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Facebook and eBay tie up prompts retailers towards social shopping

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Social shopping has been pushed to the fore once again this week by the announcement this week that eBay is to work Facebook into its open source shopping platforms now available to third-party retailers.

The online marketplace held its annual developers’ conference, Innovate Developer Conference 2011, this week in San Francisco where it unveiled its X.commerce platform, an open commerce system that aims to give developer and retailers the technology and tools they need to develop new kinds of retail sites. Basic use of the package is free to registered users, and developers can download it here. “Through X.commerce,” said eBay president and chief executive John Donahoe, “developers will be the driving force behind the next wave of retail innovation.”

Matthew Mengerink, vice president and general manager, X.commerce said: “Retail used to be all about location – today, it’s all about innovation. Merchants can see the world changing around them as consumers are adopting new technologies that change how they shop. With X.commerce we’re allowing developers to focus on innovation, so merchants can focus on selling.”

Over the course of the conference eBay announced a string of technologies that would form part of the opensource X.commerce ‘ecosystem,’ from Adobe’s digital marketing platform and Kenshoo’s automated campaigns to Outright’s online bookkeeping tool and Milo’s app creation tool and eBay’s own Magento open source platform.

But perhaps the most interesting was the integration of Facebook’s Open Graph platform into the system, as well as into eBay company GSI’s services for larger merchants. Essentially, this will give developers of retail sites the ability to create new social experiences. It will, said Mengerink, “make shopping social for consumers and retailers worldwide.” These experiences might range from allowing developers to install Facebook ‘want’ and ‘like’ buttons on retail websites, so that Facebook users can share their shopping experiences, to creating completely new social experiences that could – at least initially – be unique to a retailer.

This kind of social commerce is something that Facebook’s Gavin Sathianathan touched on in his recent presentation to Internet Retailing 2011, our annual conference.

“Integrating Facebook Open Graph technology across eBay’s global commerce platforms represents a powerful way to bring people together across an inherently social activity – shopping,” said Katie Mitic, director of platform and mobile marketing at Facebook. “We’re just starting to see what’s possible with social commerce, and look forward to the new experiences developers create.”

Our view: This is another example of the trend to expand platforms by consolidating all the add-ons that up to now retailers have had to pay extra and go elsewhere for. IBM did it when it bought Sterling Commerce, Coremetrics and most recently the Unica Corporation, Hybris did it when it recently merged with iCongo and of course, eBay earlier this year bought GSI and Magento. By becoming a one-stop shop ecommerce platform, companies aim to make it easier for retailers to use them, and so expand their share of the market.

But this launch of X.commerce – free to small users who are satisfied with the ‘basic’ package, but coming at a cost to those mid-sized and larger companies who want to achieve a perhaps more sophisticated site – takes this trend on a step. The ‘free’ element is likely to accelerate take up among smaller retailers who will pay for more service as they grow. It also combines two particularly heavily-used sites – eBay and Facebook. There can be few more significant add-ons in this age of social shopping than the giant of social networking, Facebook. But does this make Facebook apps and buttons a must have for retailers? My sense is that the jury is still out on social shopping, with many retailers and agencies as yet unsure that social network users want to mix business with their social interaction in this way. This move may bring forward the day when it does become that ‘must have’. But as yet, it’s still an ‘if’ rather than a ‘when’.

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