Facebook is losing E-Commerce | Hacker News Reader

Facebook is losing E-Commerce

nikcub.appspot.com

78 pointsnikcub32 comments

Why would I go to Facebook to interact with a store when I can go to, you know, the store's site to interact with the store?

Facebook could, I imagine, be a powerful online store for people who don't otherwise have storefronts, but people who think I'm going to go to FB to shop online at Macy's are probably the same people who thought I'd go to Second Life to shop online at Macy's.

This is the problem with Facebook commerce so far - most retailers are simply offering their entire catalog up for sale via FB without any curation or exclusivity. Consumers don't want to browse through thousands of products via FB; but there still exists the opportunity for success through curated content. Brands need to create reason for consumers to shop via Facebook and most brands aren't doing that (yet).

Your first sentence is spot on. What I think is getting lost in this conversation is that it makes more sense for retailers to incorporate Facebook-enabled functionality on their own website, rather than have an e-commerce store within Facebook.

I founded a company called Snapline (http://www.getsnapline.com) that helps retailers integrate Facebook functionality into their e-commerce site. We've talked to many retailers, and most are still not sure where Facebook comes into play for their business. Small retailers want to engage and increase their Facebook audience, but it's time-consuming to make consistent feed updates and it's impact on sales is pretty murky. Large retailers seeks to gain much more by engaging their Facebook audience, but implementing features on their site that leverage Facebook data is outside their core area of expertise. I think what can go a long way in solving both problems is incorporating functionality within an e-commerce store that doesn't require a lot of manpower and improves the shopping experience.

Because lots of people like to shop together with friends, and most ecommerce sites don't provide a good or even any experience for social shopping. Facebook or someone will eventually get this right. Pinterest is a down that path.

OTOH, I don't see a need for Facebook to necessarily be involved, since I don't think people shop with all their - just a few. Not being a social shopper though, I can't comment much more than that.

Even if I wanted to shop online with somebody else, I would do it on the store's website not on Facebook. I wouldn't mind if Facebook powered the interaction behind the scenes, but I don't feel good about shopping on Facebook.

Because Facebook is the internet. What is that "site" thing you keep talking about?

What is this facebook you keep talking about? Pinterest is the Internet

What is this pinterest you speak of? Pinspire is the Internet.

http://www.Pinspire.com

I like the idea of customers being able to start their shopping experience on Facebook; e.g viewing selected inventory on Facebook - or any other site for that matter - potentially allowing them to add a product to their cart, and then drawing customers back to a main e-commerce site to continue and finalise purchase.

The idea of having a total shopping experience hosted within the Facebook ecosystem worries me, because it places too much control in the hands of an organisation that's known to be capricious.

People keep making the same mistake that you do. What do you matter, nothing? It is what the majority do, the same majority who type google into the search query box, rather than the address box.

I think part of why Facebook has failed thus-far as a platform for commerce is that they haven't made-possible the primary consumer advantage of having multiple retailers selling through one platform - comparison. If you think about an aggregator like the restaurant platform Seamless, they provide a mechanism by which you can search across merchants and see all of your options in a way that feels like you're ordering from Seamless first, and the restaurants second.

Facebook has gone the other direction ... treating each retailer like "an island" where there isn't an easy way to at-a-glance see all of the retailers and their products in one view. Sure, food and "stuff" are different things... but I think for consumers to embrace an aggregating platform for commerce, Facebook will need to flatten the view to the customers to allow them to get a view of their buying choices in a less-segregated way than things have been presented to them until now.

It's this supply-side marketing mentality. "Oh look, a social media platform! Let's think about how to use this to push our business at consumers."

Businesses look at facebook and ask, "How can we use this to market more to our customers?" And the answer is to make a facebook page and get bunches of followers and make posts and blah blah blah.

Seems like none of them think to ask "what do our customers want to do on facebook and how can we add value to that experience?"

Is it just me or is this the first time that anyone has even heard of stores on Facebook? I haven't heard of a promotion or anyone encouraging me to go to a store on facebook. I use Facebook pretty regularly also.

I don't use Facebook, but keep up with web stuff and hear a lot about it otherwise.

I had no idea that they had e-commerce ambitions.

