Facebook Commerce Holds Promise for Retailers

Social networks don’t account for much ecommerce yet, but heavy Facebook users see it as a one-stop shop

Social media and ecommerce have evolved since 1-800-FLOWERS launched the first Facebook storefront in July 2009. Internet users have become more comfortable with online buying on Facebook as they spend more time on the site.

“It is not surprising that shopping and socializing—activities that complement each other in the real world—are beginning to converge online as well,” said Krista Garcia, eMarketer analyst and author of the new report, “Facebook Commerce: Reaching Shoppers Where They Socialize.” “As social media, and Facebook in particular, plays a larger role in consumers’ lives, people are becoming accustomed to performing routine tasks like reading news, watching videos and listening to music, as well as discovering products and shopping, all while staying logged in to a single site. Instead of compartmentalizing daily routines, social media users are treating Facebook as a one-stop platform.”

Retailers are still in the early stages of using social media as a sales vehicle, but the channel is poised for growth. Booz & Company estimated that $1 billion in goods would be sold through social media in the US in 2011. That figure is expected to triple in 2012 and reach $14 billion by 2015.

While social commerce still represents a tiny percentage of overall retail sales, and Facebook is just one social site, that site is the clear leader and already offers retailers a variety of options for converting users into consumers. Some of those consumers are warming to the idea of buying products and services while on the site.

In a Q4 2011 Oracle survey of North American internet users, nearly one in five respondents said they would buy through Facebook or had already done so, while 15% were not aware they had the option. Approximately a third said they would never purchase products via Facebook, however.

“Facebook’s role in ecommerce is currently in flux,” said Garcia. “Brands are beginning to realize its capabilities, while users are growing accustomed to mingling with companies online and sharing shopping activities with friends. Even though social media is still more of a marketing tool than a sales vehicle, Facebook’s influence on shopping behavior extends beyond triggering conversions on the spot.”

Source: emarketer.com