Digital Focus | Friday, April 22, 2011
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Facebook Doesn't Click For eBusiness Retail Companies Like Google, Facebook represents a looming and largely unknown threat to many sectors of the Web. And while ecommerce seems like fertile land for Facebook to farm, not everyone is convinced that it can. According to new research from Forrester Research, eBusiness professionals in retail collectively report little direct or indirect benefit from Facebook. In fact, social networks overall trail far behind other customer acquisition and retention tactics, like paid search and email, in generating any ROI. "For some companies and brands, Facebook promises to support branding and awareness efforts...but for most eBusiness companies in retail, Facebook is unlikely to correlate directly to near-term sales," according to Sucharita Mulpuru, principal analyst at Forrester and lead author of the report. Barring any unforeseen events, U.S. ecommerce spending will reach $278.9 billion by 2015, Forrester recently predicted. It credited new online shopping models -- like "flash sales" and "daily deal" services -- with continuing to generate excitement among shoppers. And it's worth noting that Facebook is exploring these areas. Yet, two years worth of data that Forrester has collected with Shop.org shows that social networks fail to drive meaningful revenue for eBusiness retail pros, have a questionable ROI and are generally ineffective as customer acquisition tools. "Furthermore, while Facebook proponents would argue that the best of Facebook commerce is yet to come, the fact remains that, in spite of an open architecture and several hundred thousand developers making efforts to develop useful social shopping applications, few, if any, have managed to create a breakaway success," Mulpuru says. Led by Mulpuru, Forrester said it spent eight weeks interviewing nearly 24 technology vendors, retailers and interactive marketers to craft a perspective on the topic. Facebook apparently did not respond to requests to be interviewed for the report. In theory, Facebook is well-positioned to address something that the Internet has been notoriously bad at supporting: product discovery, according to Forrest. "But the key challenge is that Facebook is about socializing rather than shopping," says Mulpuru. Unfortunately, eBusiness professionals in retail regard this tactic as the least lucrative of Facebook commerce opportunities; click-through and conversion rates for links from these pages/links are anemic. Furthermore, they report that commonly clicked on features from their Facebook efforts center on coupons and promotions. This leads many retailers to believe they are not attracting particularly valuable shoppers through Facebook initiatives. (Source: Online Media Daily, 04/07/11) Click here to email to client
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