Data shows Facebook commerce does work — just not for big brands

Facebook has been taking a lot of heat lately. There was the highly anticipated, then botched, IPO. Its first earnings report, while solid, failed to impress investors. Plus many are wondering in unison: How will it/can it monetize its mobile offering?

The negativity started early this year when several big retailers — Gamestop, Nordstrom, and JC Penney — closed their Facebook stores. Mr. Zuckerberg wants more web commerce within the Facebook stream, so successful stores are an important part of his plan. But while Facebook’s traffic is impressive, the sales figures for these major brands was not.

If these big names with their big budgets can’t make a go of F-Commerce, who can? We decided to take a deeper look to see if the prognosis was as negative as it seemed. As Ecwid is the second largest store-building application on Facebook, we have an inside view of Facebook commerce in 174 countries.

We started pulling data from the over 40,000 Ecwid accounts globally that have active stores on both a website and on Facebook. For the second quarter of this year, we found that 22.1 percent of those orders came from the Facebook store. That’s up from 17.3 percent in Q1. These are impressive figures, especially when you consider they’ve grown from 15 percent in 2011 when we first started tracking this.

Clearly Facebook store commerce is working. But why has our universe of stores succeeded where some big brands have not? The answer may lie within the demographic profile of our stores: mainly small- to medium-sized businesses (SMBs). Are they the real innovators in social commerce?

Our analysis points to the thesis that smaller businesses may indeed know how to be more “social” at selling. We’ve noticed the following attributes of a successful Facebook store:

• Social conversations from a small or mom-and-pop company tend to strike the right tone, a far more personal tone than a big company’s.

• SMBs more effectively integrate their stores into the flow of the conversation. Dropping a store into a social news stream has to be done carefully. The purpose of social networks is to connect people, so an ill-timed sales offer can be a turnoff.

• Small companies can be more flexible with the latest store-building technologies, many of which are geared to social. We’ve found that providing the option of LIKEing or Tweeting a purchase in real-time is something consumers will respond to if it’s presented properly.

• We’ve seen the most successful stores focus first on community building, not product hawking. This may sound like Social 101, but it bears repeating.

Social networks are not meant to be built or consumed like a typical website. It’s a different breed of communications platform. Just like with blogging, which started with individuals and SMBs before larger brands caught on, the best practices of social commerce may be discovered by the smaller players. Since the rules of this game are still being written, it’s important to pay attention to who’s figuring it out first. Right now, that’s the SMBs.

Ruslan Fazlyev is founder and CEO of Ecwid, which produces web, mobile and social media store-building applications.

[Top image credit: jarchie/Flickr]