Facebook storefronts have not been a leading source of e-commerce transactions, despite the platform's huge user base.
Only 20% have purchased something directly within Facebook, according to a study released by ThreatMetrix in partnership with the Ponemon Institute.
A separate study, by Oracle, found that 34% of American and Canadian consumers say they would never purchase products via a retailer’s Facebook page, compared to 19% who said they would (9%) or already have (10%) done so.
Industry Executives Doubtful about Social Commerce
Talk that social commerce has not been successful thus far, despite the hype surrounding it, is growing. Jonathan Johnson, president of Overstock.com, an online retailer, told the Financial Times, that "the commercial aspect of social media is overhyped and no one’s really caught that rabbit yet."
Bill Bass, who runs Fair Indigo and ecommerce operations for the Charming Shoppes chain, told Storefront Backtalk that to date no one has cracked the code on how social media impacts retail. "There's every reason to believe that consumers do not make their choices of where to buy things based on the number of "likes" on a retailer’s Facebook page," he said.
"Also, there is no proof that "likes" have a high credibility with prospective customers."
Luxury Brands May Succeed
However, there is the possibility that luxury brands—which, ironically, were hesitant to develop social media channels for a long time—may succeed where other brands have failed.
One reason brands’ Facebook retail endeavors have not succeeded is that consumers do not trust these particular storefronts, according to the ThreatMetrix study.
However, luxury brands have a different—more personal and one-on-one–relationship with their consumers, which lends itself to trust. It may be they can succeed where other Facebook retails storefronts, have not succeeded as much as the industry had hoped.
A test of this theory is underway: a number of high profile brands launched Facebook storefronts in recent months, Women’s Wear Daily reports.
Gilt Groupe launched its Facebook store in August with a Facebook store. Oscar de la Renta became the first luxury brand to launch an F-commerce initiative entirely on the social medium. In May, Bulgari launched a Facebook storefront with jewelry retailing for $12,000 and up.
"Almost 100 percent of brands cite Facebook as a source of upstream traffic," Scott Galloway, New York University marketing professor and co-founder of NYU think tank Luxury Lab told WWD. He pointed to another luxury brand, Burberry, noting that it is getting more traffic from Facebook than Google. "All of this [Facebook] traffic and investment is leading toward commerce."
