The following is a post from Kevin Olivieri, TIG Global Social Media Analyst.
As the world’s biggest social network and most popular website, Facebook is constantly looking for ways to make their ever popular product more useful for everyday Internet users. Over the years they’ve added popular features, such as the Wall, photo sharing, chat, groups and games (to mention a few) all as an effort to continuously adapt and attract users and keep them connecting around the world.
Throughout this intensive growth, Facebook became acutely aware of the need to add business elements to the site and did so with their inclusion of advertising, business pages, Places pages, along with the ability to create business centric applications. As Facebook continues to evolve, the next big, buzz worthy step I expect to see them take will appear in the form of e-Commerce transactions that will be made available through the Facebook platform.
Big Players Jump In the Game
Consider the rapid rise of businesses and organizations using Facebook to establish a social media presence. One needs to look no further than the emergence of recent commercial campaigns that have successfully pushed consumers to business Facebook Pages rather than directly to their corporate websites (Ex: PepsiMAX, Carnival, Golden Corral).
These businesses work around the clock to use Facebook for marketing, customer service, and myriad of other organizational purposes in the hopes of positioning their brands effectively and influence customer participation. The site also allows them to simultaneously keep tabs on consumer trends and marketing hot buttons. Now imagine incorporating a quick and efficient method for direct payment from this source, and one can imagine that the possibilities for driving revenue are virtually endless.
Making Social e-Commerce Work
For example, imagine a retailer opening up a virtual storefront, or a hotel offering rooms at discounted rates, or a restaurant participating in a group buying/private sale, all within the confines of their Facebook page. These businesses could take it even one step further and make these services available only after consumers make the effort to “Like” their page – thus incentivizing participation and a sense of community. In a time when word of mouth weighs more heavily than ever for consumers, the implementation of Facebook commerce opens up the most engaging virtual shopping experience in a social setting ever.
Several companies have already begun creating apps that allow for such transactions. Retail mainstay JC Penney recently released a virtual storefront capable of handling product purchases through Facebook. A few months ago, Delta Airlines became the first airline to let users search for and purchase tickets directly through their Facebook application. For businesses looking to ramp up their own Facebook commerce initiatives, companies like Alvenda and Pavyment specialize in customized applications designed specifically to add a storefront for your business right on your Facebook page. Additionally, it’s reported Facebook will soon move towards incorporating iFrames, which will enable companies to import their online stores directly onto their page’s tabs.
Facebook’s Stance on Retail Applications
Facebook says they aren’t trying to get businesses to set up storefronts on their pages, nor are they partnering with software companies to integrate the two. Their official stance on the matter is that they are looking more towards using the “Like” button to drive sales instead of developing storefront applications. Although the above statements point to a relatively hands off approach, I can’t help but feel that Facebook will at some point soon build tools that help facilitate shopping on the site, including analytical tools that would help businesses discover who exactly is buying their products/services.
The Stipulations for Success
The main issues I can see that would hinder adoption and growth are privacy issues. Facebook seems to always be surrounded by privacy controversy when a new site update is announced. And when you’re dealing with highly personal information like credit card accounts, the risks will certainly be pushed to light. Therefore, it’s absolutely critical that companies entering the Facebook Commerce landscape provide the most absolute safety measures to ensure information is kept 100% secure.
Marrying two of the most powerful forces on the Internet – e-commerce and social networking – would provide a huge asset for businesses. With almost 600M people connected and communicating with friends on a daily basis (almost as if Facebook has become a part of life), the possibility of turning Facebook into a revenue generating storefront should leave business owners salivating at the prospects. 68% of consumers say that a Facebook friend referral makes them more likely to buy a product. Combine this statistic with site’s built in sharing features and the Open Graph functionality used for discovering relevant content, and all signs point to Facebook becoming a juggernaut of ecommerce.
Would you buy or sell products directly through Facebook? Do you think Facebook will develop their own storefront system available for all pages? Sound off in the comments section and let us hear your thoughts!
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