In an attempt to monetize from their large fan base, retailers set up their Facebook Stores for the first time last year. However, many of those shops are shutting down. According to a Bloomberg report, Gap, J.C. Penney, Nordstrom, and GameStop opened up their shop on the social network giant in 2011. Unfortunately, they all closed it on the same year.
Ashley Sheetz, GameStop’s VP for marketing and strategy said:
“We just didn’t get the return on investment we needed from the Facebook market, so we shut it down pretty quickly. For us, it’s been a way to communicate with customers on deals, not a place to sell.”
Facebook: Just a Vehicle, Not a Destination
The main reason why retailers shut their Facebook Stores down is because they thought of the social network as a revenue driver. According to Forrester Research analyst Sucharita Mulpuru:
“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.”
Nevertheless, it’s still not the end for F-commerce. In fact, none of this proves that social media don’t have the potential to drive sales. It’s just some retailers were unable to properly harness the power of this online channel.
Oftentimes, retailers set up their Facebook Stores, import their online catalog, and make them available for purchase via apps. It’s almost similar to online shopping on their website, but with two differences: One, shoppers can complete their whole browsing and checkout experience without leaving Facebook. Two, the apps tend to work slowly.
Simply put, buyers don’t get much incentive when purchasing on Facebook. On the other hand, retailers only offer a spur in small numbers. For example, offering discount deals on an item or two only.
It’s a Social Network, Not an Online Shop
Another reason why Facebook can’t meet retailers’ expected ROI is because of its infrastructure. As said by Mulpuru, spending time on the social network is like mingling with your friends in a bar. As of the moment, the social network giant is not build for ecommerce. However, it definitely drives significant traffic to websites. Director of Research and Advisory Services at L2 Maureen Mullen pointed out at Burberry as an example:
“[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.”
This only means that it’s premature to consider that F-commerce is dead. It just that Facebook cannot cater to online merchandising as of this moment.