July 15, 2011 by Jeff Ente 18
The Buzzword Breakdown Series is supported by The Network, Cisco’s technology news site. The Network features technology news, trends and information on video, collaboration, core networks, mobility, security, data, Cisco culture and social media.
Facebook’s gravitational pull of 750 million users is enough to hold digital marketers spellbound. Once they get past the sheer size, they find that Facebook also offers unique and nuanced selling opportunities amidst difficult obstacles.
First off, Facebook users have better things to be doing. The average Facebook user is connected to 130 Friends and 80 interest groups and makes his or her preferences known through rich profiles and by posting 90 pieces of content per month. Facebook users spend 700 billion minutes per month in an active, relaxed environment where word-of-mouth is built into every turn. The traffic, of course, also matters. Compete found that large brands like Coca-Cola are getting about 11% of their unique visits through Facebook Pages.
Selling on or through Facebook now has a name: F-commerce. As with most aspects of social media, it does not yet live up to the potential that many foresee and it has no problem finding both strong advocates and cynical detractors. In this post, we’ll break down the ins and outs of this digital buzzword. Let us know what questions you have about F-commerce in the comments below.
Four Types of F-Commerce
1. Facebook-Facilitated On-Site Selling:
Brands can bring the Facebook experience to their websites, tapping users’ connections and interests to support the purchasing process. The simplest examples involve using social plugins — short code snippets that ping Facebook’s network for information about the user visiting the brand’s site. The Like Button is the most common plugin and is usually regarded as a content sharing device, but when it is used in conjunction with a product page it can provide peer support by displaying the names and profile images of people who have Liked the product — most appealing for brands is the fact that it also highlights any of the user’s Facebook friends who have Liked the product.
A more sophisticated approach uses Facebook’s Open Graph API to retrieve the Likes and interests of the user, as well as those of his or her friends. There is a permission screen involved and every friend’s privacy settings are individually respected.
For the past few months Amazon.com has been offering a “Tap into Your Friends” option (still labeled Beta). After the permission screen, the user is taken to an Amazon page showing the upcoming birthdays of Facebook Friends and their Amazon Wish List if they have one. Amazon uses a user’s friends’ profile data, which often includes favorite books and music, to make gift suggestions.
2. Facebook-Initiated Selling:
Business accounts can set up a storefront for free on their Facebook Pages, and many thousands have already done so. The vast majority start the shopping process at Facebook.com but then jump to their own ecommerce pages at some point. Lady Gaga’s Facebook store is an example of a store that takes users on a rather abrupt transition. Users can browse products on her Facebook Page, but any click takes them to the product page at bravadousa.com, a licensed merchandise marketer and fulfillment service. The Facebook branding is gone, and the look and feel changes completely. A new window opens which would make any Facebook multitasking (e.g., chat) cumbersome. Apparently, a Page with over 30 million Likes can get away with this — Justin Bieber has the exact same arrangement.
Best Buy keeps shoppers in the Facebook environment a bit longer and takes advantage of the social features while they are there. Its store app isn’t labeled “Shop,” it is “Shop + Share.” Users can search or browse for products, and when they find something that interests them, they have two options: “Ask Friends” or “Shop Now.” “Ask Friends” leads to a Wall post asking about the product. Interestingly, Best Buy currently makes “Ask Friends” much more noticeable than “Shop Now,” which takes the user to the product page at BestBuy.com for the shopping cart and checkout process.
3. Complete Selling through Facebook:
1-800-Flowers has pioneered a selling process that never takes the user away from Facebook.com. Shoppers can select products, options, see delivery dates and even include a personal message without interrupting their Facebook experience. 1-800-Flowers does not take full advantage of the social environment, though, as it doesn’t provide an easy way to ask a relative what Mom’s favorite flowers are or what her zip code is, for example.
Delta Airlines has built a complete ticketing system into its Facebook Page, and while it allows the user to promote Delta by posting a general message on his or her Wall, it doesn’t do much to help the user share details with Friends involved in the trip, something that a Send Button could do nicely.
4. iFrames vs. Facebook Apps:
There are two ways of displaying F-commerce Pages on Facebook.com, each with its pluses and minuses. In February 2011, Facebook adopted iFrames as the method that businesses use to supply custom content to their Pages. In the simplest terms, iFrames allow a business to create and host its own content and to display it in the 520-pixel middle column of a Facebook Page.
Lady Gaga, Justin Bieber and even Best Buy, present their F-commerce pages through an iFrame. The advantage is simplicity, since businesses can create and maintain the content on their own terms — iFrames tend to offer the most seamless experiences for consumers. 1-800-Flowers and Delta do their selling via Facebook apps. The primary advantage of going to an app is real estate. iFrame content is restricted to the 520 pixel-wide middle Page column, while an app can control the left most 760 pixels — a 46% increase in visible selling space. The disadvantage of apps is that they are more difficult to maintain and they may stress smaller budgets within businesses lacking Facebook development expertise.
F-Commerce Developers Emerge as a Resource
The list of software developers offering F-commerce products is growing. Many come from traditional ecommerce, offering Facebook as an extension for their clients. SortPrice, for example, powers the Dallas Mavericks‘s Facebook store, and Usablenet, which powers JCPenney‘s Facebook store. Another popular application for adding Facebook to an existing ecommerce program is Storefront Social, which Borders uses.
A popular developer that seems to be emphasizing F-Commerce is 8thBridge, responsible for 1-800-Flowers, as well as Delta. And the popular Payvment app allows clients to become part of a Facebook shopping mall with a connected shopping cart.
The Future of F-Commerce
There are many more questions than there are answers about the long term future of F-commerce, which is still in its infancy and barely survived its birth. In 2007, Facebook tried Project Beacon, which collected ecommerce activity on third party sites and announced a user’s purchases on his or her friends’ news feed. Facebook quickly withdrew from that privacy nightmare but its dismal reputation for freely dispersing user data still haunts F-commerce. Many Facebook users have become so accustomed to Facebook’s aggressive data sharing policies that they automatically assume the worst. A recent study from JWT found the percentage of people worried about Facebook privacy and security to be in the 75% range.
Experienced ecommerce managers also see problems with Facebook.com itself. “The user experience is less-than-optimal with slow page loads and smaller page size due to Facebook’s advertising and navigation. I don’t see why customers would bother shopping through Facebook when a faster and better experience is only a browser tab away,” notes Linda Bustos, director of ecommerce research at Elastic Path Software. Facebook advertising is certainly an issue. No matter how you structure your F-commerce store, the user will still be served targeted Facebook ads during the buying process.
Many web marketers question the social nature of shopping itself, and there is considerable opinion that people visit Facebook to catch up with their Friends and not to be sold products. The good news on that front, from the JWT study, is that 48% of millennials (aged 20-33) would like to see the places where they shop give them the ability to buy directly on Facebook.
The best reason for businesses to take a deep breath before investing in a F-commerce is Facebook itself, which currently benefits from F-commerce primarily through the sale of ads promoting it. They’d obviously like a better cut and nobody is quite sure how they would do it. Facebook Credits could somehow be expanded to become the currency for F-commerce. Credits for gaming and virtual goods earn Facebook a 30% commission — F-commerce Credits would probably be in the 5% range.
There is no shortage of opinions regarding the future of selling on Facebook, but one overwhelming motivation — it is where the customers are, and they should be able to buy wherever and whenever they like.