NEW YORK — Facebook may be preparing a $5 billion initial public offering, but that isn’t the only thing it has up its sleeve. Welcome to the dawn of the Age of Social Commerce.
This story first appeared in the February 8, 2012 issue of WWD. Subscribe Today.
Wade Gerten, co-founder and chief executive officer of technology solution provider 8thBridge, said at the WWD Digital Forum at the Asia Society Museum here that the future of e-commerce lies within reshaping the experience completely around people, which is likely to be the year’s key buzzwords in the online world.
The firm, which specializes in creating social commerce platforms, pioneered Facebook commerce, or F-commerce, launching the first retail product ever sold on the medium in 2009 with 1-800-Flowers.com.
“The opportunity for social commerce is for everyone to share offers on Facebook. Almost all Facebook activity is friends sharing with friends — people are what drive social commerce,” Gerten said. “Facebook is no longer just a Web site. Think of it as a platform.”
He is quick to say that “F-commerce kind of got an ‘F’ — coming from the team who built it” of early retail efforts on the site, where brands were just pushing out deals to users, but this is changing rapidly. In the three years since pioneering F-commerce, Gerten said he’s learned what works and what doesn’t when it comes to selling on the medium. For example, very few people were actually checking out on Facebook, and special or exclusive offers for product are most effective when only available to fans.
It’s Facebook’s new open graph or timeline feature that he predicts will change the commerce experience on the medium. The timeline now serves as a homepage for users, or their “digital persona.”
“It’s a digital scrapbook of your life, [and] all life moments get added to that timeline,” Gerten said. “This is a real big opportunity for brands in that users weave and take your brand images and offers — and put it directly in their life story, their identity online.”
This social commerce is sure to unlock a new wave of online growth, he predicted. Once users integrate products and offers into their open graphs, it will cultivate “brand advocates” (friends will share what they like) and promote loyalty — and friends can see what brands and product the people they follow are “liking,” buying or even engaging with.
He said that with respect to F-commerce, 90 percent is advocacy shopping — meaning that someone will purchase a product their friend has either bought or recommended — and just 10 percent is push shopping, or brands broadcasting a message.
F-commerce is still in its infancy, according to Gerten, but more than transacting, he said that getting people to interact is the most important thing for brands to keep in mind.
Gary Lombardo, manager of e-commerce solution Demandware — whose clients include Tory Burch, Kate Spade, Crocs, Barneys New York and Elie Tahari — believes it’s definitely too soon to deem F-commerce a flop. Although he doesn’t think Facebook will itself ever be a force in driving revenue, it will be a place where fans can engage and brands can offer promotional deals and sales that drive the experience back to the branded site.
Macala Wright, digital innovation consultant and founder of FashionablyMarketing.Me, holds similar views to Gerten and Lombardo with respect to the power of social selling. But in addition to Facebook, she widens the breadth of the category to include social discovery sites — such as Pinterest, Lyst, Mulu.Me and Discoverred — as platforms that enable commerce in a social setting.
To her, the concept of social commerce is the industry coming to the realization that every platform and network is a potential sale.
“Retailers now understand that there is no direct path to online consumer sales. Consumers’ desire to broadcast and share their lives has lead things like shopping to become inherently social,” Wright told WWD, adding that sites such as the above are developing cult followings because they enable users to highlight self-curated collections of products, items and destinations that inspire them. She even goes so far as to call this “simple self-expression” on discovery-based mediums as “every retailer’s dream.”