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Forrester Says Facebook and eCommerce Don’t Mix




Forrester Research just released a new report called “Will Facebook Ever Drive eCommerce?” and the folks at the Wall Street Journal have given us a sneak peek.

The report basically states that right now Facebook is not at all effective for driving eCommerce sales.

The study found that the average Facebook metrics are a 1% click-through rate and a 2% conversion rate. E-mail marketing, by comparison, has an 11% click-through rate and a 4% average conversion rate.

The reason for this is obvious. People don’t go to Facebook to shop. They primarily go to catch up with friends or play games. Forrester Research analyst Sucharita Mulpuru acknowledges that people will go to a Facebook brand page and “like” it in order to get a coupon, but that’s a fleeting interest that may have no impact on future sales (except, I suppose the sale connected to the one-time coupon use.)

Mulpuru makes another interesting point that never occurred to me.

“When retailers put like buttons on their product-detail pages, are they really thinking? Your competitors can see what products are more liked than others. Are you exposing your sales information? So why would expose this information?”

Is that really a concern? I don’t deal in product sales, so perhaps it’s a bigger issue than I imagine.

The report does state that companies who sell digital goods are better suited to Facebook eCommerce but where does that leave everyone else?

Many people, and Facebook execs, would like you to believe that this slow rise in eCommerce is simply due to the newness of it all. If more businesses sell items on Facebook, then more people will think of Facebook as a place to shop. Really?

I’m with Forrester on this one. I have a hard time seeing myself shopping via Facebook. Forget Facebook coming to mind when I want to buy a DVD or a pair of shoes. It’s a “social network.” I might go there to ask my friends what they think about a brand before I buy and I might even check out that brand’s page in hopes of finding a coupon, but that’s as far as I go.

On the other hand, I’m noticing a disturbing trend whereby small companies force me to visit their Facebook page in order to get the information I need before buying. Some of this comes from Google searches, some are links from blogs where a product was mentioned, but I don’t like it. Why are people driving traffic to their Facebook pages instead of their websites? Oh, I digress.

Will Facebook become a top player in the world of eCommerce. Forrester and I say no. What do you say?

  • http://www.genuineinternetmarketing.com Shane Eubanks

    The issue is that most companies don’t know how to utilize facebook….it’s not necessarily that people don’t go there to shop.

    Here’s the thing…facebook is made up of people…those people buy things they want. Period. If things they want happen to appear in facebook, then that’s where they’ll buy it…IF they want it.

    Case in point is a lot of the children’s clothing businesses on facebook such as http://www.facebook.com/CutieClothesline . Again, facebook has a LOT of moms…that love to dress their kids up in unique clothes that can be bought for less than in retail stores. So what do the smart business owners do? Take their product TO the people that buy them and create a supply & demand squeeze that causes consumers to snap the products up whenever they are available by only making the products available for about 30 minutes once a week. Simple and extremely effective.

    And what do the buyers do? Dress their kids up in those clothes, take their pic, post the pics to FACEBOOK and tell all their friends where the cute clothes came from….which has pushed Cutie Clothesline to over 11,000 fans (potential customers) with very little marketing.

    There are a LOT of people succeeding by selling on facebook…and the people who are succeeding aren’t spilling their secret sauce to companies such as Forrester.

    • Josh

      Nice selfish plug my man…

      • http://www.genuineinternetmarketing.com Shane Eubanks

        There’s a difference between a plug and a case study that’s relevant to an article especially when the target audience of Cutie Clothesline is not exactly the readers of Marketing Pilgrim…plus, the link isn’t even active.

        I’m not trying sell anything or even send anyone anywhere…just proving a point.

  • http://xhibitswebdesign.com souleye

    dissolve facebook. I don’t believe in social networks. it’s so artificial. you take unsocial people and you tell them ‘this is a social network’. what is nicer than shaking a human being’s hand and having a nice conversation. I see very little positives in the impact of technology use with regard to social. friday 10pm, dupont circle metro station, which is one of the busiest in washington, dc, everybody’s like a zombie riveted on a screen. wonder if you’re looking at human being. they ignore all the social network they have around them, to go online looking for social. c’mon. as people are riveted on their screen at the exclusion of everything else, on facebook, they will interact with their friends and ignore everything else.

  • http://xhibitswebdesign.com souleye

    take this article for instance. 128 tweet, 1 facebook like. that alone speaks volumes about the mindset of people on facebook. mindlessness-set that is.

    • http://www.bizlaunchbox.com Julian Lockhart

      This is not what is influencing the high amount of tweets. There are millions of users (and bots) trolling for good headlines that they can tweet so that they can expand their reach. Most of them don’t read the articles. BTW – You know you have a good article when you have tweets and comments. If you have lots of tweets and no comments then all you have is a good headline.

  • http://www.XposeYourBrand.com Falisha

    I can’t say one way or another, I do however see a lot of stores popping up on Facebook, mine included. I’m testing the market now, but no sales as of yet and my store has been up 3 weeks.
    http://www.Facebook.com/XposeYourBrand. I will see what happens, it’s not costing me anything and for some this is the best way to get their products out without breaking the bank. I think FREE is great!

    • Cynthia Boris

      The fact that it doesn’t cost you anything to run certainly helps but I can imagine that if stores catch on, Facebook will want a piece of the pie. Then what?

  • http://copyclique.com/category/blog Viqi

    Revealing report & good write-up about it. I’m not big on Facebook. In fact, I’m involved with it in a “kicking and screaming” sort of way. The factoid your post shares about FB being advantageous for downloads is GREAT news — gives me a reason to keep spending my time with it.

