February 23, 2012

Why Are Brands Abandoning "F-Commerce"? Companies Struggle To Convert Facebook Fans Into Customers As Several Brands — Including Gap, JC Penney and Gamestop — Have Closed Their Shops In Recent Months

Last year, Facebook opted to allow businesses to set up shop and sell their products directly from their Facebook pages. "F-commerce," as the practice is known, had a positive uptake from lots of household brands keen to cash in on their large Facebook followings. But just a year down the line, things apparently aren't going so well, with reports suggesting that many of the early adopters are throwing in the towel on their F-commerce experience. Gap, JC Penney and Gamestop are just a few that have shut up shop in recent months. According to a report by Bloomberg, video game retailer Gamestop opened its Facebook store last April but lasted just six months due to the inability to convert its 3.5 million-plus Facebook fan base into paying customers. Little over a year ago there were even suggestions that Facebook would be 'the next big thing' in e-commerce, with the potential to challenge the likes of Amazon and PayPal. So what is it that's stopping Facebook's 850 million members from spending? "There was a lot of anticipation that Facebook would turn into a new destination, a store, a place where people would shop," said Sucharita Mulpuru, an analyst at Forrester Research. "But it was like trying to sell stuff to people while they're hanging out with their friends at the bar," he added, Browser Media reports. In addition, the Facebook checkout process is notoriously clunky due to the process taking place via slow-loading Facebook apps. Team this with uninspiring, replicated product catalogs and you're giving users zero incentive to shop via Facebook. It turns out that Facebook is just a social network, not a shop, Browser reports.

It's no coincidence that so many brands are pulling the plug on F-commerce, and it's a decision that completely undermines the expectations initially pinned to the service when it first launched. While it's too early to write off F-commerce for good, recent evidence would suggest that brands are best using social networks for what they offer best — engaging with fans — and letting their websites do the selling, reports Browser Media blogger Matt Batterham.