Why you should invest in F-Commerce

In his April 5th post, “Brands Give Facebook F-Commerce an F”, Brian Solis, a principal analyst at Altimeter Group, skilfully summarises the recent hype crash around F-Commerce, in light of recent failures by leading brands such as GAP to take advantage of the new channel. He also accurately attests that F-Commerce is not dying – it is still early doors.


The fact remains that social media is an untapped revenue channel.

There are some very strong indicators that the potential of F-Commerce warrants some thought:

  • Facebook has over 955m active users globally, with 30m in the UK.
  • In the US, users spend longer on Facebook than they do on Google.
  • An average of 130 people will see a friend’s “word of mouth” recommendation.
  • Each new fan equates to 20 extra visits to their website over the course of a year.
  • 70% of Facebook users engage with Facebook applications.
  • 20 million Facebook app installations are made every day.
  • 75% of Facebook users have “liked” a brand
  • On average a fan is worth £84.33 and spends £44.43 more per year than a non-fan
  • 60% of people would be willing to share a product or service if given a deal/discount.
  • 53% of people have used Facebook to interact with a brand.
  • 36% of people liked or shared a brand page on Facebook the last 30 days.
  • Each new fan equates to 20 extra visits to their website over the course of a year.
  • 41% of respondents said they want to receive communications from marketers on Facebook

Facebook therefore represents an opportunity for brands to engage more meaningfully and more fully with a vast potential customer base. The logical extension of this is to enable that engagement to result in a sale.



Why many companies fail

Many businesses have explored the monetisation of Facebook as a way not only to return investment in social media, but to increase sales revenue by completing the journey with their customers, which begins with a “like”. However, without a clear idea of where best to start, most have struggled to turn the vision into a convincing and sustainable reality, and have consequently moved the issue to the back burner.

In fact, only 7% of brands with a Facebook page have rolled out some form of F-Commerce, with many struggling to justify design and support costs for a customised Facebook store. Some have tried and failed to emulate their E-Commerce store on Facebook, such as GAP, Gamestop, J.C. Penney, Nordstrom, Banana Republic and Old Navy.  Such failures have fostered a significant degree of nervousness and disillusionment in the strength of the concept. However, the root cause of failure has not been the concept itself, but from the way it was deployed. In the large majority of cases, what was to blame was a failure to leverage Facebook for its unique social strengths, and a lack of incentive for customers to use Facebook rather than the more familiar and trusted website.


How to do it right

Despite a number of high-profile failures, it is clear that if a logical and successful approach to social media monetisation can be articulated, if the concept can be proved, regardless of scale, the appetite still exists to revisit and explore F-Commerce more seriously.

Valtech, as well as others, have experience in succeeding in F-Commerce where others have failed. Proctor & Gamble, The Guardian, Yahoo!, The Washington Post, Oriflame, The Independent and Spotify have all used Facebook to directly drive an increase in sales. The common themes were:

  • Start small, and start simple.
  • Leverage a customer-relevant and unique element of Facebook not available elsewhere.
  • Build the solution around people rather than the available technology.

The issue is therefore not so much about how significant F-Commerce can be to a business. It is about proving the concept first. Beyond that initial stage, success will come from learning more about F-Commerce in the context of each individual business and their customers, adapting to change and employing iterative concept planning , whilst leveraging the consumption-based benefits of Cloud hosting to support growth flexibility

The opportunity is there. The easy bit is popping up the software for the first step. The hard bit is deciding where you are going to start. Fortunately, that’s where we at Valtech can help, and that’s worth a conversation at least.












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