Online Retailers Make Gradual Move into Social Commerce

A recent Wall Street Journal article suggests that online retailers are beginning to move in the direction of using social networks like Facebook and MySpace to sell their products. It is a trend that is being met with marginal success, according to the article.

"The journey of a thousand miles begins with a single step," says an ancient Chinese proverb. What we are seeing is not merely a trend, but an evolution of sorts, the gradual integration of commerce and social media. Given the growing dominance of Facebook, it is a process that appears will continue unabated, especially as it applies to that network in particular.

Recently, I spoke with Christian Taylor, CEO of Payvment, a social commerce company which provides a shopping cart that merchants can add to their Facebook Fan Page. Unlike other carts, such as those mentioned in the WSJ article, the transaction takes place without the purchaser ever having to leave Facebook. The cart uses Paypal to provide a secure socket layer (SSL) to ensure the safety of the purchasers credit card information, says Taylor.

In Taylor's mind the evolution of social media and ecommerce is a natural one that will only continue to grow in scale.

"Where do I see the future? It's a no-brainer," he said. "Don't even think of ecommerce, but, instead, look at Facebook itself, one-half billion people and growing. Retailers know it is potentially the largest marketplace in the world for the sale of their products."

The WSJ article differentiated between sales taking place directly inside social networks and sales that come as the result of some type of promotion via social media (the Dell Outlet Twitter account is one example).

I understand the reason why the WSJ reporter separated the two - the focus of the article has to do with social media's effect on direct sales - but the underlying philosophy is the same in both cases.

Social media, which has heretofore been a conversationally-oriented marketing medium, is now becoming one oriented to conversion as well, conversions which can come in many forms: product sales, lead generation, email newsletter subscriptions, whitepaper downloads, traffic to the company Web site and more.

Interestingly, you don't have to sacrifice one in favor of the other. Highly engaged fans are as likely to purchase a product via a social network as they are to talk about it with their friends there. At least that's what the future seems to hold suggests the Journal.

There is one point of correction that needs to be made to the WSJ article. It said that some shoppers may feel uncomfortable entering their credit card information on Facebook.

Point in fact, neither of the apps from the two ecommerce platforms listed, CoreCommerce and Volusion, actually transact the purchase directly on Facebook. Once a user clicks a product image or "add to cart" button, they are whisked away to the actual ecommerce store itself. Essentially, the Facebook app is little more than a photo gallery that mimics the look of a shopping cart. (I'm not being critical, but it is what it is.)

Regardless of the baby steps being taken now, social media and ecommerce will continue to merge. With the continued mainstream adoption of social media, it has too. Like Payvment CEO Taylor said, "It's a no-brainer."

NOTE: Next week, I'll be starting a series of posts on "Facebook commerce" over at Practical Ecommerce and will be focusing on a number of ecommerce cart providers which are incorporating Facebook apps into their platform.