in Social Design

f-commerce: the mismatch with the traditional retailer business model

There is a lot to do about f-commerce lately, especially the closing down of some Facebook storefronts of big retailers. Of course there are people telling that commerce on Facebook doesn’t work (and of course never will work in their views) because Facebook is different and without understanding their own comments, they hit the nail on the head:

“There was a lot of anticipation that Facebook would turn into a new destination, a store, a place where people would shop, but it was like trying to sell stuff to people while they’re hanging out with their friends at the bar.”

This is exactly the reason it is so hard for retailers to do anything with social media at all:

  • Most retailers have boring products which are not worth talking about. Why bother your friends  with boring products.
  • Traditional retailers have a business model based on high volume and low margins, so there is no time (or money) to build up a relationship with their customers. The only thing that matters is selling high volume.
  • Retailers traditionally are short-term thinkers. A ROI of 6-9 months is unthinkable and in some cases even not possible since the retailer would be bankrupt by then. However 6-9 months is the smallest timeframe you should be thinking of when doing anything with social media.

It is different. Adapt or die

Facebook is different and by trying to push old things on a new platform you notice that things won’t work. Facebook is not your e-commerce site, it is a social platform. Providing people with a catalog of all your products doesn’t work. People on Facebook never said that they were missing your catalog on Facebook in the first place, even worse: they don’t miss your organization at all at Facebook.

If you want to do anything around commerce on Facebook you have to design it better instead of just copying your catalog in a tab on a Facebook page. Your catalog is not worth sharing, products, if these are great products, might be worth sharing, experiences are worth sharing. It is not about selling your product to people on Facebook, it is making the product worth sharing, it is making the product worth to talk about and it is making sure that the product adds value to the individual.

It is a different way of doing business. Conversion is not the primary goal on Facebook, conversations and relations are the primary goals. If you succeed in these two then you might be able to sell something. However if you keep your old business model in place it is nearly impossible to do this, since the old way of working is constraining you.