F-Commerce: Business Boom or Bust?
Discussions on Facebook's IPO and inability to market successfully have been a topic of discussion for months. Sure, Facebook has a reach of nearly a billion users, but until it can be successfully monetized, is investing in Facebook commerce a boom or a bust?
The real discussion is not about Facebook's IPO or current trading price, but rather whether Facebook is a good vehicle for marketing and, if it is, if businesses understand how to harness a vast pool of potential customers that normally takes years to accumulate.
What It Is
So, what is Facebook commerce, or f-commerce?
"F-commerce denotes the use of Facebook as a channel to monetize social media. It is one facet of a larger genre referred to as social commerce," wrote Paul Chaney, author of the Digital Handshake on Small Biz Survival.
Think of f-commerce as any sale that takes place on Facebook with the help of applications on Facebook business pages. To aid f-commerce, businesses may seek to take out Facebook ads posted on potential customers' pages as a way of driving traffic.
F-commerce is expected to become a US$30 billion industry by 2015, according to analysts at SocialMediaAdd,
So why are businesses hesitating?
Reasons for Holding Off on F-Commerce
Your target audience isn't there.
If your target audience consists of children under the age of 13 who are unable to influence their parents or siblings, stay away from f-commerce. Facebook is available only to those over 13 years of age.
You're a large business marketing many different products traditionally.
We've seen large businesses try and fail to profit from a move to f-commerce. Taking a traditional e-commerce approach, a business is destined to fail selling through Facebook.
Large businesses fail with f-commerce, notes Brian Solis, by using it as "yet another digital catalog for selling products and not as a platform for activating new experiences based on the nature and the psychology of the relationships that define the network."
If online shopping is already convenient, attempting to use traditional marketing methods will be unsuccessful -- and being too quick to pull the plug may add to the failure.
You expect immediate results.
Starting with f-commerce takes time and resources. It requires investment in a Facebook API developer and requires outreach to current and new customers.
It will take a while to grow organically, but Facebook advertising can help it.
Reasons for Giving F-Commerce a Shot
Your demographic is on Facebook.
Let's be honest here. Facebook affords businesses the opportunity to specifically target age groups and geography in a way that traditional marketing can't.
Facebook ads allow you to target by demographic, location, interests, and within a budget that's a fraction of the cost of traditional marketing.
You make content easy to share.
No user wants to become confused with the buying or selling process on your platform. If you are a business that sells directly from your own shop, make it easy for users to share their recent purchases.
This can be as simple as offering a generic Facebook post mentioning your post or offering an incentive for posting. Social plug-ins allow for the Liking of products to be shareable across social networks.
Change your strategy. Sell something worthwhile.
F-commerce is changing the name of the game and selling should change appropriately. Whether you are a large or small business, selling desirable content through Facebook is advisable when you understand your target.
iTunes allows musicians such as Pink to sell MP3s directly through Facebook.
Walmart allows users to search local stores for deals, meal ideas, and support.
Showtime's API for "Dexter" lets fans buy gear from the show.
Tips for Success
Lose the lofty business expectations.
Your f-commerce business will take time to grow. Even if a Facebook giveaway increases Likes on your page, that won't necessarily translate into new sales.
Understand the culture.
Not every e-commerce company should try to use f-commerce, but consider whether yours should. Are most members of your target demographic active on Facebook?
Is F-Commerce Worthwhile?
If you're simply looking for another environment to market your goods, critically consider whether it adds anything to sell through f-commerce. Does it change the user experience?
Be open to change.
This should apply to any type of new marketing, but always be open to see what new opportunities are available. With 800 million active users on Facebook, it's a treasure trove for any business willing to take the risk and dive in.
Create an API that's shareable.
If applicable to your business, make it easy for customers to add your app to their Facebook page and sell merchandise.
Users are more likely to access your Facebook app if there is an incentive, especially if there is an incentive to share using a plug-in.
Ask for feedback.
Ask your customers what's working and what isn't. Asking advice will go farther than you think.
The Big Secret
"The best way to monetize social media is to empower people to promote products to their friends not for brands to spam you on Facebook," wrote Wade Gerten "Online shopping experiences are better when they're social."
At the end of the day, f-commerce needs to remain social. What do you think? Will Facebook commerce be a boom or bust?