News about Facebook’s share price and comScore’s report on Power of Like suggest that getting Facebook-commerce right, and particularly mobile commerce, is proving a challenge for the site. But are Facebook-commerce expectations out of sync with most retailers and the market’s capabilities? This leads to controversial debate where some commentators see enormous growth opportunities, while others see huge effort for no return.
In fact, the problem is in the evolution of communication within the medium, shops on Facebook only work as part of a social media strategy. Most retailers are not sufficiently evolved in their social communication to make them work and most consumers have experienced enough good communication to expect to find easy-to-use f-commerce on Facebook.
Thus F-commerce has become a controversial topic. Expectations and reality do not fit together and protagonists blame the medium not the messages. Consultants Booz & Company predict global social commerce sales will be $30 billion (£18.5 billion) in 2015. But in fact, retail giants like the Gap clothing company, or the department store chain JC Penny and Nordstrom have closed their Facebook shops. A recent study by W3B suggests that only two percent of Facebook users have - purchased through the social network.
“Is f-commerce already dead?” Is the hype already over before it’s really started? On the contrary - a recent report by the Hamilton Institute For Policy Research found that more than four in 10 Millennials (aged 20-33) in the U.S. and the U.K. said they wish there were more opportunities to shop within Facebook, versus 26 per cent of Gen Xers (aged 34-46) and 16 per cent of Boomers (47-66). Nearly half agreed that they spend so much time on Facebook already, they might as well shop there too, compared with a quarter of Gen Xers and 14 per cent of Boomers. Similarly, 48 per cent said they wish the places where they shop had a page where customers could buy products/services directly on Facebook (27 per cent of Gen Xers and 19 per cent of Boomers said the same).
The failure therefore is caused by misunderstandings and it is in part, a structural communication problem:
1. Expectations versus Company Claims
While social media marketing managers dream of loyal customers who suck up new products and passes it on to 140 friends. Fans are actually only on Facebook for a virtual beer or to share holiday photos.
It should not surprise then that current responses are limited to “quick wins” such as deals. But brands can be successful if they enter a genuine two-way conversation with fans.
2. Commerce versus Culture
Sticking to the image of Facebook as a bar - people do not want a sales pitch in a bar. However, business and deals are done in bars. It’s just a different type of communication and sell. Not a hard sell but gaining trust, comparison of needs and benefits in a more relaxed way. Recommendations in the bar, or on Facebook, tend to be initiated by the buyer not the seller. Therefore retailers need to provide their customers with something they want to be seen with, something they have had a hand in creating. Turn them into brand champions and enable the conversation to start.
3. Theory versus Payment Practice
In the end it’s all about money. But: Facebook credits are good so far, perhaps for virtual goods and micro-payment. But does the average consumer want another currency? Other checkouts are not integrated to Facebook registration and so further logins are necessary. This conversion killer leaves consumers going out of Facebook to shop.
What is there at the end?
You might be discouraged at this point but hang on and stay tuned. The conditions are right for f-commerce:
- Facebook still has a very high, loyal and active user base. If you have customers it is very likely that your customers are there. It is also possible that they react to pure advertisement differently than to real content.
- More and more people are now buying from the living room. For many of them Facebook will be the first place, or one of the most important starting points.
- And, yes, many people talk about brands, recommend products, share shopping experiences on Facebook.
- Some retailers are doing well on Facebook but they have adapted to the environment and offer products that fit with two-way communication.
- Communication is the key. Every medium from newspapers to TV and from websites to social media has had to develop the right communication styles. If you look at a 1950s advert it looks very naive compared to modern advertising or sales language, but this is because language has evolved. In reality marketers and e-commerce companies have had only a couple of years to develop the right communications and products.
When F-commerce works in practice, it is due to the relevance of the product and communication to the user’s current interest. F-commerce is more than the pure sale: The point is to activate fans, include them and create a presence on Facebook through their news stream. Store offers and news stream have to be combined editorially. To do this properly brands need ever-changing products and communication to maintain relevance.
F-commerce functions according to the laws of Facebook users, not to those of traditional stores. Just being there is not enough. You need a lot of staying power, relevant good ideas and to develop the right language. It is all about the fast, action-oriented relevant sales.
Expectations are high for Facebook’s ability to drive revenue through commerce but for many retailers looking to sell via Facebook still have some catching-up to do. Simplicity, communication and functionality will be key to the success of Facebook’s commerce strategy.