Facebook has certainly drawn its share of grief this year. There’s the mishandled IPO and a stock price that has underwhelmed us all so far. General Motors pulled its Facebook ads earlier in the year, and there were the widely publicized Facebook store closings by big brands such as Gap, Gamestop, Nordstrom and JC Penney.
When these big players closed their Facebook stores, many sounded the death knell for Facebook commerce, also known as “F-Commerce.” Yet from where we stand at Ecwid, the picture appears far from bleak. In fact, it’s quite the opposite.
As the second largest store-building application on Facebook, we analyzed data from all of our merchants globally (primarily small- to medium-sized ventures) who use Ecwid to operate both web site and Facebook storefronts. Here’s what we found:
- Businesses with stores on both a web site and Facebook, secured 22.1% of their overall Q2 2012 revenue from the Facebook store, an increase from 17.7% in Q1 and 15% for all of 2011.
- The average Q2 revenue of the Facebook stores rose 38% from Q1.
- The overall number of Facebook stores increased by 26% in Q2 from Q1.
Clearly, F-Commerce could stand for “flourishing” commerce in the SMB market that we serve. Given the consistency of their success, these companies may know something the larger enterprises do not. So we tallied the attributes of successful F-Commerce stores, and derived the following valuable observations:
- Social conversations from small companies tend to strike the proper tone, a far more personal tone than that of big companies. You wouldn’t walk into your local mom-and-pop store and expect them to engage you in marketing speak. The same applies to Facebook. We tend to buy more if we know a merchant personally and if they speak with us socially. The conclusion is simple – if you’re not ready to communicate with your customers like friends, you may not be ready for F-Commerce.
- SMBs more effectively integrate their stores into the flow of the conversation. Dropping a product sale offer into a social news stream has to be done carefully. The purpose of social networks is to connect people, so an ill-timed sales pitch can be a turnoff. If you’re going to make the leap to social commerce – actually conducting a product transaction – remember not to disrupt the purpose of social networks: to connect people. Therefore, make the process as seamless as possible, and tactfully integrate your store and sales message into the conversation.
- Small companies are more flexible in adopting the latest store-building technologies, many of which are geared to social. Merchants now can easily create F-Commerce storefronts like Ecwid in minutes and make their offerings highly targeted. This helps make store offers more friendly, and social customers are more open to them. One example: we’ve found that providing the option of LIKE-ing or Tweeting a purchase in real-time is something consumers will do if presented properly. Today’s modern store software also offers features previously found only in major brand storefronts, including powerful application program interface (API) options. Take advantage of this new breed of software and you’ll also spend less time on administration.
- The most successful stores focus first on community building. This back-to-basics approach bears repeating. Transforming your Facebook page into a list of product links will alienate customers. Social networks are communications platforms, so maintaining a flow of communication with – and between – your customers is essential. Build a community around your business, engage your customers, encourage fan-to-fan communication and product discussions; then simply offer a convenient way to buy.
So don’t believe all of the negative hype eulogizing the death of social commerce. Our data indicates clearly that it is working, and for those companies implementing it correctly, their productivity from social commerce is accelerating rapidly. As to who is building the successful model to emulate, pay attention to the players who currently are writing the rules for social commerce. For right now, small businesses are charting the way.
Ecwid President Jim O’Hara has over 25 years of experience leading enterprise technology companies to high growth by penetrating new vertical, geographical and partner markets. Currently, O’Hara is leading the global expansion for Ecwid’s fast-growing, cloud-based store building software.