{{ searchResult.published_at | date:'d MMMM yyyy' }}

Loading ...
Loading ...

Enter a search term such as “mobile analytics” or browse our content using the filters above.

No_results

That’s not only a poor Scrabble score but we also couldn’t find any results matching “”.
Check your spelling or try broadening your search.

Logo_distressed

Sorry about this, there is a problem with our search at the moment.
Please try again later.

Yesterday afternoon, I had serious WTF moment as I read an article titled “Facebook has limited future in e-commerce”.  

The basis of the piece was more of a news-feature than opinion, founded around a piece of research from Shoppercentric. I really feel that the conclusions that have been drawn seem to be fairly short-sighted.

I’ve previously written about e-commerce on Facebook, or F-commerce, as it’s increasingly becoming known across the industry and it’s a fascinating area of development.

It’s like watching a replay of where the online industry was ten years ago: optimistic, exciting and full of potential. So it shouldn’t really come as a surprise that I have a few issues with the findings of the report. 

My first point is that although a thousand consumers were assessed, it’s UK-based. This is a horribly important fact that seems to have been somewhat overlooked. 

Looking at Facebook’s overall demographics, the US user-base is more than five times greater than the UK. It’s a matter of size and scale and, as a general rule, this is why the USA is, more often than not, the canary in the coal mine for the digital industry. When it comes to f-commerce, this is no exception.

 Here’s some killer examples of brands selling on Facebook. They range across FMCG and travel, to fashion and luxury goods. 

Make a mental note how many of them are based in the States. 

Barneys

Coca-Cola

Coleman Co.

Delta

Disney

Heels

RealGifts

Summit Brands

See my point? Pretty much all of them are USA access-only, likely because with a larger captive audience, there’s more room for brands to experiment in order to find out what works: An important part of retailing, online and offline. 

So, moving this back across the pond, to the UK. We all heard the news a few weeks ago that ASOS and French Connection are upping their f-commerce activities and it’s more than likely that this will set the benchmark for a lot of retailers in the fashion sector. And that’s just one industry.

As in the examples I’ve given, most things can be sold online. Facebook is just a platform extension to e-commerce, limited only by their internal regulations for commercial brands.  

Looking forward, the news that Facebook is scrapping FBML in a few weeks time, to replace it with iFrames means that the floodgates will be opened to online retailers.

This move to iFrames means three key things for commercial Facebook pages: Better design, better tracking and better selling functionality. 

I won’t dwell on this too much, but the flexibility that this will bring could launch f-commerce into another level over the next twelve months or so.

Secure transactions using the likes of PayPal or VBV are likely to emerge onsite, along with the ability of e-commerce merchants to integrate and display their entire online stock inside Facebook to an even more customised degree. 

Along these lines, I was surprised by Shoppercentric’s comment that 

“If Facebook starts to overlap too much with commerce web sites, it raises the question, why do you have the two touch points?"

If anything so far, best practice e-commerce has taught us that if you have the resources to extend to different touch points, then do it. It’s not either/or. It’s about enabling consumers to have the choice to shop where they choose. 

As a wider concept, think about Facebook Places Deals. Again, this was initially launched in the USA and then rolled out to the UK, plus a few other select countries. Although it’s not strictly f-commerce, it’s arguably on the edge of it. The UK retailers currently involved in rewarding consumers with physical products and monetary discounts include Argos, Debenhams, Starbucks and O2. 

A fundamental trait of social media is allowing consumers to increasingly find themselves empowered in how, where and when they engage with commercial businesses. Again, I’ll return to the point that Facebook can act as an extension of this. 

The findings of the research are accurate in that social media is currently performing poorly as a commerce channel with 63% of consumers/shoppers visiting a retailers website to make a purchase, compared with just 6% through social media.

But this isn’t particularly new or revealing. Econsultancy’s own consumer reports demonstrate similar findings. A major barrier that’s seen across the online industry is the slow rate of consumer adoption and these figures are just a reflection of that.

We’ve seen it with the birth and growth of static e-commerce and mobile-commerce, the latter of which is still very much in its infancy, but now becoming widely-used, predicted to be worth some £275m of online retail spend in the UK alone

Another barrier to f-commerce is Facebook itself, with various issues of usability, security and privacy. But as an online presence, it’s not going away anytime soon and is consciously trying to address these issues, as evidenced by the shift away from FBML. 

By streamlining and optimising itself, the cyclical process of consumer engagement and brand presence with be strengthened, allowing Facebook to continue evolving into a powerful platform that can span different functions for both users and businesses. 

To say Facebook has limited future in e-commerce is far from the truth. In reality, the future is likely to be limitless. 

