Once big brands began amassing large groups of followers, many began opening up e-commerce pages on Facebook.  After the initial surge in F-commerce (Facebook commerce sites), many of these pages have been shutting down their F-commerce tabs recently.

A Bloomberg report cited the closing of GAP, J.C Penney, Nordstrom and Gamestop’s commerce sites as a potential reason that Facebook is not a viable source of revenue.  This follows increasing speculation that Facebook would move in to the E-commerce realm with a great deal of success.

GameStop spoke to Bloomberg about the shutdown of their site:

“We just didn’t get the return on investment we needed from the Facebook market, so we shut it down pretty quickly,” Ashley Sheetz, VP of marketing and strategy at GameStop, told Bloomberg.

Does this mean an end to the potential that Facebook once had as a commerce site?  Not necessarily.  Facebook may still be a viable platform for E-commerce if brands approach it correctly.

A common thread amongst many of the retailers attempting to sell on Facebook, is that they made their Facebook commerce site extremely similar to their existing webpages.  The most common formula was to implement their online catalog in to an existing Facebook app and to make the items available for purchase.  The question that arises when using this formula is, what incentive do shoppers have to use Facebook to purchase products over your existing webpage?  This question gains even more weight when considering the fact that Facebook apps tend to run slower than most basic E-commerce websites, adding further motivation for users to shop on the brands existing site.

It seems that many brands did not fully take advantage of the Facebook platform when designing their F-commerce sites. Facebook offers many advantages a simple website cant.  The most obvious component of Facebook which brands should leverage, is the fact the site is social in nature.  Although some are looking at this as negative in the commerce aspect, if leveraged correctly it can certainly drive a brand’s online sales.

Through utilizing the new open graph system a brand can utilize Facebook actions to display items bought, on the news feeds of the purchasers friends.  Furthermore with the rumored improvements to premium ads, brands may be able to pay to sponsor these actions and have them appearing in a prominent role on news feeds.  Brands may also be able to deep link these items  having a user click on the story in their news feed and be brought directly to the product purchased by their friend instead of a generic landing page.  This is just one method of utilizing the social nature of Facebook in an advantageous fashion.

As with most things related to the Facebook platform, Facebook will provide the tools but it is up to the marketers and developers to find creative and effective ways to implement them.  As brands begin to realize the full potential of the new open graph system expect to see another surge in  F-commerce sites.

Sociable Labs analyzed more than 1.35 million clicks from October 2010 to January 2012 in attempt to determine the effectiveness of Facebook connect on e-commerce sites.  The study found that Facebook connected users were 9x more likely to engage and share e-commerce sites.  The study defined Facebook connected users as:

• Those who used social log-in alternatives, such as “log in with Facebook” buttons, and
• Those who clicked on e-commerce sites’ calls to action, which required them to share information from their Facebook accounts.

The studies two most important findings were:

• Facebook Connected users are 9 times more likely to engage with on-site social sharing features (i.e. click on a call-to-action button for a social sharing application).
• Facebook Connected users are also 9 times more likely to complete the sharing process and send product/offer content to their friends on Facebook.

The software Vendor reached the following conclusion:

Based on our results, Facebook-connected users provide significant ongoing value to retailers, as these users continue to engage and share at very high rates on return visits.

Given this fact, the natural conclusion is that retailers should find engaging social experiences that motivate shoppers to connect, driving significantly higher LTV (lifetime value) through ongoing new customer referrals.

Beyond adding like buttons and other social sharing features, you should consider adding a social log-in alternative to your site. Plus, consider adding the number of Facebook-connected users as a key performance indicator for your social strategy.

According to a new study conducted by ShopIgniter, limited time sales that are exclusive to your Facebook users can increase fans interest by 398%.  This method of sale can be effective for either E-commerce or brands with a physical presence.

When designing a flash sale, it is important that you limit the scope of the sale giving the impression of exclusivity. It is also beneficial to measure new fans brought in through the sale as well as the monetary gains associated with the sale.  By tracking this you can determine who responds to this type of sale and market more specifically to them in the future.

According to a recent study, Social Commerce is projected to reach $30 billion within five years.  However it seems at this point, users are still hesitant to complete transactions through social media.  Harris Interactive conducted a study on behalf of Digtas that may explain this trend:

•  55% of social media users aren’t comfortable giving credit card information via social media;
• 45% of social media users are at least somewhat comfortable doing so, especially men between the ages of 18 and 54 of $35,000 or more;
• People are spending as much time accessing social networks via their mobile devices as they do via their PCs, especially men aged 45 through 54;
• 34% of social media users agree that they’d be more likely to share info about a purchase they made on a social media site with friends than one made on a traditional e-commerce site;
• 50.7% of social media users who use their mobile phones to access social media sites spend close to a full hour per day on average on them via a mobile device;
• Social media users who use their computer spend an average of 56.3 minutes on these sites per day;
• 38% of those who use their mobile phones to access social media sites cite general browsing as their primary activity on these sites, although older males are likeliest to cite this (53% of males ages 45 to 54 compared to 35% of men aged 18 to 44, versus 42% of men 55 and over;
• 75% of social media users indicate that they agree that they would be more likely to purchase a product or service that a friend openly endorses via social media;
• 74% of social media users indicate that, given the option, they wouldn’t use virtual currency, such as Bitcoin or Facebook Credits to pay for a purchase made on a social media site; and
• 20% of social media users agree that, where possible, they would purchase products or services from their favorite brands on a social media site.

It seems that users do not fully trust this new method of commerce.  However it should be noted that the same trends were present when eBay and Amazon first came on to the scene.  It will take time to establish a comfort level with users, but with the massive audience that Facebook for example, reaches the potential is huge.