Sounds more and more like one of those Yahoo!/Netscape/AOL portal projects every day.

Stores on Facebook have been around for a while (e.g. http://www.facebook.com/YouBrandInc?v=app_135607783795). Typically you create them with a third-party app. I guess the best case study of this was the Gap Store on Facebook (one of the coolest FB pages I've seen but no longer online). While FB has time to get its e-commerce strategy right, this news represent a huge blow.

It seems counter intuitive to point customers to Facebook and effectively lock yourself into their environment. I am betting their trials were low profile.

"Pinterest is one of the fastest growing products ever, and recent estimates (although possibly wildly inaccurate) suggest that the site is already achieving tens of millions of dollars in affiliate revenues from its 10 million (and rapidly growing) users"

Anyone who's done any affiliate marketing knows this is wildly inaccurate. Most people are there to browse, a minority click-through to the affiliate link, a smaller minority have an intention to buy the product, and an even smaller minority buy that product on that specific site in that specific cookie timeframe.

Pinterest probably clears a million in affiliate revenue per year. They're not a coupon site. They're not Google Adwords. it's all about user intention. It's just a step above "selling a product to people in bars".

The OP repeats the ridiculous notion that Pinterst is making 10s of millions of dollars not once but twice. As you say, the estimates in The Atlantic article are wildly overstated.

Pinterest is not exactly a "minimal Facebook integration". It is integrated with Timeline. As such, all your activity (pins, follows) are sent to Facebook for display in news feeds, and for Facebook's ad algorithms. But Nik's point is still very valid - less time spent on Facebook is less time spent looking at Facebook ads, and stream posts of brands you are following. They will have to do something to address this, maybe purchase the likes of Pinterest, or require ads on Connect sites, or something more thoughtful and strategic.

"for Facebook to justify a $75-100 Billion valuation it would need to grow its earnings by an order of magnitude"

Even if this was true (and personally I don't doubt that it is), it won't matter. FB will go public at a valuation of $100bn, and people will buy the stock. I am willing to bet on this.

The stock market is rarely driven by business fundamentals these days it seems, but by perception and a form sheep mentality of the (mostly individual) investors.

There's very little evidence that the individual investors would buy in at that range.

As evidence of faltering IPO demand, check out what happened to Zynga -- took about 10 minutes to fall below ipo price.

The fact that Facebook is already trading at $100 billion is decent if not strong evidence that investors, individual or otherwise, would buy at that range. And Zynga quickly moved above its IPO price where it now sits.

It moved above the IPO price due to the Facebook IPO announcement and the related launch of the social media ETF (Tape C, ticker SOCL)

> The stock market is rarely driven by business fundamentals these days it seems, but by perception and a form sheep mentality of the (mostly individual) investors.

Except until it is a bear market; which it is every couple of years and everything is priced based on it's fundamentals.

I think this big picture 'losing ecommerce' is missing some nuanced analysis, that in my experience is actually more interesting:

* I've had a better time with facebook ads than google ads, in terms of price and targeting * A lot of tiny businesses are doing all their promotion on facebook. I don't think it'd be too much of a stretch to say that facebook is the platform of the microbusiness. Eg like mums selling baby clothes, photographers showing their portfolio, things like that.

A facebook ad is the way that facebook will make money from e-commerce. Facebook is a place to share with your friends, and everyone is falling over themselves trying to get those buying something online to tell their friends about it to get some viral lift. Facebook doesn't need to house the commerce for this to work well.

It's worth repeating: Facebook have only a very limited aspect of our social experience. Weaker social connections - reading someone's review, tweet, repin, commenting on YC - are a magnitude more numerous than our limited circle of acquaintances.

Facebook does not own the long tail of social.

Unlike most companies, facebook will have many years to iterate and many years to get this right.

Don't count them out.

the statement is just as lost as the retailers are on facebook.

Comeon, they aren't losing e-commerce. They never had it to begin with.

One massive problem is obvious: from the top down, Zuckerberg knows absolutely nothing about retail, fashion, and so on. They can't engineer their way out of not understanding the business.

Facebook can merge with Pinterest in a 50/50 merger, then it can justify the 100B valuation!

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