[Image credit: bb_matt]

Jake Hird

Published 4 March, 2011 by Jake Hird

Jake Hird is Econsultancy Australia's Director of Research and Education. Follow him on Twitter and Google+, connect with him on LinkedIn or see what he's keeping an eye on via diigo

126 more posts from this author

Comments (15)

Comment
No-profile-pic
Save or Cancel
Avatar-blank-50x50

Alex Savic

F-Commerce has a bright future but shop systems will have to evolve beyond today's static fan page shops and move into the stream, which is where the value-add of social commerce really lies.

Alex Savic
CEO - NextWidgets.com

about 5 years ago

Paul Rouke

Paul Rouke, Founder & Director of Optimisation at PRWDSmall Business Multi-user

Thanks for a very interesting and insightful read Jake. Personally the large retailers we are currently working with are yet to dip their toes in to the f-commerce water but over the next 12-18 months I expect this rapidly developing additional sales channel will really start to gain more traction in the UK.

The potential to harness the customer intelligence that Facebook is continually building in to delivering targetted, personalised shopping experiences for brands is huge - just ask Amazon if there is value in providing personalised product recommendations and customer experience!

about 5 years ago

Avatar-blank-50x50

Brent Nau

I think the bigger failure is the ability to search for products. Facebook main search fails. Unless they start to incorporate Bing's search algorithm, I think this is big limitation for the smaller companies to get their products found.

about 5 years ago

Jake Hird

Jake Hird, Director of Research and Education at Econsultancy

@Alex: Yes, agree.

@Paul: Thanks. Yup, a lot of retailers are yet to jump in - or even assess if this a direction they should consider for the future. What's right for one business isn't necessarily right for another, but ignoring or down-playing what's evidently a growing area usually means playing catchup later on!

In my opinion, although f-commerce will probably play quite a large part in Facebook's commerce future, it will also likely be a very large retail driver/influencer. This will definitely go beyond just in-platform transactions and probably further the bridge between online and offline shopping - quite possibly using mobile access: Just look at how many of their users access the site via mobile functionality. It *could* potentially open a whole new m-commerce channel...

about 5 years ago

Avatar-blank-50x50

Danielle Pinnington, Managing Director, Shoppercentric

Thanks Jake for referencing our research, but we’d like to clarify what the whole report actually said, not just the Computing article.

We actually agree with you that this is a fascinating area of development, which is why we put this report together in the first place. What we wanted to do was bring the shopper perspective into the debate and if you read our full report it will be clear that we aren’t actually suggesting Facebook has limited future – although that can be one interpretation of specific elements of the findings. What we are saying, however, is that companies which are looking to use social networks within their marketing strategies need to avoid a ‘just do it’ approach – they need to take the time to understand what the audience wants from them, and how to deliver that well. In addition, our point about the overlap with websites is that social networking should be used alongside websites to broaden the reach of the brand or retailer message, rather than duplicating it. UK shoppers at the moment struggle to see the benefit of a branded / retailer Facebook page if it simply replicates what they can access via a website – so if both these e-commerce channels have a clear and distinct role in the marketing strategy then the benefit to the company and to their target audience is far greater.

As you rightly point out, e-commerce on Facebook now is where the online industry was 10 years ago – with a lot of businesses scrambling to get involved, with some early short comings in terms of success. Based on what we’ve learnt through this research we’d recommend businesses take time to understand the environment they are entering, the unique opportunities that e-commerce on Facebook offers, and create the right page to get the right message across by stimulating that real engagement with the shopper that social networks can create.

For a full copy of our report, which is free to download, please visit: http://www.shoppercentric.com/evolution/index.htm

about 5 years ago

Avatar-blank-50x50

Molly Griffin

Great article! I think it will be interesting to watch the movement of "f commerce" over the next year. I'm most interested in watching the influence of small businesses on facebook, i know here at Dydacomp a number of our eCommerce clients are apprehensive about moving stores on to facebook.

In todays marketing world, personalization and engaging with customers are key to increasing online conversation rates. These are two capabilities that Facebook can clearly offer customers.

Thanks for this one!

Molly Griffin
Marketing Associate at Dydacomp
http://www.dydacomp.com

about 5 years ago

Deborah Lewis

Deborah Lewis, Managing Partner at The Hero Machine

Great article. I wonder if F-commerce is as much about experimentation as strategy at the moment? I know several SMEs - e.g. a children's clothes retailer in Hertfordshire - that are using F-commerce really successfully alongside a real shop and an online shop. They find that ever time they post a new product or special promotion on Facebook they get much faster response than via any other comms method, e.g. an e-mail or newsletter. So F-commerce is looking really good to them! What they are finding is of course that the people who are purchasing via Facebook are people who'd either been in the store then gone online, or come straight to the online shop, bought something, been happy with the experience, connected via Facebook.... and suddenly became repeat purchasers. It's not the first purchase. But it is really interesting and is certainly going to grow for the future.

