Is Facebook's new 'want' button the innovation that it has been looking for to drive social commerce to the big time?
With the announcement that it is trialling a new ‘want’ button, Facebook has taken a decisive step to increase its influence in ecommerce.
Launched this week as part of a US-only pilot scheme, the new button forms part of a new applicationcalled ‘Collections’ that allows retailers to create a catalogue in Facebook and post ‘like’, ‘want’ or ‘collect’ buttons on product images within newsfeeds.
Facebook members are able to ‘want’,’collect’ or ‘like’ a product and, in a feature similar to Pinterest’s ‘pinboards’ feature, they can collate products into a ‘wishlist’ and are offered the chance to buy the goods from the retailer’s own site.
So far, seven retailers, including Pottery Barn, Victoria Secret and Wayfair, are testing the feature as part of the trial.
“Cracking the commerce side of the business is essential if Facebook is to turn around the negative perception of its future profitability,” says Mark Cluer, MD of PMA Digital
.“In the wake of its share price dive post-IPO, Facebook has been under pressure to come up with ways to increase its value. The ‘want’ button is surely an attempt to convince investors of Facebook’s future value.”
So far, efforts to drive ‘Facebook commerce’ (f-commerce) have seen little success. Earlier this year Bloomberg wrote a damning report on the state of f-commerce
, detailing how a growing number of large retailers were shutting their Facebook storefronts, with the likes of GameStop, Gap Inc., J.C. Penney and Nordstrom all having closed their Facebook stores in the past year.
Some remain convinced that ecommerce via Facebook is the archetypal round peg and square hole - Forrester Research’s Sucharita Mulpuru has highlighted that while Facebook is the most visited site on the web, its users go there to socialise rather than shop, equating it to “trying to sell stuff to people while they’re hanging out with their friends at the bar.”
But there are still many that see the potential of f-commerce. Reuters recently interviewed a host of start-ups, such as Fab.com and BeachMint, that remain confident that Facebook will be the next great ecommerce platform
, and that despite slow uptake, the infrastructure and sheer volume of users will be enough to ensure that it will take off.
So will the introduction of the ‘want’ button represent the tipping point for f-commerce? MyCustomer.com spoke with a number of experts to gauge their opinions.
Building on Pinterest interest
“It's a much more direct version of Pinterest, isn't it? On Pinterest you say ‘look at that, that's lovely!' hoping that your friends might take notice. But Facebook already tells your friends when it's your birthday. Now it will also tell them what they should have bought you - and give them the chance to dive off and make that purchase right here, right now,” she says.
“It’s also stepping on Amazon’s toes, by encouraging users to build wishlists, which will make targeting better. But Facebook needs to be careful that it doesn’t upset users (again) by appearing to abuse their personal data. Assuming it’s not intrusive to users, it’s great news for brands. If you see that your friends ‘want’ something, you’re bound to be intrigued, and want to find out more about the product.”
Marc Warren, MD of Periscopix
, believes that the offering is more sophisticated than Pinterest, and believes that it could pave the way for a more ambitious move by Facebook.
He says: “It’s been compared to ‘pinning’ on Pinterest, but the big difference to me is that it has Facebook’s advertising model behind it. If Facebook can combine what consumers ‘want’, with what brands are advertising, and add to that the opportunity to buy through the site, it’s got a winning formula.
“Presumably Facebook will eventually integrate this to Facebook Exchange. This could do two things: build a more detailed profile of users based on stuff they want to buy from outside Facebook; and make advertising and retargeting more effective on Facebook.”
But while Justin Bowser, MD of HTK Horizon
, believes that it looks like a good idea on the surface, he also sees a couple of potential areas of concern for the new endeavour.
“Amazon has had a ‘wishlist’ for a while now, and I’m seeing start-ups like Global Dawn
entering the online commerce space with similar ‘preference graph’ technology,” he says. “If used well, this extension to the social graph could help online commerce merchants to improve the relevance of targeted offers.”
But he adds: “I see two downsides. Firstly, yet more of a retailer’s valuable customer behaviour data will sit with Facebook – which not everyone will see as a good thing. Secondly, this could go horribly wrong if ad re-targeting isn’t applied with the appropriate degree of subtlety. People will soon stop clicking ‘want’ if all they see for the next 2 hours is ads for the whatever-it-was they ‘wanted’!”
