Chris Morley

f commerce is going the way of the Dodo

A few years ago circa 2010 a new term was coined, f-commerce following on from the successful implementation of eCommerce, several years prior. Combined with the emergence of the phenomenon that is Facebook it seemed a logical step- how could Facebook not be the new frontier for buying and selling? To be honest I never believed in f-commerce and I still don't.

fCommerce is buggered My basis for this people don’t log onto Facebook to buy.

I recall listening to a marketing ‘expert’ in 2010 who said, “Facebook has 500M+ users – how can you not make money from that number?” Pretty easily as it happens – they aren’t there to spend their money. As far as I am concerned, it comes back to a user’s intention, and intention is linked very closely to the outcome. If my intention this weekend to buy a TV – there’s a very good chance I will buy a TV; however if my intention is to garden (and let’s be honest, this is a lie) then I garden. If users go to Facebook to catch up with mates, post photos, comment on posts,  then that is what they are there for – not shopping.

Now don’t get me wrong – I am not saying you can’t make money from Facebook – look at Zynga.  They have sold more than enough virtual sheep to feed a virtual African country. FarmVille is clearly one of the leading companies to make a profit from the social site – and gaming and apps have a few more examples than retailers. It is probably in their intention – games are designed to be fun, engaging and interactive – if you master that then the money follows. Its similar to thinking - we are going to make a video that goes viral – you have probably already failed – you need to make a video with different intentions – and then hope it will go viral.

Retailers and Marketers who go onto Facebook with the mentality of the 2010 marketing expert are in for a negative experience financially. And this is represented by Facebook’s share price – at the opening bell on May 18 – the first day of trading – they opened at $42.05, closing at $38.23 – dropping $3.82 on Day One, for one of biggest share IPO’s in history, not ideal. Analysts will argue that the IPO raised $16billion – and this figure is only bettered by a few massive US companies in terms of success,  however, the general punter is not so ecstatic with Bloomberg estimating that investors may have lost as much as $630million since the stock listed.

At the time of writing this article – Facebook shares are $23.56 which further demonstrates that f-commerce is heading the way of other such innovations. Who remembers Beta video and mini disc? Despite passing more than 1 billion active users in October this year; the site has struggled to show marketers and retailers any return on their investment. Facebook, once touted as a rival for Google, in terms of return for retailers,  is now the great unknown.

This is not to say that having a Facebook presence is not useful – in fact, I would argue it is a necessity. Not so you can build a Scrooge McDuck style money bin – more to enable you to engage and communicate with your customers, learn about them and target them more accurately through different forms of marketing or retail experience. Facebook, if used properly, can give a brand access to copious amounts of personal information – savvy and experienced marketers can then avail themselves of this information in personalized emails, in-store offerings/experience, which can in turn drive some serious new revenue for their business.

Previous engagements with Facebook by retailers and marketers have seen a push to have as many ‘likes’ as possible – one can only imagine how the Friday business lunch discussions have changed from ‘my business has the following investors’ to ‘my business now has over 200,000 likes so there!’. ‘Likes’ aren’t going to pay the Diners Club bill – and businesses are realizing this – which is why we have seen a change in the way retailers are using Facebook – almost making an effort to make their ecommerce site more social – rather than the previous attempts to make a social site an ecommerce one.

Facebook still appears determined to find a way to make itself more profitable – the ‘share’ option is about to be joined by ‘want’ and then ‘buy’ – however the long stated issue is still apparent – intent. Social networks such as Facebook have built up so many users for the purpose of socializing – numerous psychologists have commented upon the way in which the phenomenon of Facebook has altered the way we communicate, and highlighted the pitfalls this may present to future generations. Whilst we may interact differently as a result of Facebook, it isn’t going to alter the way we shop dramatically, if at all.

Last week the employees of Facebook were able to sell their shares as the employee lock up expired. In the lead up to this event Facebook released details of gifting ability – as you see a friend have a birthday – you may gift them an offer, or gift, through Facebook approved vendors. Innovative US retailers Starbucks are already onboard – they would be the first to open an envelope though wouldn’t they? Moves and options like this are going to help stem the flow and bridge the gap for Facebook – but f-commerce is never going to happen. Facebook is never going to be another online mall where users go to shop. Given the vast numbers of shares held by employees it will be interesting to see what happens to the share value over the next few weeks.


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Chris Morley Online Market Experts Chris Morley
Company: Online Market Experts
Position: GM
An online market expert, having been involved in the eCommerce industry since 2007 helping not only big business like Deals Direct, OO, eMitch, Columbus and others but also small businesses to engage and embrace online. i bring passion and enthusiasm to the industry and am always keen to talk shop.

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