Inching or Sprinting To Social Commerce?
Not long after Facebook was launched in 2004 as a social network, retail industry experts were bantering about whether or not it would ever become an e-commerce platform. Fairly unanimously, most believed it would never happen — with one exception. Founder and CEO, Mark Zuckerberg, believed that eventually, Facebook could be commercialized. However, while Facebook’s influence on purchasing behavior via word-of-mouth is beyond dispute, as well as its growing advertising platform, its attempts at expanding into an e-commerce marketplace (“F-commerce” as it was called), failed early on. Its first foray with 1-800-flowers.com in 2009 was followed by several other retailers in 2011, including Gap, JC Penney and Nordstrom’s, all of which pulled out. At the time, Forrester Research’s Sucharita Mulpuru, said, “… it was like trying to sell stuff to people while they’re hanging out with their friends at the bar.”
Along the way, Facebook Groups were formed (specific sets of people), as well as Facebook Pages (created by businesses, at no cost, to promote their goods and services). Then buy buttons were added to businesses pages to provide users a one-click ability to buy the product featured, as opposed to being clicked through to the product’s website.
Move Over eBay
Now Facebook launched its peer-to-peer (P2P), local selling tool, called Marketplace, on its mobile app in the U.S., UK, Australia and New Zealand. Currently over 450 million people use Facebook Groups, to buy, sell, trade and barter. Postings can be made by anybody in the group for items they want to sell. Now Marketplace will streamline and enhance the process by offering a dedicated venue that will be able to match and update listings based on a Group’s local and personal preferences.
It opens with photos of items listed for sale by people in nearby locations. It also facilitates search for items, categories and prices of particular interest, and can drill down to other details including the name and photo of the sellers and their locations. Once a choice is made, it can either be saved for later or one can send the seller a direct message from Marketplace to make an offer. Facebook does not participate in any way during the transaction, delivery or exchange of the goods.
With Facebook’s billions of global users and its trusted brand name, eBay should be looking over its shoulder, particularly since it has been experiencing decelerating growth over the past few years. In fact, Marketplace could attract and steal buyers and sellers right off of eBay’s platform, and for that matter, from Etsy and other P2P marketplaces as well.
Mark “The Bezos of Social Commerce” Zuckerberg?
Even though social commerce was introduced by Yahoo in 2005, Facebook, with over 1.5 billion active users per month, according to Statista, compared to about 244 million on Amazon, no wonder Zuckerberg was dreaming about how to commercialize it all from day one.
And since shopping has been a more or less social occasion forever, why is it not logical to imagine retailers, brands and service businesses to operate in Facebook’s Groups neighborhoods? Since they have figured out how to blend stealth marketing and advertising communications into these “communities” without offending the social fabric, why is the next step to purchase so unlikely? For those that have cracked the code of communicating with and among these social groups as opposed to talking at or to them, it would seem to me that the next step to facilitating shopping and buying should be a slam-dunk.
If we revisit Sucharita Mulpuru’s comment about commerce in Facebook’s social network and why it failed the first time around, let’s look at it today. Maybe the local Budweiser distributor, who fits the profile of this group of friends, enters the bar and buys a round of beer for all of them. In this scenario, he’s not only blending in, he’s suddenly their new best friend.
And Facebook is going to scale social commerce to an astronomical level, just like Zuckerberg has had his eye on the universe from the get-go.