At the current time (April 26) Facebook, the most visited website on the internet, is deep into preparations for its expected $100 billion Initial Public Offering (IPO). That may seem like a lot of money, but all the indications are that the public simply can’t get enough of Facebook. To put this into perspective, Facebook wins one in every five internet page views. Even more astoundingly, the average visit lasts 20 minutes. The truth is many people simply don't leave this walled garden, meaning that Facebook really is the internet for millions of people. Benjamin Dyer, CEO of Actinic Software addresses the hype behind businesses selling on Facebook.
Why create an F-commerce store?
For companies it makes complete sense to also be on Facebook, after all that’s where your prospects are can be found, right? There are two reasons businesses need Facebook; one, engagement and the second, data. In plain English it’s all about engaging with potential customers and understanding who they are. However, in an effort to debunk a myth; engagement and data do not equal sales. Facebook as it stands today is not a reliable sales channel.
Now this may seem at odds with everything that we have been lead to believe, but to explain, out of those 20 minutes a day spent on the site, the primary way that visitors use it is to post a status update, catch up on news from friends, or play games. To distil this further, 40 percent of Facebook’s visits come from its mobile site. This means visitors are seeing a stripped down version of the site which (for now at least) excludes all advertising. Visits are primarily socially motivated, the site is about entertainment and communication rather than conducting business.
There are lots of ecommerce systems that will allow F-Commerce, the ability to buy (or sell) using the Facebook platform. However, the reality is that it is simply not a viable sales channel. According to Bloomberg, a large number of major brands including Gap, J.C Penney, and Nordstrom have both opened and closed their Facebook stores within a year.
The major sticking points with selling on Facebook
The major problem is the platform itself, as participants have a totally different mindset from the traditional click and ship thought process. In reality, it’s hard to agree that consumers are ready to accept that the place they go to post and comment on their friend’s lives could also be a store front, it’s just too alien. It can also be said that the actions undertaken by Facebook don’t really help the selling process. While many deride it as a closed network, it really is surprisingly open for companies that want to experiment. However, the result is a boutique feel, which leaves the merchant having to undertake a lot of the work themselves in order gain attention.
Using Facebook to enhance your digital marketing strategy
Having said that, there is one area where Facebook utterly excels as a platform and that is for conducting digital marketing campaigns. Companies including Heinz have captured the imagination of Facebook users with their recent 'Get Well Soup’ campaign. Heinz's idea was simple, it allowed consumers to purchase a can of soup for an unwell friend and ask for it to be dispatched along with an individualised 'get well soon' message. According to Cnet, the results have been impressive. Within four weeks Heinz reported over 2,000 sales, and had a 200 percent uplift in created links. Don't be fooled however, these numbers seem incredibly insignificant when compared with other online sales channels. The campaign was aimed at building brand awareness and increasing page ‘Likes’; 2000 sales in the scope of a multi-national brand like Heinz is a mere drop in the ocean.
The global ecommerce industry is one of epic proportions with nearly $700 billion being spent last year, and there is no doubt that a company like Facebook would like a piece of this pie. However, for the time being at least, the F-commerce experience is more about sharing, and consumers supporting and engaging with brands they like rather than just being relied upon as another online sales channel.