Friday, April 29, 2011

Will F-Commerce Succeed?

A researcher at the Forrester Research firm has recently asked herself the same question. And the answer she came up with was, shockingly, “No”. According to the analyst Sucharita Mulpuru there are a few main reasons for this conclusion.

First, right now only a handful of small retailers are seeing a double-digit percent of their sales coming through their Facebook stores. And even that is the result of special selling models, such as flash sales. Second, she found that the number one advantage of Facebook, namely the ability to target a very precisely defined market, is not being taken advantage of by retailers to the full extent. And the last main reason why F-commerce might not take off is the fact that Facebook is plagued by constant unresolved privacy and security issues. This problem affects both the buyers and the sellers. The former do not trust Facebook with their credit card information, while sellers are wary of implementing a payment solution through their f-store.

But is all this enough to claim that F-Commerce is doomed to fail?

To put it quite simply: No, it is not. Facebook commerce is new and companies, as well as customers are still getting used to it. The solutions for f-commerce, such as the f-store, are not yet perfected, while retailers are still in the process of learning how to use them.

Also, since it is all so new, people around the world are still not thinking about Facebook when they are in the mood to do some online shopping. Though this is not equally true for all types of products. The sale of digital products, such as, for example, renting movies on Netflix is already quite established on Facebook. Selling jeans, or other clothing still has a way to go, but it will get there.

Once f-commerce takes off, retailers will also become more efficient at utilizing Facebook’s main strength, namely the ability to very precisely target people from a specific interest group. Between what Facebook pages and ads people have liked, who they are friends with, where they went to school, what Facebook groups they belong to, and so on, there is a wealth of very valuable information on Facebook for online retailers and marketers.

As for privacy and security on Facebook, those are two of the biggest challenges to overcome in order for f-commerce to take off. But as interest in f-commerce grows, and sales through f-stores begin to take off, this challenge will be addressed swiftly and effectively. So, all in all, there are many more reasons to believe that f-commerce will succeed than that it will not.

Staff Blogger, the Technology Gurus, Inc.

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