Early last year an American business consultancy, Booz & Co. predicted that social commerce (people buying stuff via social networks) would soar to $30 billion from $5 billion by 2015, with Facebook contributing a majority of sales. It was, on the face of it, entirely possible.
If there are over 850 million people hanging out on Facebook then surely there’s room for retailers to set up shop and sell stuff to them, right? Many big brand retailers, spurned on by witnessing the success of Zynga selling virtual goods to millions of people, decided to set up shop on Facebook. The dream, however, has turned sour for some.
According to a report by Bloomberg, Gamestop, JC Penney, Nordstrom and Gap have all opened and closed stores on Facebook in the last year. It appears big brand retailers are better off sticking with their own e-commerce sites rather than trying to sell stuff via a Facebook store. Why, is the obvious question?

Not a place to sell
Ashley Sheetz, the VP of marketing and strategy at Gamestop told Bloomberg, “We just didn’t get the return on investment we needed from the Facebook market, so we shut it down pretty quickly … For us, it’s been a way we communicate with customers on deals, not a place to sell.”
Perhaps the problem lies in the fact that the first generation of Facebook shops just tried to replicate their own e-commerce sites on the network? Facebook is potentially an enormous market place and one that cannot be ignored. However, retailers will have to go back to the drawing board and try to figure out how to create a shopping experience that works on Facebook. If Facebook really is ‘not a place to sell’ then its €100 billion valuation looks decidedly over hyped.

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