Major Retailers Close Facebook Storefronts
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Many companies have opened storefronts through Facebook in order to boost sales via social media marketing. Four major retailers have chosen to close their storefronts because nobody has bought anything. JCPenney (NYSE: JCP), Gap (NYSE: GPS), Nordstrom (NYSE: JWN), and Gamestop (NYSE: GME) have all closed their virtual Facebook doors.
The overall finding is that people simply prefer to go directly to the store’s website than shop through Facebook. Retailers have found that fans prefer the sharing of wish lists and discussing products to actually purchasing anything through the storefronts.
Forrester Research Analyst Sucharita Mulpuru told Bloomberg: “There was a lot of anticipation that Facebook would turn into a new destination, a store, a place where people would shop. But it was like trying to sell stuff to people while they’re hanging out with their friends at the bar.”
Marketers have been promoting the concept of “social shopping” for a few years now predicting that it will grow to become a $5 billion dollar industry by 2015. Others believe that the public isn’t quite ready to wrap their minds around the idea just yet.
There’s an old adage that says, “The early bird catches the worm,” while this may be true there is a strong chance the Facebook is chasing that worm entirely too early.
Retailers are not completely disregarding the potential; they are simply stating that it is not feasible at this time. The retailers that have closed their storefronts have stated that they have found it impossible to recoup any kind of return from their investments but will keep an eye on the trend. The Gap, specifically, has said that they would not be opposed to re-opening the storefront if changes in the market are favorable.
There are strong parallels between social shopping and internet shopping. In the 1990s the concept of purchasing items online was met with hesitancy. As time went on and security measures improved the concept became well accepted and eventually the norm. Most people today have had a variety of successful shopping experiences online. It is believed that with time the same will be said of social shopping.
The CEO of 8th Bridge, a social commerce platform, was quoted as saying, “The best way to monetize social media is to empower people to promote products to their friends, not for brands to spam you on Facebook. Online shopping experiences are better when they’re social.”
The Motley Fool owns shares of Gap. BobbieJohnson has no positions in the stocks mentioned above. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.