Looking to remodel itself as a social-commerce hub
Facebook is reportedly planning a major e-commerce push with features that will let users make purchases and share them to their profiles, as well as a new tool that will let users add goods to wish lists on the site. Developer Tom Waddington claims he has discovered coding that directly gives reference to “social commerce” and a new button that resembles the firm’s existing ‘Like’ recommendation button but is instead called ‘Want’. The report is an indication that Facebook is looking to remodel itself as a social-commerce hub in an effort to deepen its relationships with brands and businesses and diversify its revenues.
“The fact the code contains references to ‘socialcommerce’ is a sign that they’re taking it seriously,” Waddington tells Mashable. “In the same way music, news and videos are shared on the site, Facebook is planning to allow users to share both wants and purchases, from items bought within games to donations.”
Facebook is keen to move into e-commerce as it attempts to lessen its dependence on advertising, which currently makes up the majority of its revenues, and mature its business model after a rocky start to life as a public company. The firm has seen some success with content sharing on its site via its partnerships with media companies such as Spotify and YouTube and is now looking to migrate this success to e-commerce. Facebook has already taken some steps towards this, buying mobile e-commerce firm Karma in an undisclosed deal, indicating that the firm could be looking to monetise its mobile site via e-commerce partnerships.
Despite Facebook’s focus on e-commerce, doubts remain over the power of social media to drive sales. A recent report from Monetate suggets while traffic from social networks to e-commerce sites is up on the up, this is having little effect on sales. Just 0.5% of visitors referred from social networks actually convert and make a purchase. Furthermore, half of visitors that do click through to retail sites leave without visiting any other pages, suggesting ,despite the pressure on brands to engage with their customers on social media, its ability to generate sales from this publicity remains unproven. The study also suggests that social media trails traditional promotional channels by some distance, with Monetate claiming search has a conversion rate of 2.44%, five times higher than social media.
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