EcommerceBytes-NewsFlash, Number 2743 - February 20, 2012     2 of 5

Do Small Sellers Fare Better on Facebook than Large Retailers?

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Large retailers such as Gamestop, Gap Inc., JC Penney and Nordstrom have all opened and closed storefronts over the past year. Forrester Research analyst Sucharita Mulpuru told Bloomberg the closings show that Facebook doesn't drive commerce and casts doubt on its value for retailers.

But the approach taken by some large retailers fails to take advantage of the way social networking site work, according to some entrepreneurs who have ventured into the "social commerce" space.

"Larger sellers have built custom storefronts that are typically just clones of their .com websites," according to Payvment cofounder and CEO Christian Taylor.

He said Payvment encourages its sellers to be "truly integrated into the social fabric of Facebook." For example, he said, when a shopper "wants" an item on a Payvment seller's store, it will be broadcast to that shopper's friends as well as to other visitors to that item, creating a social referral on top of just the newsfeed.

Taylor also said Payvment's successful smaller sellers focus on authentic communication on Facebook, often "from the horses mouth" instead of from a marketing manager, resulting in a very engaged fan base and conversion to sales. "At Payvment we've see shopper traffic and transaction volume consistently grow 10%+ per month, driven almost exclusively by smaller sellers across our 60,000+ active storefronts."

Former eBay executive Daniel Leffel, founder of Yardsellr.com and Style.ly, said creating Facebook stores as "tab applications" on Facebook Fan Pages is fundamentally misaligned with the point about what social commerce is all about - people connecting with others who have similar interests.

Leffel said he's not surprised that some retailers adopting a "store" approach have struggled. Yardsellr and Style.ly allow online sellers to take a different approach and "allow users to join communities centered around the stuff they love and to use Facebook as a way to meet new buyers and sellers who sell those items. The more than 10 million members of our blocks have driven us to grow GMS 35% month-over-month, every month since our launch, and I can think of no better validation of this strategy.

Leffel pointed to Yardsellr's "Hello Kitty" block on Facebook. "We create tools to allow sellers to manage the conversations across both Facebook and Yardsellr, which is critical because the conversation drives the sales - 40% of purchases are driven as a result of a comment notification."

And, Leffel said, "because of the way feed visibility works on Facebook, every time someone comments, that comment is visible in the feed to the friends of that user. That friends-of-friends visibility drives new users to find Yardsellr, which is how we're adding more than 30k new block members per day."

According to Outright CEO Steven Aldrich, whose company provides bookkeeping services to small online businesses, large companies are looking to drive incremental sales when they launch on new channels, but small businesses are looking to sites like Facebook as a discovery platform. "Every "like" is a potential new buyer," he said.


About the author:

Ina Steiner is co-founder and Editor of EcommerceBytes and has been reporting on ecommerce since 1999. She's a widely cited authority on marketplace selling and is author of "Turn eBay Data Into Dollars" (McGraw-Hill 2006). Her blog was featured in the book, "Blogging Heroes" (Wiley 2008). Follow her on Twitter at @ecommercebytes and send news tips to ina@ecommercebytes.com.


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