Technology Wisdom

At least, that seems to be the conclusion that Sucharita Mulpuru, a researcher at the Forrester Research firm seem to have arrived at, or at least Social Commerce that is utilizing the Facebook platform. In her report she indicates the reasons -  first, only a handful of small retailers are seeing a double-digit percent of their sales coming through their Facebook stores. Second, she found that the number one advantage of Social Networks, namely the ability to target a very precisely defined market, is not being taken advantage of by retailers to the full extent. And the last,  Social Networks such as Facebook are plagued by constant unresolved privacy and security issues. This problem affects both the buyers and the sellers. The former do not trust Facebook with their credit card information, while sellers are wary of implementing a payment solution through their store.

But is all this enough to claim that F-Commerce is doomed to fail?

To put it quite simply: No, it is not. Social Commerce is new – companies, as well as customers are still getting used to it. The solutions for Social commerce, such as the facebook store, are not yet perfected, while retailers are still in the process of learning how to use them.

Also, since it is all so new, people around the world are still not thinking about Social Networks such as Facebook or LinkedIN when they are in the mood to do some online shopping.

This is of course, not equally true for all types of products. The sale of digital products, such as eBooks, renting movies and even virtual gifts is already picking up on Facebook. Selling hard goods, such as printed books, electronics and jeans,  will have a way to go, but we believe it will get there.

Once Social Commerce takes off, retailers will also become more efficient at utilizing Social Network’s main strength, namely the ability to very precisely target people, whether it is based on the traditional qualifier such as age, region or gender or the more specific qualifiers such as college, major, employer, relationship status or interest.

Between who they are friends with or connected to, where they went to school, what eGroups they belong to, which companies they worked for, what companies, or “pages” they are following and so on, there is a wealth of very valuable information on Facebook and LinkedIN for both B2C and B2B  marketers.

As for privacy and security on Social Networks, those are two of the biggest challenges to overcome in order for Social commerce to take off. But as interest in Social Commerce grows, and as direct and indirest sales through social network channels such as facebook stores begin to take off, this challenge will be addressed swiftly and effectively. So, all in all, there are many more reasons to believe that Social Commerce will succeed than that it will not.

Yash Talreja, Vanja Kovacic