Facebook has taken a giant step into eCommerce by partnering with seven large retailers, including Victoria's Secret and department store Neiman Marcus, and introducing new "want", "collect", or "like" buttons so users can create their own digital catalogues.
Although the plans for such a system were unveiled earlier this year when a lone developer discovered a piece of code within Facebook's framework, the official announcement of the partnership establishes Facebook as an emerging eCommerce player.
Given the success of the daily deals market, Telsyte senior research manager Sam Yip told SmartCompany this morning it makes sense Facebook would move into this area.
"If you look at every single eCommerce success story, it's been a potent combination of eCommerce...and the group of people that activated a deal."
"We're now seeing that eCommerce and social are combining in order to activate sales," he says.
Facebook said in a statement overnight it would be partnering with seven retailers: Pottery Barn, Victoria's Secret, Fab.com, Neiman Marcus, Michael Kors, Smith Optics and Wayfair.
The system works like a digital catalogue. Users can "want", "collect" or "like" products offered by these retailers.
Whenever a new company posts a "collection" of products, users can click on any of these buttons, or click to buy the product through the company's website.
Facebook doesn't charge a fee for the traffic.
The other part of this system is designed to create wish-lists. Users can click "want" and then place that in their own "collection", and then provide a reason for why they want that particular item. Once a user does this, the information shows up in their friends' news feeds.
The entire system essentially works as a scrapbook collection – and is extremely similar to the way social network Pinterest operates.
The collections system is a natural evolution of Facebook's gradual tip-toe into eCommerce. In the past few weeks it started allowing users to send small, physical gifts to each other. Last year, it also debuted the deals system where companies could offer incentives through their own pages.
And eventually, Yip says, it would make sense for Facebook to expand this to all business – but he also warns guidelines are needed for how businesses approach it.
"I think it's in the back of everyone's minds so far, asking how far can this go? Will Facebook actually put a wall around it, so to speak."
"There is a potential here for the system to go a bit off the rails if it's not closely monitored, and I think they're doing the right thing with just testing with larger brands. I don't think they're going to go all out with this thing yet."
Once the formula is down pat, Yip says "every eCommerce site knows that if they get the social aspect up and running, they'll get sales".
"The companies that offer these products need to offer good deals and something people want."
Facebook has been searching for new ways to raise revenue over the past few years, and its falling share price has exacerbated its problems. Mark Zuckerberg said recently the company's focus is on mobile for raising money, as most users access the site through a mobile device.