August 26, 2013
Does Virtual Gifting Work Better for Facebook?
Facebook will end a program that allowed users to send physical goods to one another through the social network as part of a bigger effort to focus on virtual ones such as gift cards.
The switch comes less than a year after Facebook launched Facebook Gifts as a tool to allow users to send their friends teddy bears, flower arrangements and cookie baskets from its online marketplace to celebrate their birthdays, weddings, job promotions or other occasions. The fact that 80 percent of the items sold through its gifts service were gift cards prompted the change.
"We’re really making the decision based on user feedback," Lee Linden, Facebook’s head of the Gifts program, told All Things Digital. "The physical stuff is interesting for sure, but our goal is to build stuff that’s really great for the majority of people who are using it."
Facebook further told CNET that the move will cut down on delivery and management costs. The physical gift launch was seen by some as a potential threat to major e-commerce players like Amazon and eBay.
The Facebook gift shop will expand its offering of gift cards from brands and retailers. In some cases, some merchants that were only offering physical goods on the site will now take digital codes for payment.
Facebook will also allow members to purchase gift cards in variable denominations for the first time. Starbucks, for example, currently offers three amount options for gift cards: $5.00, $10 and $25. Other popular gift card options includes Fandango for movies, Facebook Games, SpaFinder and Netflix.
The company also plans to make Facebook Card — a prepaid credit card introduced earlier this year that consumers can use to pay at select merchants — available as tender at more stores. Several tech bloggers continue to call for a retail-neutral Facebook Card that consumers can load with money as a gift to be spent at any retailer. Having a card with different amounts set for different places complicates the offering.
BrainTrust
Recent Discussions
Discussion Questions
Why is the sale of virtual gifts (gift cards) working better for Facebook than physical gifts? How do you like the concept of a retailer-neutral Facebook Card for gift-giving?
Poll
“Virtual”
“Flexible”
“Spontaneous”
“Instantaneous”
If you think about Facebook and who is going to be reminded by that medium that it is someone’s birthday, it probably isn’t your mother that you are going to be buying for. Facebook birthday greetings (at least for me) tend to be in the camp of “Oh shoot—I forgot!” or “Darn, I didn’t know that!” Seldom do I go on Facebook to find out if it is my daughter’s birthday. (BTW, if you’re reading, Happy Birthday Court!)
Gift cards are perfect for fulfilling these sorts of gifting occasions. Same day notification and even e-delivery put that perfect “need it today and it fits everybody” spin on the gift that even a cuddly teddy bear just can’t.
I’m now catching up on all these Facebook/retailer endeavors. Of course it makes sense that Facebook wants to expand its revenue base. It would never occur to me that it would want to go into the credit card business such as the retailer-neutral Facebook Card.
I am not surprised that Facebook would opt out of physical gifts when their reason for being is an online phenomenon. Add to that the additional costs and operations capacity, their decision is obvious.
But when I read about all these activities it somehow seems more like scrambling for dollars than a well thought out, long-term strategic plan. However, long term for Facebook could be three months or so. Their advantage (among others) is the agility online provides.
Facebook has the continuing challenge of devising ways to build revenue, and till now, the vast majority of users don’t envision the social channel as an eCommerce vehicle.
Once a larger portion of users participate in Facebook offers (like greeting cards), there will be more opportunities for Facebook to drive more revenue from these products and services.
Since Facebook is the initiator of information such as birthdays, anniversaries, new babies, etc., I can certainly see them being the conduit for gifts. With that being said, as long as FB doesn’t have to be in the fulfillment business, and they get a percent of the sale, there’s likely more bang for their buck.
Send a birthday book to a friend and Amazon delivers. Voila! Win-win
As for the FB card? Right now, I’m not seein’ it!
This is not surprising for so many reasons, not the least of which is that Facebook (and Facebook relationships for many) is more virtual than physical. This is a smart move for FB; its ability is to drive revenue from marketers and to make an entree into the payments space.
It’s not surprising that 3 out of every 4 consumers are frustrated when ads don’t align with their needs and interests. Let’s remember some of the key marketing goals: (1) Know your consumer. (2) Build a relationship and be honest with them. (3) Deliver compelling products/services that address a real need or problem. In my mind this is just reminding of and reinforcing some key things that are easy to forget!
More Discussions
Is Meta Committing to Retail via Meta Lab Stores, or Are Other Goals More Important?
Is Meta playing in retail, actually committing to retail, or looking for more data?Aerie Recruits Pamela Anderson To Highlight No-AI Models Promise
American Eagle’s Aerie banner has recruited former “Baywatch” star Pamela Anderson to broadcast the lifestyle brand’s…How Timely Is the Planned Lowe’s Website Renovation Focusing on Personalization?
Is Lowe’s being timely with its website reno, and is it right to be placed as…
“Virtual”
“Flexible”
“Spontaneous”
“Instantaneous”
If you think about Facebook and who is going to be reminded by that medium that it is someone’s birthday, it probably isn’t your mother that you are going to be buying for. Facebook birthday greetings (at least for me) tend to be in the camp of “Oh shoot—I forgot!” or “Darn, I didn’t know that!” Seldom do I go on Facebook to find out if it is my daughter’s birthday. (BTW, if you’re reading, Happy Birthday Court!)
Gift cards are perfect for fulfilling these sorts of gifting occasions. Same day notification and even e-delivery put that perfect “need it today and it fits everybody” spin on the gift that even a cuddly teddy bear just can’t.
I’m now catching up on all these Facebook/retailer endeavors. Of course it makes sense that Facebook wants to expand its revenue base. It would never occur to me that it would want to go into the credit card business such as the retailer-neutral Facebook Card.
I am not surprised that Facebook would opt out of physical gifts when their reason for being is an online phenomenon. Add to that the additional costs and operations capacity, their decision is obvious.
But when I read about all these activities it somehow seems more like scrambling for dollars than a well thought out, long-term strategic plan. However, long term for Facebook could be three months or so. Their advantage (among others) is the agility online provides.
Facebook has the continuing challenge of devising ways to build revenue, and till now, the vast majority of users don’t envision the social channel as an eCommerce vehicle.
Once a larger portion of users participate in Facebook offers (like greeting cards), there will be more opportunities for Facebook to drive more revenue from these products and services.
Since Facebook is the initiator of information such as birthdays, anniversaries, new babies, etc., I can certainly see them being the conduit for gifts. With that being said, as long as FB doesn’t have to be in the fulfillment business, and they get a percent of the sale, there’s likely more bang for their buck.
Send a birthday book to a friend and Amazon delivers. Voila! Win-win
As for the FB card? Right now, I’m not seein’ it!
This is not surprising for so many reasons, not the least of which is that Facebook (and Facebook relationships for many) is more virtual than physical. This is a smart move for FB; its ability is to drive revenue from marketers and to make an entree into the payments space.
It’s not surprising that 3 out of every 4 consumers are frustrated when ads don’t align with their needs and interests. Let’s remember some of the key marketing goals: (1) Know your consumer. (2) Build a relationship and be honest with them. (3) Deliver compelling products/services that address a real need or problem. In my mind this is just reminding of and reinforcing some key things that are easy to forget!