Over the past year, Nordstrom, Gap, Gamestop, and JC Penny, just to name a few, have made a strategic decision to back out of the storefronts they had implemented on Facebook. Other retailers have joined the list as well, frustrated with the inability to sell on Facebook, and if there isn’t change, others will join in the “F-commerce” abandonment.
It’s too early to tell exactly whether blame should be placed with Facebook or the retailers themselves, but more importantly, there could very well be implications when it comes time for Facebook’s initial public offering of shares. Facebook will be under serious performance pressure to prove to shareholders that it has the ability to grow its impressive revenue base. Facebook based e-commerce storefronts are an example of a perfect opportunity to do just that, however more strategic attention will need to be placed on both Facebook themselves and the retailers to make the experience worthwhile to users.
If we consider Facebook as a whole, it’s built around socialization, not shopping/e-commerce. When comparing Facebook to Google, users are searching for things and it makes sense that consumers will click on ads that are related to their search queries. This is proven with the exceptional success of AdWords. On Facebook, users lack the ability to search for specific products or services, which puts a majority of the weight on brand recognition and familiarity.
It’s important for companies to consider why people are using social media to begin with and what drives online consumer behaviour. This is where companies often miss the boat. From a shareholder perspective, a failure in Facebook based retail could certainly raise questions about a sustainable business model.
One of Facebook’s major issues with retailers on the social network is that there isn’t emphasis on one retailer over another. If we consider the depth that companies go into with site optimization for increased user usability, for conversion improvements, and countless other measureable elements, you’re limiting that optimization on Facebook. And for what? A community element for browsing and shopping? Users will essentially be giving up an optimized buying experience for something sub-optimal in favour of the social dimension. The question is, where’s the balance and incentive for the user? Where’s the value?
Retailers are still struggling to find that balance between creating a buzz about their brand and building loyalty on social media platforms, ultimately converting users into consumers while staying within the platform. The result is that Facebook pages are beginning to feel like blogs.
Facebook commerce is still in the nascent stages and there is absolutely potential for brands who are willing to put in the time to figure out how to optimize design and deliver a user experience that is both engaging and that doesn’t force the consumer into leave Facebook to complete their purchase. The leaders will be those savvy, innovative brands and retailers that see their Facebook presence as something more. These companies will take the necessary steps to leverage their presence in the social space to create a unique, optimized storefront, creating a valuable social commerce experience for users.