In the last month, Facebook has ramped up its commerce-focused activities by announcing a range of new initiatives including Facebook Marketplace, a Craigslist-style service for buying and selling stuff, a standalone Events app, friends-driven recommendation functionality, stronger PayPal integration with Facebook Messenger and other payment and buying functionality integrated into Facebook Messenger.
What a difference four years make.
In 2012, Facebook commerce was broadly panned in this seminal article from Bloomberg (via Business Insider). At the time, Ashley Sheetz, then VP of marketing and strategy at Gamestop, said, “We just didn’t get the return on investment we needed from the Facebook market, so we shut it down pretty quickly. … For us, it’s been a way we communicate with customers on deals, not a place to sell.” Noted angel investor and Hunch CEO Chris Dixon, now a general partner at Andreessen Horowitz, tweeted the following: “Facebook is like Starbucks where everyone hangs out but no one ever buys anything.”
So what has happened since 2012? First, scale: No other platform provides reach to a global user base of 1.7 billion people. Second, the growth of Facebook Messenger and the success of commerce initiatives on messaging platforms like WeChat in China and Line in Japan. Third, according to research from Business Insider, social is driving much bigger increases in retail traffic than any other online channel, and Facebook is the dominant social commerce platform.
But all of us in the digital marketing and commerce world should be rooting for Facebook’s commerce efforts, whether we’re partners, frenemies or competitors. Here’s why:
- F-commerce can push M-commerce over the tipping point (in the West): Despite the growth of mobile commerce, it only represents 2.6 percent of all retail sales in 2016, according to eMarketer. What m-commerce needs is a major push in order to get us as a society over the tipping point so that it will become mainstream, and the easiest way to do that is via Facebook. Such a push will help spur the growth of mobile payment solutions, which have remained niche/early adopter products despite the efforts of banks, credit card companies, and smartphone leaders Apple and Samsung. Once mobile payment becomes mainstream, m-commerce will experience growth like the stick part of the hockey stick graph.
- We need to convert bot yype into action/value: The most hyped term in technology in 2016 is undoubtedly “bot.” And for good reason. A lot of interesting implementations are emerging for AI-driven bot technology in messaging and other mobile industries. But now we need to go beyond vision; we need to focus on real implementations — bot experiences that create real value for companies and end users, like hybrid bot/human customer service solutions, which optimize each for the best, most efficient experience at the lowest cost. With Facebook Messenger being the largest messaging platform in the West, we’re most likely to find real value in bots implemented via the platform.
- And then on to p-commerce, v-commerce and … : For years, publishers have experimented with various merchandising and commerce models, but few have succeeded in generating real revenue from these initiatives beyond affiliate fees. In-video commerce is another area that has been touted for years, yet we haven’t seen much success. The push for social commerce via Facebook will provide an impetus for these other forms of commerce in the same way that Facebook initiated Instant Articles and provided a better experience for readers thanks to faster loading pages and ads.
As someone with years of experience in mobile and advertising technology, I was surprised by Facebook’s fast and successful mobile rollout. Despite the various challenges the company faced in its early years, publicly-held Facebook, led by Mark Zuckerberg and Sheryl Sandburg, has proven to be one of the best at execution in Silicon Valley. Given its scale, holdings including Facebook Messenger, Instagram, and WhatsApp, and its proven ability to execute, I’m betting the second coming of Facebook commerce will be successful. And I’m betting entire digital marketing and commerce eco-systems, including frenemies and competitors, will benefit from Facebook’s social commerce success.
This article was written by YouAppi and Moshe Vaknin from VentureBeat and was legally licensed through the NewsCred publisher network.