In January, Booz & Company produced a report suggesting that stores on Facebook were set for explosive growth—a 56% CAGR over the next five years, which some commentators have hyped as 600% growth. In 2015, the report says, the market for products sold on social network sites will be worth $30bn, of which $14bn will be in the U.S.
According to some commentators, this is a ‘massive opportunity’ that ecommerce companies should jump on and get the ‘first mover advantage.’
Hmm. Many of the ecommerce heads who I’ve talked to that have Facebook stores are somewhat more cautious, referring to their stores as ‘an interesting experiment’ or ‘we’ve learned a lot and so has our Facebook shopping cart vendor.’ When asked about sales volumes, they typically report low single-digit sales.
All of this says to me that these are very early days, and while early adopters may want to plunge onto the bleeding edge, it’s frankly not right for most ecommerce companies. In fact, I’ll go further and suggest staying away for 2011, with a few exceptions.
Here’s why.
A $14bn U.S. market may sound really big, but I wanted to see how big it is relative to forecast growth for traditional ecommerce.
It’s miniscule.
By combining the data from Booz with the U.S. Commerce Dept. and mobile commerce forecasts from CODA, for the first time we can see where commerce on social networks sits relative to overall online sales.
As a percentage, in 2015, after that 600% growth, commerce on social networks will represent only 4% of all online commerce.
Mobile commerce is forecast to be three times bigger by 2015.
Here’s the data, published for the first time:
Of course, all forecasts are wrong: They’re either too high or too low. But for mainstream ecommerce it just doesn’t make a whole ton of sense right now to duplicate the ecommerce site, particularly when sales using the Facebook channel are miniscule. (…)
Amazon has announced that it has implemented a range of social commerce features based on Facebook Login and Facebook Recommendations. This is a significant move for Amazon, with implications for the ecommerce sector. Amazon has for some time had its own social features (such as reviews), but this new move signals a strategic recognition of Facebook—and the importance of social commerce.
We’ve called for a while now for tighter integration between Facebook and ecommerce sites, because it is just common sense. When Facebook rolled out its range of social plugins at the F8 developer conference this year, it became not just common sense but easy to do as well. (…)
Normally, when companies announce a 40%+ increase in costs and miss analyst expectations, their stock takes a hit. Last week, Amazon was no exception with its stock dipping by 15% immediately after the news, but it has subsequently recovered to $118-$120 where it has been for the last month.
The earnings miss was probably more sensitive this quarter because of the launch of Apple’s iPad. Ever since the iPad launch, Amazon’s stock has been trading 20% lower than its high this year at around the $150 mark—assuming that Amazon’s Kindle reader would be negatively impacted. Amazon did not disclose its Kindle sales but is seeing strong growth for Kindle and Kindle-based ebook purchases. Kindle is becoming to Amazon what iTunes is to Apple. (…)
In Parts 1 and 2 of this series, I wrote about how the Top 10 Converting Websites achieve spectacular website conversion rates by driving repeat sales and through superior merchandising.
The final major conclusion of the SeeWhy /Nielsen research (published in an eBook titled ‘Lessons Learned from the Top 10 Converting Websites’) is that the top ten converting websites ALL use remarketing.
This is remarkable since our research shows that only 26 percent of ecommerce sites use remarketing.
Remarketing is one of the most effective techniques to boost website conversion rates and is arguably the most profitable marketing technique. Website visitors are ‘remarketed’ based on their browsing behavior — using email, direct mail, or in the case of anonymous visitors, advertising. Of these techniques, email is by far the most cost effective, and the top ten converting websites make use of the email address captured on your first site visit whenever possible. (…)
In January, Booz & Company produced a report suggesting that stores on Facebook were set for explosive growth—a 56% CAGR over the next five years, which some commentators have hyped as 600% growth. In 2015, the report says, the market for products sold on social network sites will be worth $30bn, of which $14bn will be in the U.S.
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