Facebook's ubiquitous reach now extends into the social commerce arena
If true, other similarly positioned companies could learn from Fab.com's strategy. Forbes reported that Fab.com may do $100 million in sales this year. And given its meteoric growth during the past few months, it's hard to deny that Facebook hasn't played a role in Fab.com's e-commerce development.
Dislike for f-commerce
Some analysts believe that Facebook might be forcing an e-commerce agenda, simply because the social network has to continuously introduce new capabilities in order to stay competitive. Despite Procter & Gamble and Fab.com's f-commerce initiatives, Jake Wengroff, global director of social media strategy and research at Frost & Sullivan, insists that Facebook developed f-commerce tools like Timeline, which allows companies to create a narrative to attract customers, because it had to. “I don't think it's a successful platform at all from a value perspective,” Wengroff adds. “[Facebook] had to evolve. [Timeline] had to come out. It's no surprise Facebook rolled out e-commerce.”
One serious impediment to f-commerce, Wengroff says, is that large brands have invested so many resources in their e-commerce sites that using Facebook as an intermediary doesn't make sense. “They've just done so much. For them to now have to build something on Facebook, I think they're just tapped out.”
That's partly why startups like Fab.com might have more success with f-commerce than large, established companies, he says. They simply have less to lose and more to gain from the get-go. Facebook is free, but setting up your own e-commerce website isn't.
One important question companies engaged in f-commerce should ask, Wengroff says, is about the true value of the data they collect. For example, even if a company knows its core demographic, it might not be possible to measure what percentage of that demographic is actually active on Facebook. “It's not that the high-end female shopper doesn't use Facebook,” Wengroff adds, “but does she want to shop on Facebook? Probably not.”
“Consumers love Facebook commenting, sharing and ‘liking', but I think they're a little resistant about entering in their credit card numbers on Facebook,” he says. “It's an issue of trust. Shoppers today are savvier than ever. I think they know that Facebook has data [and] they know it sells data.”
A Ponemon Institute and ThreatMetrix September 2011 study showed that 53% of consumers surveyed don't think stores on Facebook are committed to protecting their information, underscoring Wengroff's point. Perhaps a way around this is for f-commerce to include interactions that have a seamless connection back to an e-commerce site or an invitation to buy in-store — as Pantene and Fab.com's strategies do.
On the surface, f-commerce is like any other successful business strategy: Find customers already on Facebook, market to them and build trust and loyalty to maintain or expand upon that relationship.