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David F Carr
David F Carr
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Does E-Commerce On Social Networks Pay Yet?

E-commerce firms search for the right way to retail on social networks, especially Facebook.

When ShopIgniter announced in-stream e-commerce for Facebook a couple of months ago, I was impressed by the technical achievement and the theory behind why it might be useful. However, it bothers me that I still don't know whether it really is useful.

ShopIgniter is one of several specialists in embedding e-commerce experiences inside Facebook, allowing a product catalog or selected promotions to be displayed inside a Facebook app or business page, with a full shopping cart and checkout experience. Ideally, these products also take advantage of the nature of the medium, providing opportunities for consumers to "like" products, share them with their friends, and perhaps get access to special deals as a reward for their evangelism.

What ShopIgniter introduced back in October was tighter integration with the Facebook Wall and the whole mechanics of posting and sharing products. It meant social shoppers could now add to cart and checkout right within the post stream, rather than clicking a link that takes them to a page on another website or even another location within Facebook.

This is similar to the way you can play a video or a song embedded in a friend's feed, and it's potentially a great way for product offers to spread across the social network.

"We're not asking users to do something out of the norm of the social network," said Alan Wizemann, founder and chief product officer. The secret to Facebook commerce, he said, is "creating new experiences around products," rather than creating conventional e-commerce experiences.


ShopIgniter's in-stream e-commerce experience.

One reason I didn't write about this when I took the briefing back in October was that I asked for a customer reference who would vouch for in-stream merchandising being useful, or at least potentially useful, and ShopIgniter never got back to me. I came away annoyed that they walked me through an extensive demo featuring one of the very largest big box retailers, then told me that I shouldn't mention that this company was a customer--and at any rate, this retailer wasn't one of the early users of the in-stream purchasing feature.

So, who is using it? The announcement of the feature included a screen shot of a product promotion embedded within the stream of the Facebook page for Kaenon, a fashion sunglasses brand that is a ShopIgniter customer. However, as far as I can tell, this is a mockup rather than something that has shown up live on Kaenon's Wall.

[ Want more tips on how your business can beef up its social presence? See 5 Things SMBs Should Know About Social Sharing.]

The whole theory about why Facebook commerce should be so powerful is that people will be more likely to buy products they see recommended by their friends, and perhaps this will work even better if they can make the purchase without leaving Facebook. ShopIgniter is trying to further reduce friction by letting you make the purchase without ever leaving the stream. I don't necessarily see the flaw in the logic, but there's room for doubt that it's really happening.

The other interesting conversation I had about Facebook commerce recently was also about Twitter. "Twitter is going to be huge for e-commerce, probably even more so than Facebook," said Christian Taylor, CEO and co-founder of Payvment. That's a surprising statement from the operator of the Facebook Mall, a company that has built its whole shopping experience around a Facebook app. Yet now Payvment is claiming bragging rights to enriching the e-commerce experience for users of the Twitter mobile app, who will now see product images and details displayed along with tweets promoting items from Payvment's merchants.

Twitter doesn't support the embedding of other applications within its service the way Facebook does, so this is not a complete e-commerce experience, but it's still important, Taylor said. When Payvment looked at where customers were coming from, "the number one traffic source for us happened to be Twitter," Taylor said.

In other words, Payvment is now trying to find customers on Twitter and send them to a shopping application on Facebook, while linking the social media identities of the buyers between the two services.

Do I see the potential for Facebook and Twitter commerce? Sure. But I sure would like to hear from anyone who has seen it generate significant sales. I'm dcarr@techweb.com.

Follow David F. Carr on Twitter @davidfcarr. The BrainYard is @thebyard

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Deb Donston-Miller
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Deb Donston-Miller,
User Rank: Apprentice
12/27/2011 | 4:12:16 PM
re: Does E-Commerce On Social Networks Pay Yet?
I think the adoption of e-commerce on any social network will be very slow because there are just too many unknowns with regard to privacy and security. It took a long time for people to feel comfortable with online e-commerce, and that was only after they became trained to look for certain things that would help ensure security (such as HTTPS in the URL). I don't think people have the same kind of confidence in shopping via social networks. These fears may or may not be reasonable, given that many of the principles are the same via a traditional website or a social network, but I think they are there and will inhibit widespread e-commerce on social networks, at least in the near term. With that said, I think we will see the number of purchases made online as a result of a recommendation via Facebook or Twitter increase substantially in the year ahead.

Deb Donston-Miller
Contributing Editor, The BrainYard
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