Social Commerce

More FT Coverage of Social Commerce

Another recent article in the Financial Times on social commerce (archived below for reference), talking about the rise Facebook storefronts and twitter deal feeds.  The article reports that Alvenda will be launching 20 more Facebook storefronts in the next couple of months.

With the announcement that PayPal is launching it’s own API next month called Adaptive Payments to compete with Amazon’s fledgling Flexible Payments API, and working with developers such as Payvment to integrate it with Facebook, many of pieces for the mainstream rollout of Facebook brand storefronts are in place.


Online retailers point to new phase for Facebook
By David Gelles in San Francisco
Published: August 4 2009 23:00 | Last updated: August 4 2009 23:00

A new wave of sophisticated e-commerce applications is appearing on Facebook, a sign that the world’s largest social network could rapidly emerge as a big destination for online shopping.

1-800-Flowers, the US floral gift retailer and distributor, last week opened its “Facebook storefront”, an application running on Facebook’s fast-growing platform where users can purchase and send flowers.

At least 20 more such storefronts will appear on Facebook in the next two months, according to Wade Gerten, chief executive of Alvenda, the software developer that built the 1-800-Flowers storefront.

“You’ll see a lot more coming out in the next couple of months,” he said.

Mr Gerten said he had contracts to develop eight storefronts, but that since the 1-800-Flowers application launched, he had secured 12 more. He said the applications would be for “very large general merchandise retailers, and very large electronics retailers”.

The storefronts represent the beginning of a transformation that could turn Facebook into a retail destination, said Sucharita Mulpuru, an e-commerce analyst for Forrester Research. “It’s an enormous platform,” she said. “That means the ability to reach more consumers and make money.”

Facebook has more than 250m users and is growing fast. However, it has no current plans to organise the storefronts into an online mall, or to make money from them by either taxing the transactions that take place on its site, or by offering its own virtual currency.

At least two other companies already have limited e-commerce functionality in their Facebook applications. Sears, the department store, and Threadless, the T-shirt seller, both let users add items to their shopping cart on Facebook. But to complete the transaction users must go to the company’s own website. Allowing users to remain on Facebook while they complete their transactions is important in increasing the site’s “stickiness”. More than 120m people log on to Facebook each day, spending a combined 5bn minutes a day on the site.

Companies are turning to social media sites such as Twitter and Facebook to help them boost business. Many big retailers have a fan page on Facebook, while retailers large and small are offering exclusive deals to their Twitter followers.

But neither site has been able to make money from the increased business activity. Instead, Facebook is focusing on advertising, and is expected to bring in at least $500m (€347m) in revenue this year..

Chartered psychologist specialising in consumer behaviour, wellbeing and technology. Certified CX professional experienced in Design Thinking. A researcher, writer and speaker, Paul is head of Digital Insight at SYZYGY.

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