If a business doesn't have an online presence, it's probably not much of a business. From restaurants to banks to neighborhood boutiques, they all have at least a basic website. And with the proliferation of user-generated review sites and search, even if a business resisted going online, it wouldn’t really have much of a choice—someone else would just do it for them.
It’s very interesting to look at how businesses have taken to connecting directly with their customers on Facebook and Twitter. Considering these social media sites have 540,000,000 and 96,000,000 unique visitors per month, respectively, it was probably a smart move. Add to that a recent report showing Facebook surpassing Google to become the most visited website in the US. But all of that is quickly becoming universally accepted, and now, according to some, those numbers are driving a possible next phase in the online evolution.
A recent article by Sarah Needleman in the Wall Street Journal discusses how merchants are now using Facebook and MySpace as direct eCommerce channels. People no longer need to go to CompanyX.com to browse, shop and pay. They can just go to CompanyX's Facebook page and complete the entire transaction from that page, never even setting a virtual foot on the store's website. Many small companies you've probably never heard of are doing this and seeing modest returns, but some bigger players like Hallmark and Brooks Brothers are also part of this trend. According to Needleman's article, it's still too early to tell whether consumers will embrace shopping on social media sites and which companies or products will have the most success.
There’s some downside to this new way of doing business, both for the consumer and the merchant. For example, if you're shopping directly on Facebook and you have a bad experience, it's easier than ever before—and it was plenty easy then—to just click to another tab on the page to comment. Potentially, millions of people could see that comment before the merchant has time to read it and react. It leaves the merchant more vulnerable but also more accountable. It seems that companies like Hallmark and Best Buy have already thought of this issue and have plans of action in place.
There is also the issue of privacy within the social network. If a person shops within his or her Facebook page, the default is for Facebook to create an update on the shopper’s “wall” to alert his or her entire network of friends of the purchase. And after taking a closer look at the Brooks Brothers ecommerce channel on Facebook, it doesn’t work correctly. Every link within the page is broken, and it’s impossible to browse, shop, or pay. Is Brooks Brothers even aware of this? Is there anything they can do to fix these problems, or service potential customers who experience them, since Facebook is a non-traditional ecommerce channel (and also out of their sphere of control)? How much business has the merchant lost? How much reputation? Do the issues “stick” to their brand, or to Facebook’s?
It may be years before we know how this trend plays out, but the early data looks less than promising. It will be interesting to see if the companies that have done well in capitalizing on online channels are ones that best leverage social media eCommerce channels. Will online merchants decide the risk of consumers commenting about bad experiences is just not worth the reward of only modest returns via the social media channel? Or will small businesses with fewer resources be the major adopters, while billion-dollar companies opt for the “tried and true” eCommerce site? It’s definitely worth keeping an eye on.
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