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Why Facebook Storefronts Fail

  |  February 22, 2012   |  Comments

Executives from startups contend that commerce can succeed on social networks, but requires new approaches.

Executives from social technology startups said commerce on Facebook requires more than opening a storefront.

Speaking at the OnMedia NYC conference on Tuesday, executives offered up several reasons why four high-profile brands - Gamestop, Gap, J.C. Penney, and Nordstrom - reportedly shuttered their Facebook storefronts over the past year.

"Opening a storefront does not mean you have a social commerce strategy," said Justin Yoshimura, CEO of 500Friends, which offers social loyalty technology for retailers. "Consumers want to shop on your store and want to interact with your brand on Facebook."

In response to a question by attendee Neil Glassman, executives speculated on additional reasons why businesses pulled the plug on their Facebook storefronts. They included:

  • A brand's e-commerce website typically gets more visitors than its Facebook page.
  • Facebook commerce shouldn't be narrowly defined as storefronts. Instead, it encompasses other activities, such as loyalty programs and rewards.
  • And commerce on Facebook is still in its experimental stages.

Executives from social technology companies also pointed to approaches they are taking to advance commerce on Facebook and other social platforms.

Horizon Studios CEO Janice Diner, for instance, said her company developed a social sales incentive and training platform, which is designed to enable brands to reward and engage with sales and customer service teams.

And SocialGift CEO Mo Govindji said his company's application can be used to encourage "group gifting," whereby friends on Facebook can team up to collect contributions and buy a gift for another Facebook friend.

Lastly, Yoshimura said Pet Food Direct worked with 500Friends to develop PFD Rewards, a program on the brand's Facebook page and website. Once someone enrolls in the program, they can earn points for referring friends, placing orders, and other activities. Participants can then redeem the points for rewards, such as pet food donations to needy pets.


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Anna Maria Virzi

Anna Maria Virzi, ClickZ's executive editor from 2007 until 2012, covered Internet business and technology since 1996. She was on the launch team for Ziff Davis Media's Baseline and also worked at Forbes.com, Web Week, Internet World, and the Connecticut Post.

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