Friending e-commerce

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Facebook's ubiquitous reach now extends into the social commerce arena
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.

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