The hype around social commerce continues to mount as brands look for additional ways to drive sales. And, as with most things social media, the phrase “social commerce” is being tossed about as a generic, interchangeable buzzword.
I like the fact that the Altimeter Group put a stake in the ground saying social commerce is not a subset of e-commerce and, instead, defines it more broadly as, “The use of social strategies to anticipate, personalize and energize the shopping experience.”
I would go so far as to say that the notion of “social commerce” has been around for over 15 years with the inclusion of customer ratings & reviews thanks to pioneering e-commerce sites like Amazon.com and eBay.
Inevitably, however, as soundbites like the fact that “people spend over 700 billion minutes per month on Facebook,” reach the c-suite, there’s an understandable, yet gut reaction, that the biggest un-seized opportunity is to do e-commerce (or “f-commerce” as it’s come to be known) on Facebook itself.
The Rise of the Facebook Storefront
There are 2 main ways to implement a branded storefront on Facebook.
1. Converged "E" & "F-Commerce"
Brands like Best Buy, Old Navy, and WWE enable Facebook users to browse and add items to their shopping cart from within their page but the transaction fulfillment happens as a redirect to the brand’s main e-commerce website.
Best Buy was one of the first retailers to put its product catalog on Facebook.
The NBA further incents purchases on Facebook by enabling users to earn Facebook Credits for use in a growing number of Facebook applications (mostly, at the moment, social games).
And with this, of course, are a growing number of back-end providers that make setting up a Facebook storefront a little easier.
Is this worth a brand’s investment?
The facts on Facebook user behavior don’t exactly favor this tactic.
- Only 10-12% of a people return to a brand page after liking it
- The majority of Facebook interactions happen within one’s newsfeed
And then of course there’s the “mobile factor.” There are over 250 million active Facebook mobile users (who are twice as active on the site vs. non-mobile users). Yet, today, one can not access custom tabs from either the Facebook mobile web site or downloadable smartphone app. No access to tabs means no access to a brand’s Facebook storefront.
There is little-to-no public data on the success of actual sales from Facebook storefronts. In fact, Forrester reports that brands have experienced low direct sales. However, Facebook IS and should be an important part of a brand’s social commerce strategy -- just not, necessarily, as an online storefront.
There is an alternative.
The brands that have reported “Facebook commerce success” prove the value of Facebook sharing.
- Ticketmaster says each share of an event to Facebook equates to $5.30 in sales.
- Eventbrite reports an event shared on Facebook generates $2.52 in ticket sales.
- A report from JP Morgan cites Facebook traffic to Amazon grew 328% in 2010.
- Visitors from American Eagle’s ecommerce site coming from Facebook spent 58% more than those referred elsewhere.
One might, then, conclude that investing less in setting up a Facebook storefront and investing more in activating Facebook sharing on key customer touch points is a much better brand payoff.
There are many cases of how embedding the like button into an existing website is driving results including Tea Collection, ABC News, Urban Outfitters, and Levis. And Facebook recently reported that media sites that have implemented the like button average in excess of 300% increased referral traffic from Facebook.
All of this isn’t to say that’s wrong for a brand to implement a direct Facebook storefront on its page but, instead, to encourage marketing decision makers to carefully assess the pros & cons (and priorities) of its investment before doing so.
It’s not all about Facebook.
Leveraging Facebook is not a social commerce strategy by itself. Brands should first reaffirm their existing e-commerce strategy and reinforce it with proven social media tactics which might include implementing ratings & reviews and embedding share opportunities at “high propensity” user experience points.
After doing this, a brand can start to turn some of its attention & resources to “testing and learning” from (relatively) newer, emerging, and/or niche platforms/tactics likeGroupon NOW, Foursquare, Shopkick, etc.
And, of course, the “Holy Grail” of social commerce should be cross-channel integration where a brand simply has a “commerce strategy” period. And one that converges in-store, web, mobile, and social media as a holistic shopping experience.