A socially outgoing couple is hopelessly in love. Cheesy poems, gooey statuses, and photos of the couple together follow on Facebook. At special occasions such as Valentine’s day, an anniversary, or a birthday, gifts will be exchanged, and without a shadow of a doubt, photographic evidence will appear on Facebook along with a tag that reads something like “MY BOO JUST GOT ME A HUGE TEDDY AND CHOCOLATE! LOVE HIM SO MUCH XOXO.” Luckily we don’t see too many of these posts. Yet.
Recently, Facebook decided to expand the gifts section by including products from partnered companies. Gifts will now include physical, real-life items from dozens of partners with notable ones including L’Occitane and Baby Gap.
Will this work? Why not. People love to post pictures of their Christmas and birthday gifts, and when people give gifts, the givers appreciate other people knowing about their generosity. On top of that, Facebook makes it incredibly convenient to implement this feature as reminders about birthdays and anniversaries on the website itself would give people cues on buying gifts. Popping a link to the application page next to the daily birthday and event reminders would be extremely simple and would make it easy for users to buy gifts for friends.
This idea is incredible. It provides an easy outlet for Facebook in terms of generating revenue, as this method cannot do harm. With woes concerning monetizing Facebook lingering, this provides an opportunity for Facebook to expand in increasing profits. Because Facebook has a record of all the purchases, Facebook gets more information about the user, allowing more targeted ads. This would increase ad click frequency on the website, as ad relevance would be substantially enhanced. As for the partner companies, desire for social attention would cause people to make these purchases public, so more exposure will definitely follow. This allows companies to advertise to the friends of the previous consumer, and given that friends are usually similar and affiliate with similar people, these companies will get exposure to a relevant base of future consumers. Even though a cut of the revenue will be directed to Facebook, indirect advertising to this relevant base is quite valuable.
Still, there are downsides. If this catches on, friends may be offended if they do not receive gifts on special occasions, complicating relations. In addition, this may provide Facebook a chance to monopolize online purchases. Because so many internet users use Facebook, this could cause a redirection of online shopping traffic in Facebook’s direction, making smaller companies’ sites less competitive as people would focus mainly on Facebook’s store when shopping online. Although good for Facebook, that situation would harm opportunities for small business.
As long as people can get over the hurdle of viewing Facebook as a social platform and begin to think about making purchases through Facebook, this will take off (just in time for the holiday season, nice). Of course, that is a tall hurdle.