Monday Feb 20, 2012

F-Commerce gets an 'F'

Bloomberg is reporting that Gamestop, JCPenney, and Nordstrom have all closed their Facebook stores.  That's not the best timing with Facebook's IPO just over the horizon, but I don't think this should really be news to astute retailers.  Duplicating an e-commerce store within Facebook doesn't really offer a different experience, and Facebook users are used to punching out to the Web for all sorts of things.  By simply putting a store on Facebook, retailers have missed the point of F-commerce.

In my mind at least, F-commerce should be more about the social aspects of shopping leading up to a purchase, not the actual purchase itself.  You're not going to get much more convenient than today's Web stores, so efforts should not be focused there.  Instead, focus on ways to move the water-cooler conversations about products to Facebook where its easier to influence people into acting on those conversations.

If you've ever seen me talk about the topic, I usually show a slide depicting three approaches to F-commerce.  There's the "tab store", which is how 1-800-Flowers first approached Facebook.  Then there's the "wall store," which is best represented by JCPenney and ASOS in the UK.  And finally there's the "newsfeed store," which has been successful for stores like The Limited.  The newsfeed store highlights a couple products or promotions within the newsfeed, alongside the conversations with all your friends.  It capitalizes on the social aspects of Facebook, and doesn't try to duplicate an entire Web store.

My friend Wade Gerten, CEO of 8th Bridge, said of stores within Facebook, β€œit was basically just another place to shop for all the stuff already available on the retailer websites.  I give so-called F-commerce an β€˜F.’”

I want to be clear that I'm not criticizing these retailers for their efforts.  They did exactly what innovative leaders should be doing: experiment, and if it doesn't work then cut the cord quickly.  Now that lessons have been learned, its time to move on and capitalize on the knowledge gained.

Retailers should continue to use Facebook to communicate with consumers and drive them to stores and e-commerce.  As always, the best results come from managing all the channels together in a unified way, leveraging the best aspects of each without needless duplication.

Wednesday Jul 20, 2011

Don't Forget to Check the Rearview Mirror

Over at AppsLab, Jake is reminiscing about retailers gone by the wayside and it got me thinking a bit.  Arguably Tower Records was killed by Apple, Blockbuster was killed by Netflix, Borders was killed by Amazon, and Circuit City was killed by Best Buy.  (I guess its never that simple, but at least we can say there was a clear winner and loser in each of these battles.)

But here's another way to look at it: Tower Records was killed by MP3s.  Blockbuster was killed by streaming video.  Borders was killed by e-readers. (Okay, Circuit City doesn't really fit this motif.  They went down due to a whole host of issues, none of which were really technology based.)  These companies saw the writing on the wall and tried to save themselves, but they just didn't move fast enough.  Blockbuster knew it needed to offer DVDs by mail, kiosks, and streaming but it was too slow to market.  Toward the end its offerings were at least as good as Netflix, but the customers had already left.  Borders offered the Kobo (anagram for "book") e-reader via a partnership, but it was long after the Kindle and Nook had established themselves.

So I think there are a few lessons to take away from the Borders liquidation.

  • No business model is sacred.  What works today is no guarantee for the future.
  • Timing is everything.  Established businesses are best at being fast-followers (with emphasis on fast).
  • What sounds impossible today may not be in a couple years, so don't dismiss it offhand.

Retailers need to be looking in their rear-view mirrors not only at their competitors, but also at alternative technologies that might sneak up on them.  (Yes Gamestop you're on top today, but platforms like Steam and Microsoft Live are sneaking up on you!)  I'm sorry to see Borders close its doors, but I'm excited by the e-reader technology and the pace at which other innovations are coming to market.


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