The Consumer Matters is the blog of Leslie Grandy, aka Gearhead Gal.  My passion is creating and delivering compelling products that delight customers through simple and elegant user experience design.

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Entries in F-commerce (1)

Thursday
May172012

Have We Seen the End of Facebook Stores?

This guest post was written by Lior Levin, a marketing consultant, and contributor to The Consumer Matters.

Citing sluggish sales, a number of leading brands such as J.C. Penny, Gamestop, GAP, and Nordstrom have shut down their Facebook stores. Bloomberg News reports that contrary to the optimistic projections for Facebook’s “F-commerce” solutions for social shopping, many brands found that their stores simply did not perform well on Facebook despite generating plenty of likes and buzz.

Is this the end of Facebook stores or just a big bump in the road toward “F-commerce.”

Facebook Specializes in Social, Not Sales?

Perhaps the largest debate among marketing analysts right now is whether Facebook is better for social networking and connecting with friends than selling products.

Sucharita Mulpuru, an analyst at Forrester Research in Cambridge, Massachusetts, shared in the Bloomberg News article, “There was a lot of anticipation that Facebook would turn into a new destination, a store, a place where people would shop… But it was like trying to sell stuff to people while they’re hanging out with their friends at the bar.”

The jury is still out here. While many Facebook users prefer to avoid shopping during their social time online, the user base of Facebook is large enough to consider whether this will always be the case for the majority of users.

Optimizing the Facebook Shopping Experience

Another concern with Facebook stores is that retailers failed to adapt their merchandise for the Facebook browsing experience. For example, some large retailers have put their catalogues on Facebook, like Express , leading to a slower browsing experience. 

If customers can just go to a retailer’s website in order to make a purchase quickly, there’s no longer any incentive to shop on Facebook. In addition, seasoned online shoppers may be used to the browsing experience on a company’s website over learning a new interface on Facebook.

Questions remain, such as whether retailers need to think of products designed especially for sale on Facebook or what number of products is ideal for selling on Facebook?

Are Other Social Networks Better for Online Shopping?

Is it possible that Facebook simply doesn’t have the infrastructure in place to provide the ideal online shopping experience compared to sites like Pinterest? While Pinterest is designed for click-throughs and browsing images of products in use, Facebook specializes more in communication and interaction.  

Maureen Mullen chief researcher at luxury think tank L2 advised brands  to do the following on Facebook: “Fans really want to hear more about products and want to interact with the brand itself… Provide users with content they never would have had access to without the advent of social media, share different perspectives and allow fans to share what they think in real-time.”  This kind of unique product viewing is not what we typically associate with Facebook anymore since it fits the niche of Pinterest perfectly.

When it comes to focusing on a product, it’s tough to beat the clean viewing experience of Pinterest.

Using Facebook to Drive Traffic

Rather than opening Facebook stores, other brands are focusing on using Facebook to drive traffic to their websites in order to close sales on their brand websites. It’s clear that Facebook is an essential online marketing tool, but how brands use their Facebook pages for sales will continue to evolve.

Maureen Mullen shared with Mashable ,“[Burberry is] using the platform to drive traffic at a fraction of the cost of what it would have to pay on Google and other search engines. In addition a significant portion of that traffic and resulting sales is likely incremental.”

Facebook is still an essential tool that links brands with higher sales and greater brand awareness, but brands still aren’t sure about using Facebook directly for sales.

Do Consumers Need More Time

As GAP, J.C. Penny, Nordstrom, and Gamestop rethink their Facebook strategies, it’s possible that these brands invested too much, too soon into Facebook stores. Customers may not have been ready to make the leap from social to shopping. 

The All Facebook blog suggests: “Consumer resistance to shopping on the social network reminds us of how people felt about shopping on the Internet back in the early-to mid-1990s. Once they became more comfortable with the technology and more confident about the security, people began buying things on the web. The same pattern might occur with Facebook commerce.”

While it’s clear that many leading brands have lost money on their Facebook store investments, we’re still in the early days of Facebook stores. It’s still quite possible that consumers will warm up to social shopping or that other brands will create an ideal Facebook shopping experience. Facebook stores aren’t finished, but we are certainly in a period of uncertainty now that the initial euphoria of F-commerce has passed. 

About the author:  Lior Levin is a consultant for a printing company that offers a variety of smartpress options, and who also consults for a neon sign store that provides customized neon signs for businesses and individuals.