The business of buying social
It shouldn’t be a surprise to anyone that the social juggernaut of our time decided to move into eCommerce.
Facebook said earlier this week it would partner up with some retailers, including Victoria’s Secret and Fab.com, to start its online commerce program. Basically, people can press the “want” button on Facebook, share that information with their friends, and then actually buy the products after being directed to the retailer’s website.
It’s no big revelation. Earlier this year a developer unveiled a piece of code suggesting Facebook would be doing exactly this, and analysts have seen it coming from a mile away.
(Also, as an aside, it takes more than a few hints from Pinterest, which should be a nice validation for the “other” social network.)
Of course, the move doesn’t just represent an attempt on Facebook’s part to boost its revenue and arrest a falling share price. It also signals a change in how businesses should think about social commerce.
Last week, Forrester released some research showing only 1% of online sales could be attributed to social media.
That’s a very low number. Now, it excludes small business, which would probably see a higher amount of sales, and it also excluded some important variables. But 1% is still a very low number.
Local expert Sam Yip, from research house Telsyte, made a point that contradicted the survey – social networking leads to sales, but not necessarily in a direct way. It builds brand awareness that eventually feeds its way through to your bottom line.
It’s an excellent point, but the main thought here is that social networking doesn’t necessarily convert sales in a direct way.
Facebook’s decision may change that. If you can create a system where people buy products through social networking, then it will lead to more sales, depending on your strategy.
Right now, Facebook’s program is restricted to a few retailers, and it won’t be opening up to small business any time soon, but it makes a key point – managing your ROI on social media is something that will only become more important, not less.
How you do that is up to you, but if you’ve built a prominent social media presence, then you need to start experimenting with sales. Using social media to refer certain products, or offer discounts, isn’t a bad idea if you can determine just how much traffic you’re getting through your Facebook or Twitter presence.
Even asking a question like, “How did you find this product?” at the end of a transaction can give you some key insight.
Facebook’s announcement doesn’t mean much for SMEs – at least, not right now. But it does show that social commerce is going to transform business and there’s no reason why you shouldn’t get a head-start.
You can follow Patrick Stafford on Twitter @pdstafford.