust
Facebook, in particular, has a troubled relationship with its users when it comes to privacy. And several studies have shown that the majority of social network users are unwilling to shop on a social network due to security and privacy fears. What will Facebook do with my information if I do shop there?
Limited range

Facebook stores have a more limited range than the full store, so it’s inevitable that serious shoppers will navigate to the main ecommerce store. Limited ranges also lead to lower average order values.

Another negative impact of a Facebook store is that there is a reduced screen width in which to display merchandise. This leads to a practical limitation of a three or four column grid for displaying products, smaller images, and the right hand column being reserved for advertisements.

This is also a major limitation when considering mobile sites and apps where the screen size limits the images, download speeds limit the quality, and for apps, limited ranges typically apply.

There are, of course, always exceptions where there is an inherently social aspect to the business, and Facebook commerce can thrive. But for the majority of brands and merchandisers, it just doesn’t make sense. In the end, the focus should remain on making ecommerce more social and accessible for different device types.

Charles Nicholls is founder and chief strategy officer at shopping cart recovery company SeeWhy, and author of the SeeWhy blog.

3 comments on “Guest comment: The end of Facebook commerce?

  1. Janet Garcia said:

    Direct selling from Facebook storefronts may not be proving as successful as anticipated, but there is still strong evidence that using Facebook for advertising and marketing can bring exceptional rewards – when it is done properly.

    Because it enables precise targeting of core markets, Facebook works in a way that no other form of online marketing has done so far, bringing a significant return on a relatively modest investment. To call the Facebook commerce model “an ugly baby” is to ignore what is, in this economic climate, a rare opportunity for SMBs to attract new customers.

    The only thing holding businesses back is not the model itself, but a lack of understanding. Yes, selling on Facebook needs a different approach. However, don’t put small businesses off from even bothering to gain this knowledge and so miss an exceptional opportunity to find new customers and increase sales.

    Janet Garcia, director of elearning company MindLeaders

  2. Pingback: Does Facebook Commerce Work? | eCommerceSmith

  3. I believe social commerce doesn’t mean to move store on Facebook. The social network has another destination.

    I wrote a blog post two weeks ago about this: Why E-commerce won’t move on Facebook

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