Two weeks ago, the ‘leading’ F-Commerce platform, Payvment, announced that it was closing its doors. The existing shops would be transferred to ECWID, a competitor from Russia. I read this news with some astonishment. After all, more than $ 8 million had been pumped into Payvment by high profile Venture Capital investors such as BlueRun Ventures and Sierra Ventures. Had all this money really just been spent on creating a standard ‘Shopping cart in a Tab’ solution. Did these investors not pay any attention at all to basic Facebook usage statistics that showed this would be a bad investment, namely that less than 2% of people that Like a page ever return to that page again, and almost none return more than once. Or that Tab solutions don’t work on mobile devices, the fastest growing way that people are using Facebook. These two facts alone should have been enough of a deterrent to any VC investor in putting their money into any kind of Fanpage Tab based solution. I can only credit the management of Payvment with having extraordinary powers of persuasion or such excellent Powerpoint skills that they were able to convince industry experts that this was a good idea worth putting money behind. What astonished me even more is how easy it seems to be to buy positive media coverage if you have enough money. Look at any review of Payvment on any industry publication and all that you will see is glowing reviews of the ‘tens of thousands’ of shops set up on Payvment and the ‘hundreds of thousands’ of happy customers buying from these shops. Not once did I see a publication question how this could be possible when in actual fact only 0.5% of all e-commerce traffic was referred by Facebook. Was it all just paid for PR?
Whatever the case may be, the fact of the matter is that the closure of Payvment is a very positive moment for Facebook commerce. Finally we can lay to rest the failed idea that replicating your standard store inside a Facebook Tab will provide any meaningful results. The closure of Adgregate, the industry pioneer in this space, was the first nail in the coffin and the demise of Payvment is the last.
So where is commerce on Facebook going from here? I believe that this is a fork in the road that is going to branch out into many different innovative directions. The main ones could be:
a) Offers inside the Timeline/News Feed
b) Matching deals with user profiles
c) Peer-to-peer recommendations
d) Group based offers
Facebook itself has already entered into both the News Feed Offers and Gifting space with what I believe are two really great implementations. For gifting it bought a service called Karma and relaunched it as Facebook Gifts. The app allows Facebook users to easily send real world e-commerce purchases to their friends without having to know their shipping address.
On the Offers side, Facebook now lets online business post offers into their Timeline and when a Fan claims an offer, all their friends can see it in their News Feeds, allowing them to claim the same offer as well. The user journey is extremely simple:
One of the main advantages of both of these systems is that they were designed from the ground up to work on mobile devices, something that almost none of the v1.0 F-Commerce providers took account of. Here is how Facebook Offers looks like on a mobile device:
I have no doubt that both of these programs will be a success for Facebook. What’s more important, they point the way to the direction that third party services should take when creating the newt wave of F-Commerce innovation: keep it simple, keep it within the News Feed, make sure it’s mobile and make sure it uses the open graph to spread the message far and wide.
Good bye F-Commerce v1.0 – Hello amazing new social commerce innovations!