And by the way, I think Shoppercentric should take huge credit for a) tracking their comments online then b) coming on to this to give a response and c) getting their MD to respond rather than someone more junior. My bag is PR and in my experience, companies often get this stuff wrong.

about 5 years ago

Jake Hird

Jake Hird, Director of Research and Education at Econsultancy

@Danielle: Not my objective to call your research into question. The report is pretty sound, as are your comments here... My main bugbear was with the article I saw covering it. (I actually read a much more concise piece in Marketing Magazine over the weekend where it was explored in greater depth).
And as @Deborah highlights - Kudos points for your quick response and explanation.

- J

about 5 years ago

Avatar-blank-50x50

Nils Eriksen

Great reading on the different research of customer and consumers behavior on different touch points.
- Thank you for this contribution!

i am convinced that all those front words, letters on Commerce just simply blur the overall picture. And are growing in the vendors marketing hype of reasons to go in one or the other way.

It is plain an simple just Commerce.
You need to implement an agile commerce strategy to attract the super connected consumer.

about 5 years ago

Avatar-blank-50x50

mike groves

Hi Jake,
As usual another great piece, I hope you don't mind if I borrow some of this for a client meeting!

What's interesting is the opportunities for SMEs here, who can potentially move quicker than larger more established brands. I've certainly been pushing an fshop to everybody I talk to - and the iframe development will make this even easier.

In the first dotcom boom there was sometimes a 'build it and they will come' mentality.It strikes me that with Facebook 'they' (meaning consumers) are already there. So let's get building

about 5 years ago

Avatar-blank-50x50

Jonathan Waddingham

Hi Jake, interesting article. I think it's true that the UK has been slower to try out f-commerce (aside - that's a horrible name for it, surely we can do better). You're also right that the move to allow iframe applications gives developers greater freedom in allowing transactions through Facebook - it has enabled us at JustGiving to develop a new app that allows people to donate to a charity without leaving Facebook - a first in the UK. We're currently BETA testing this with charities, giving them a way to accept donations through their Facebook page, but will be rolling it out soon to individual charity supporters too.

I think it's going to be really interesting to see how people react to this - as not only does adding transactional functionality give brands/charities/orgs greater reach in being where their users are, but you can also tap into Facebook's communication tools to encourage your donors/buyers to encourage all their Facebook friends to buy or donate too.

about 5 years ago

Neil McClements

Neil McClements, Managing Director at Merchenta

Jake,

The US-influence is understandable. At Merchenta we see a lot more interest from US-retailers for social commerce than in the UK. Partly its market size and partly a local wariness of having a go based on current perception of consumer trends.

That said, we've had a UK-based client running Merchenta MiniStore on Facebook for a few months now. It's fully integrated into their affiliate channel and main ecommerce site, too. See http://www.facebook.com/PiaJewellery - the 'Shop Pia!' tab took just 15 minutes to setup with Merchenta.

There's a wealth of opportunity for social shopping, sharing and the organic traffic that a well designed, engaging Facebook store generates.

I spoke about some of our experience (and sample conversion rates) at TFMA last week, a copy of the slides is available here for anyone who's interested - http://blog.merchenta.com/onsite-vs-offsite-ecommerce

about 5 years ago

Jake Hird

Jake Hird, Director of Research and Education at Econsultancy

Thanks all for the responses! some really interesting points and opinions. Appreciate the time taken to comment on this.

about 5 years ago

Avatar-blank-50x50

Tom Eldridge

Here's the dilemma I have regarding F-commerce as a concept. Facebook is not the internet, at least not yet. It's a closed social media platform. As an enterprise looking to apply a F-commerce as part of it's digital strategy I would be looking for detailed metrics out of that system.

At this stage I don't believe Facebook is mature enough to deliver that granularity of data that enterprises expect.

Another point to consider is that are we seeing an unnecessary duplication of work? Will brands have an e-commerce as well as a F-commerce solution side by side? I would question whether part of a holistic digital strategy this will bring the commercial benefits it promises. I suspect that it may only be viable to those enterprises with deep pockets.

I suspect Facebook execs and Digital agencies entrusted to deliver F-commerce are the real winners in this business model.

about 5 years ago

Avatar-blank-50x50

Michael Miller

Thanks for this. I am struggling to figure out if I want to take the time to do this... I think it just a matter of time...

about 5 years ago

Comment
No-profile-pic
Save or Cancel
Daily_pulse_signup_wide

Enjoying this article?

Get more just like this, delivered to your inbox.

Keep up to date with the latest analysis, inspiration and learning from the Econsultancy blog with our free Daily Pulse newsletter. Each weekday, you ll receive a hand-picked digest of the latest and greatest articles, as well as snippets of new market data, best practice guides and trends research.