Forrester says Facebook NOT likely to drive eCommerce


What is your reaction to this? Are you saying …

  • …yes, I knew it
  • …the study is b******t

The study is based on the response from 102 online retailers. In a nutshell the study concludes that:

“…most eBusiness companies in retail, Facebook is unlikely to correlate directly to near-term sales. A few pockets of success, however, have surfaced…”

The report confirms my suspicion that Facebook is at the Peak of its Hype.

Why is it so?

Three reasons are provided:

  1. Social network efforts are largely about experimentation
  2. Social network rank last among 10 customer acquisition tactics
  3. Retailers find social networking ineffective compared to search and email

Key challenges include low click-through rate (other than coupons and promotions), open graph effective only for very large companies and very difficult for even the most sophisticated natural language processing tools to shape meaningful conclusions from the unstructured data.

“…while Facebook disciples believe that there will be something that will in the future transform shopping, the truth is that large brands just have not experienced any sizable gains in direct sales from Facebook…”

However, some companies can drive Businesses with Facebook Commerce:

  • Small businesses who do not want to setup their own website and local businesses
  • Large retailers with rich customer database can enhance their insight into customer behavior
  • Categories that can be digitally distributed, virtual goods and gaming companies
  • Products that consumers spend time thinking about prior to purchasing

The report goes on to conclude that money is better spent on “behavioral targeting and mobile“. However, it also recommends that you need to keep an eye on social metrics and exploit it where they make the most sense.

Here is the Forrester report – Will Facebook Ever Drive eCommerce?. The author is Sucharita Mulpuru.

Udayan Banerjee on Google+


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