First, ecommerce on Facebook was billed as the next big thing. Then it was judged a disaster. The reality is that Facebook Commerce can be very powerful---if it’s executed correctly.
F-Commerce (as it is called by those who apparently don’t associate F with another word) now delivers significant sales for smaller companies. For 40,000 businesses globally that sell on both the social network and their website, Facebook sales increased from 15% to 22% of total revenue between 2011 and Q2 2012. 37% of companies that sell on Facebook say it is their only channel.
At the same time, big retailers, including Nordstrom, JC Penney, and GameStop, did short-lived experiments with F-Commerce and quickly ended them.
Why are some brands succeeding while others fail?
It is a result of the factor that makes Facebook so compelling to consumers: genuine social connection. Retailers that are authentic, build community, establish trust, and then sell their products are flourishing. These companies engage like a friend in the social stream, instead of trying to use Facebook like a more traditional ecommerce channel.
Companies that jump right to making the sale are floundering. Consumers are turned off by a hard sell or traditional etailing experience in the midst of their online social life.
We should think about...
Should we experiment with Facebook Commerce?
Do we have the patience and commitment necessary to effectively build sales on Facebook?
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Sources: eMarketer 2012, Marketing Week 2012, New York Times 2012, Venture Beat 2012
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