    On the other hand, I truly enjoy interacting on Twitter! It’s utter simplicity & quick-use manner suits me better. There seems to be evidence that some retailers do well with promotions on Twitter.

    I can’t say that I’ve ever secured clients from either of these. When all is said and done, I’m probably committed to them primarily for the backlink benefits. :)

  • Rossi

    I think it’s a little simplistic to claim that simply because people are there, they buy. There are all kinds of proven statistics around environment, time of product consideration, among many many others that affect someone’s propensity to browse and or buy. I think Facebook is a huge roadblock to this, and that’s why I think this study has a lot of merit.

    Facebook has a lot of negatives to get over, including demonstrated low brand trust, negative publicity over privacy–things that tend to keep many from actually buying off the page. I’d also argue that Facebook’s design has and continues to be its own worse enemy: Constant changes to the design and layout with very little consistency of “pages” where one company designs a disruptive jarring experience, another hides their store behind a “tab” and yet another just wants to talk about itself all day in yet one more insipid “news” stream. Study after study shows that internet users and ecommerce participants to react to storefronts online that fit their expectations. Facebook has allowed some brands to really “own” this through some opening up of their markup language and API, but at the end of the day, you’re still stuck with a lacking design from Facebook. This does matter.

    If I’m a consumer, do I buy? Where? Do I enter my credit card here? Where is this button going to take me? Why is this asking me to authorize it to have access to my information, etc etc?

    These are ENORMOUS stumbling blocks. Good luck with your store, but I will posit that while Facebook can be an important and meaningful communication and pre and post sales/loyalty channel, it’s not a shopping experience for most–yet.

    • Cynthia Boris

      I think you’re right on with the brand trust and privacy issues. I believe that’s one of the biggest problems they’ll have to overcome. Even if it’s as safe as buying from any other website, it doesn’t matter. It’s what people believe is true, not what is true.

  • http://dukeo.com Dukeo

    I also agree with Forrester. The main problem with Facebook is that people are not in buy-mode when they are browsing it.

  • http://joshcorbelli.com Joshua Corbelli

    I hate to say it, but I think e-commerce will eventually play a role in Facebook. Maybe as a separate community or a section dedicated specifically to the market, but with roughly 22% of all time online dedicated to checking social media sites (primarily Facebook) it would make sense for them to want to configure a way to harness that traffic. That’s where I see a bit of the reinvention of destination – it took a while for websites to catch on as an online destination, but now they are the go-to customer referral. Do you think we’re experiencing something similar with Facebook?

    • http://www.genuineinternetmarketing.com Shane Eubanks

      Great point, Joshua, mentioning the customer referral and facebook’s growing role in that. When you consider marketing tactics such as “social proof”, then facebook absolutely will (and already does) have an influence on consumers’ buying decisions.

      Here’s a what if…and a huge theoretical one at that…

      Imagine if facebook had inventory or a vast supplier network such as amazon….now imagine if all facebook users were basically affiliates (which would most likely earn facebook credits for sales and leads). All of a sudden, you have 600+ million potential “salespeople” each with a trusted network of potential customers.

      The potential of that is mind-blowing.

      • Cynthia Boris

        Now, this is something I’d get behind. If I could get credits for “selling” through my Facebook, I’d do it.

      • http://www.eahoy.com Pat

        Your idea is similar to a large part of our business model at eahoy. Facebook also has the money and influence to do exactly what you say, and I believe they will, for the most part, find one or more ways to do so.

      • http://www.commercesocial.com Ariel Wada

        See below! ;)

        Thanks all.

        Ariel

  • http://www.frrugal.com daily deal san diego

    Forrester meet Groupon.

    Forrester [insert] foot in mouth.

  • http://www.commercesocial.com Ariel Wada

    Good article, good feedback.

    F-commerce, MySpace commerce, Ning commerce, or setting up stores in any of our popular social networks today (74 mentioned in this article, all w/ over 1M users each: http://www.practicalecommerce.com/articles/2701-Beyond-Facebook-74-Popular-Social-Networks-Worldwide), is NOT going to generate sales that will live up to the market hype.

    For the most part, social members are NOT on socnets to shop, they are there to socialize. Placing a social store inside a socnet or social property is only the first step for effective social commerce. CommerceSocial not only provides the social stores (instant deployment, customizable, free-to-use social stores for merchants AND any fan or social member), we also provide the tools needed for extending sales opportunities throughout the entire Web through shareable commerce tools merchants can utilize, such as our merchant-published viral commerce videos that allow any seller to promote and make available for immediate sale any product(s) from INSIDE their viral video. And, ALL our stores and shareable tools allow for *instant purchasing* through the app itself, no matter what FAcebook Page, Wall/newsfeed, social network page/profile, or blog they are being viewed on.

    This article also details this same subject, a worthwhile read. CommerceSocial provided an in-depth comment as a response (5th comment down):
    http://www.practicalecommerce.com/articles/2527-Notable-Views-Adgregate-CEO-Rebuts-Criticisms-of-Retailing-on-Facebook

    Thanks again for the article and comments. Good stuff.

    (Not sure if I’ll get an email on any responses, if not I won’t be replying to any questions/arguments.)

    Ariel Wada
    CEO, CommerceSocial

  • http://www.commercesocial.com Ariel Wada

    * On the affiliate / social sales force side *

    Forgot to mention, as an option CommerceSocial let’s all sellers assign affiliate-like payout rates on a product level so that *IF* social members and fans want to share and earn $ (our system will also allow the social member to route a % of their $ to a charity/cause of choice), they may do so.

    Thanks for the share space!

    Ariel Wada
    CEO, CommerceSocial