Is Facebook Poised To Make a More Serious Push Into E-Commerce?

When Meerkat and Periscope created a stir, Facebook rolled out its own live streaming service. Moving into e-commerce seems like a logical step.

Facebook has morphed into so much more than a social network. It’s an identity service, a video streaming site, a social login provider, a messaging app, and many more things to various user groups. Until now though, it hasn’t made a big impact on e-commerce directly. An article by Jan Dawson, founder and chief analyst for tech research consulting firm Jackdaw asserts that Facebook may be positioned to make the transition.

Dawson notes that Facebook already has many of the essential components of a successful e-commerce business.

  • Goods: Either goods procured directly or close connections with companies that could be suppliers of such goods
  • Potential buyers: As large a number as possible of potential customers for those goods you have to sell
  • Signals: Ideally, strong signals about which goods you’ll offer will be of interest to your potential customers
  • Customer-service infrastructure: Ways for your buyers and sellers to communicate with each other before, during and after the sale
  • Marketing tools: Both above-the-line advertising and word-of-mouth tools for making potential customers aware of the goods on sale

In creating a must-use service, Facebook has the incredible advantage of being the social network default. This leads users to rely on Facebook for everything from messaging their friends, to searching for products. All Facebook needs now is a direct way to sell.

Given its position at the top of the social media market, Facebook is poised to take advantage of any developments it sees. When messaging apps became a dominant force, Facebook split Messenger out of their core service. When Meerkat and Periscope created a stir, Facebook rolled out its own live streaming service. Moving into e-commerce seems like a logical step.

Facebook also seems to have a proactive approach to new technologies, and ways of doing business. E-commerce growth is fueled by the mobile revolution, so Facebook is looking to expand its ad offerings into Messenger.

Dawson predicts that the next big move for Facebook is to implement buy buttons. This isn’t really a surprise; most social sites are working on a buy button as a more direct way to power social commerce. The challenge is that buy buttons are not a panacea for social shopping and may not provide the shopping experience consumers are actually looking for on mobile.

Facebook doesn’t need to verify its core revenue model; its ad offerings already bring in plenty of money. Moves into e-commerce are about both cementing a position in the market, and sometimes beating competitors at their own game. Until recently, Facebook didn’t appear to be in competition with Amazon. And until last year it didn’t look like Facebook was competing with YouTube either. Now Facebook is a big part of the online video conversation.

What’s more, Facebook already hosts commerce: it has all the infrastructure in place and it’s well positioned for success. Now it’s just a matter of empowering retailers with direct commerce tools.

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