Social commerce game changer?
So, ultimately, will the 'want' button be the game changer that Facebook has been looking for and that will drive social commerce to the big time? Opinion is sharply divided.
Richard Britton, managing director of CloudSense
, believes the button is exactly what Facebook needs to convince brands to commit to the concept of f-commerce.
“Facebook has been working for a long time behind the scenes to make the site more attractive as a retail channel,” he suggests. “Ultimately, advertisers want to drive sales and Facebook wants to demonstrate its value as a sales platform. If Facebook can do this through the ‘want’ innovation, taking a percentage of each sale for itself, both brands, shareholders and customers will benefit.”
And Britton says that how brands integrate the new functionality into their purchasing process will influence how successful it is for them.
“The ‘want’ button is all about generating sales. The simpler brands can make the buying process, the more likely they are to boost sales. Each extra step in the sales process makes a conversion less likely. The main benefit of f-commerce should be a quick, easy and secure purchasing process, where customers can buy without leaving the site. For this to become a reality, brands need to integrate f-commerce into their sales and order management systems.
“For organisations to take full advantage of the potential of Facebook’s new ‘want’ offering most will need to firstly remove the silos between business systems to deliver a more granular view of customers. This will enable advertisers to better understand customer behaviour and better target customers via Facebook. With technology analyst house IDC suggesting that in the next three to five years, between 10 and 15% of consumer spending in developed countries could be via sites such as Facebook, integrating f-commerce into a multi-channel offering is set to become a necessity rather than an option.”
Others are more circumspect about the potential of the innovation, however.
“There is huge potential for brands if Facebook can motivate users to transact on the platform – or at least express the desire to buy a product. But for whatever reason, there seems to be a resistance by users to buying through Facebook, and I can’t see that the ‘want’ button will change this very quickly,” adds Cluer.
“My concern is that users view Facebook as a social environment rather than a commercial one. As more and more commercial messages are introduced, there is a real danger that users will leave. I can’t see the ‘want’ button shaking up online commerce to any large degree, but it’s an interesting experiment.”
Steve Richards, MD at Yomego
, is similarly wary to predict the impact of Facebook’s new addition – and points to the way Pinterest is used to demonstrate why it may not be the saviour of f-commerce.
“This is a hard one to say - as it really depends on so many behavioural factors that we're a long way from understanding. For example - in many ways, Pinterest is one large compendium of things that people 'want' - and although many brands have embraced it, I have yet to see any case studies where adoption of Pinterest by a brand has led to an increase in sales. In some ways, part of the appeal of Pinterest is that it is 'virtual' - you don't need to actually buy these things for people to appreciate your curation of them – so for customers, the ability to buy is not necessarily the point. And of course, Pinterest has a famously female, 18-30 skewed demographic of users. For this to be successful in the long-term, it will need a wider appeal.
“Will the brands and consumers the ‘want’ button attracts be more of the 'aspirational lifestyle' type, or the 'everyday purchase'? Will we be solely in the realm of the 'Amazon gift list' - where you can see what to buy your friends for Christmas or a wedding gift? And how will consumers react? I think for most aspects of the 'want' button, we're too early to draw conclusions.”
Nonetheless, irrespective of Facebook’s latest effort, both Richards and Bowser believe that social commerce could have a future.
“The ‘want’ button isn’t a social commerce game changer – but it’s a step in the right direction to killing the Groupon model,” says Bowser. “Social commerce will hit the big time when we can successfully combine things like ‘like’, ‘want’ and ‘need’ into an overall social context. Ecommerce vendors need the thought leaders who will ‘want’ a new item, but for their bottom line they also need the long tail (or the ‘herd’) who will follow up with ‘likes’ and peer-influenced purchases. It’s the combination of technology with psychology, sociology, anthropology – and it’s very, very exciting.”
RIchards concludes: “I don't know if this will be 'the' game changer - but it certainly has the potential to be one of them. I would anticipate there being many more moves in the social commerce space in the coming months, particularly around interaction between existing loyalty schemes and social.”