Facebook Gifts represented an early effort to bring commerce directly into the social media experience by allowing users to purchase and send goods to other members of the network. Rather than positioning Facebook as a direct competitor to established e-commerce marketplaces, the service offered the company another way to connect its advertising and social networking capabilities with actual purchases.
Integrating social commerce with programs such as Facebook Offers could also give merchants a clearer connection between advertising and sales. By enabling consumers to discover a product and complete a transaction without leaving Facebook, the platform could reduce purchasing friction while providing advertisers with better insight into whether their marketing efforts ultimately generate revenue.
In preparation for the holiday shopping season, Facebook announced a service called Facebook Gifts. In short, the service enables members of the social network to purchase digital (physical) goods from Facebook and send them to the email (shipping address) of fellow Facebook users.
Many analysts and reporters have incorrectly interpreted the Gifts platform as Facebook’s entrance into the e-commerce market, a move that would put them in competition with companies like Amazon and eBay. Facebook participates in the e-commerce market in that they accept orders for goods via the Internet; but unlike eBay and Amazon, Facebook probably doesn’t aspire to become a one-stop shopping destination. It would be very difficult for Facebook to compete with the long tail of eBay’s catalogue or Amazon’s fulfillment expertise. Rather, Gifts will more aptly serve as an extension of the social network’s marketing and advertising capabilities.
Looking into the future, it doesn’t make sense for Facebook to limit their online shopping platform to gifts. Why not promote the purchase of products for personal use? This could happen as Facebook expands its network of retail partnerships and would pair well with their Offers program, which enables merchants to issue coupons via Facebook pages. Some companies have questioned the value of advertising on Facebook, citing an inability to prove the ads generate sales. Accepting payments may help solve this problem by enabling consumers to act on an ad (i.e. make a purchase) without leaving the site.
Facebook Gifts demonstrated how social networks could evolve beyond advertising and become a more direct part of the e-commerce journey. Facebook did not necessarily need to compete with the extensive product selection or fulfillment capabilities of established online marketplaces to play a meaningful role in digital commerce.
Instead, the larger opportunity was connecting social interactions, merchant promotions, advertising, and payments within a single platform. If consumers could move directly from seeing an offer or advertisement to making a purchase, social commerce could provide merchants with a more measurable way to turn engagement into sales.
