E-commerce and Facebook: Friends or foes?

Posted by: Douglas MacMillan on August 05, 2009

Last week,1-800-FLOWERS.com became the first retailer to launch a full-service online storefront within the pages of Facebook. Now users can leave birthday wishes for friends, and then order them a bouquet of flowers without ever navigating away from the social network.

It’s an early example of online shopping merging with social media, a trend we’re likely to see more of as retailers look to retain their relevance on the Web. “A lot of people are telling us they like to do things in the same environment; they don’t like to hop around on the Web,” says Jim McCann, founder and CEO of 1-800-FLOWERS.com. “And so many people are living their lives on Facebook.” In the next two months, at least 20 more retailers will set up similar shops on Facebook using the same technology provider, Alvenda, according to a Financial Times report.

Clearly, both the retailers and Facebook have something to gain. Social media sites are now among the top 10 referring Web sites for most online retailers, says Scot Wingo, CEO of e-commerce services provider ChannelAdvisor. “Retailers are thinking about how to both drive more and monetize more,” he adds. Opening the shop next-door to the conversation eliminates the need for back-and-forth.

But both sides are also navigating risky waters. Companies have in the past been wary of advertising on social sites, fearing association with unseemly user-generated content that could damage their brands. An e-commerce site on Facebook seems to be a confident acceptance of the content that surrounds it.

How bad could the content on Facebook be? A search for 1-800-FLOWERS (note the omission of “.com”) on Facebook reveals three member-created groups that the company can’t be too pleased with: “1-800-Flowers Sucks,” with 100 members; “1-800-FLOWERS RUINED MOTHER’S DAY,” with nine members; and “1-800 Flowers Ruined My Valentines Day,” with two members.

“In this world you just have to accept the fact that it’s different than it was,” says 1-800-FLOWERS.com chief executive McCann, who led his company to become one of the first toll-free phone retailers in the 1980s, and one of the first online retailers in the 90s. “The boundary between the customer and the staff person is shredded in good ways and challenging ways. You just have to be there for your customer,” he adds.

Things may also get hairy for Facebook, if the past is any lesson. Members of the world’s largest social network have repeatedly spoken out against any changes to the site that appear to serve commercial interests. In November of 2007, users formed protest groups and declared their outrage over Beacon, an advertising tool that publicized users’ behavior around the Web to other Facebook users (Facebook later changed the privacy settings on Beacon to appease the protesters). And in February of this year, the company again came under fire for changes to its user agreement that some deemed an invasion of personal rights (again, Facebook backtracked).

Will e-commerce be welcomed by Facebook users with open arms? The storefronts that will be set up on the site won’t interrupt the experience of using the social network, says Facebook spokesman Brandon McCormick.

Do you agree?

TrackBack URL for this entry: http://blogs.businessweek.com/mt/mt-tb.cgi/