By Rieva Lesonsky
What if you opened a Facebook store and nobody came? That’s the situation some major retailers are facing, reports Bloomberg. It’s a big change from a year ago, when Facebook stores were being touted as a threat to dominant shopping sites such as eBay and Amazon.com.
As the top online destination in the world, Facebook’s entry into ecommerce was widely touted as a game-changer. In June, Bloomberg says, Facebook’s director of business development David Fisch contended the site would make online shopping a social experience.
The company hoped that retailers buying ads to drive traffic to Facebook stores would increase Facebook’s revenues. And in January 2011, Booz & Co. projected Facebook would be responsible for the majority of “social commerce” sales, which it forecast would surge from $30 billion to $5 billion by 2015.
But those high hopes haven’t panned out. Within the past year, major retailers including Gap Inc., Gamestop Corp., J.C. Penney and Nordstrom have all opened Facebook storefronts. But despite having millions of Facebook fans, all the retailers have since closed their Facebook stores, citing insufficient return on investment.
What’s behind the failure? One Forrester Research analyst told Bloomberg that trying to sell products on Facebook is like “trying to sell stuff to people while they’re hanging out with their friends at the bar.”
Gap and Gamestop both shut their Facebook stores after finding that consumers preferred to shop on their regular websites. A spokesperson for Gamestop told Bloomberg that shopping on the website was already convenient for customers, so a Facebook store didn’t offer any advantage. Instead, customers preferred Facebook as a means for communicating with the company and getting news about deals.
What does the failure of big companies’ Facebook stores mean for your company? The jury isn’t entirely out on Facebook stores (or F-commerce, as some have dubbed it). If your company already has a successful ecommerce site, a Facebook store might be unnecessary. But if your Facebook page is getting a ton of traffic, you don’t have an ecommerce site and you’re trying to test the waters, setting up a Facebook store could be a useful step for your business. Finally, take a lesson from big companies: Track and measure the ROI on your Facebook store, and if it’s not worth the time and effort, cut your losses.
Image by Flickr user birgerking (Creative Commons)
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Tags: Facebook, small business, social media
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