E-commerce on Facebook was a horrible flop. That is to say, many brands found over the course of several years of experimentation the return on investment in terms of dollars spent developing their online storefronts didn’t measure up, so many of the most popular retail brands – such as The Gap, JC Penney and Nordstrom – were subsequently forced to close their Facebook shops. A recent study by W3B suggested just 2% of people with a Facebook account have made a purchase on the social network.
Yet, simultaneously, e-commerce sites in general (Amazon, Fab.com, etc.) have posted impressive growth figures. For example, holiday e-commerce sales were up 13% to $34 billion in 2012.
Why is it that some sites sell, and others don’t? In particular, why are social media sites so horrible at conversion? I believe it’s a phenomenon related to (what I refer to as) the locus of conversion.
Facebook is a pub crawl
The environment on Facebook yields similarities to the dynamic of a pub crawl. Surrounded by acquaintances and, yes, a few old friends, we dive into topics of various levels of seriousness ranging from the patently absurd, to the politically charged before wandering aimlessly from topic to topic.
We do so without expecting to be inundated with marketing messaging, much the same as we would expect to not be rudely interrupted by an insurance salesman while we were in the middle of telling our best frat house story from college at the local bar.
However, if you are able to be interesting enough to become the topic of our buzzed conversation, I might be willing, in that instant, to purchase your product. I don’t want to leave the bar, mind you. I just want a magical product genie to appear and offer your purple widget to me at a reasonable price. If I don’t have to leave my bar stool, you just might have a sale.