Will Facebook become a force in e-commerce, too?

December 3, 2010

USA-RETAIL/BLACKFRIDAYThe social graph that Facebook is slowly building has been extending its tentacles into different areas of the web – not just micro-publishing the thoughts of a user’s circle of friends, but also online videos, photos and email. One huge area that Facebook has been quiet in so far is e-commerce. But this holiday season, there are early signs that that is beginning to change.

Coremetrics, a web analytics company owned by IBM, recently looked at new trends in the annual shopping spree stretching from Black Friday to Cyber Monday. Among them, it found a nascent trend it called social shopping:

The growing trend of consumers using their networks on social sites for information about deals and inventory levels continued on Cyber Monday. While the percentage of visitors arriving from social network sites is fairly small relative to all online visitors—nearly 1 percent—it is gaining momentum, with Facebook dominating the space.

Intriguing as that may be, it’s hardly strong proof that Facebook will become a force to be reckoned with in e-commerce. But other signals suggest that, given enough time, that could in fact happen. The blog AllFacebook received an email from Facebook with data suggesting that the company is well aware of the potential.

In the email, Facebook reported that half of the top 25 online retail sites, including Amazon and eBay, have integrated their stores with Facebook. Those retailers were active enough in their Black Friday updates to deliver a sixfold increase in status updates from the previous Friday. During Thanksgiving weekend, referral traffic from Facebook to top retailers increased 70 percent.

Retailers may have an incentive to welcome potential shoppers from Facebook: One shopping site found that consumers tend to buy more goods on the Facebook store than on its web site. That may be because people are more trusting of shopping suggestions made by friends, or because of viral coupon campaigns that spread on the Facebook site.

And as Hitwise recently reported, on the day Beatles songs were available for sale on iTunes, Facebook was a key driver of traffic to the iTunes store. One in 200 visits that left Facebook the day the news broke went directly to Apple. All of these examples are more anecdotal than conclusive, but together they strongly suggest that Facebook could emerge as a huge player in e-commerce. Facebook has a ways to go to harness that potential, but even an online retail giant like Amazon would be foolish to ignore the social site as a source of shoppers.

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Or you can take the other side of this. 1% in 2010 is nothing. A small blip of Groupon blew up to a 6 billion dollar business while facebook has almost zero traction. Who has your credit card??? Amazon, Groupon, Apple. Not facebook, not google. There is your answer.

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[…] Will Facebook become a force in e-commerce, too? | Analysis & Opinion | – I feel this is just a small beginning. More to come. I am thinking of a post on these developments and more. A social platform that is a gateway to the entire web. […]

Posted by Links for December 9th – Signals of Noise | Report as abusive