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Why Facebook Gifts Could Be the Next Power Move in Social Commerce

By , November 9, 2012

Next Thursday, the tech press will gather at FAO Schwartz in New York to hear Facebook discuss retail partnerships and Facebook Gifts, the revamped feature it announced in September. Facebook Gifts is the platform’s latest push toward commerce and one that puts purchasing on Facebook directly into user’s hands.

Users can buy and send real, physical gifts to friends by accessing the feature through a friend’s profile page or when an event occurs, such as a birthday. Friends can choose products like flowers, chocolates, Starbucks cards, and hundreds of other products ranging from Uber credits to cookies. It’s simple, it’s straightforward, and by all accounts easy to use.

Previous incarnations of social commerce, particular “F-commerce,” included full storefronts for purchasing items directly on the site. Although successful in some cases, they were phased out by some top brands because they weren’t producing as much ROI as anticipated. Often these were cordoned off storefronts that weren’t actively wrapped into the social efforts happening by the brand and not integrated into other activity happening on the site.

But there’s a distinct difference between this version of F-commerce and the idea of Facebook Gifts that makes this an exciting feature: People. Facebook stores, although housed within a social network, rarely felt engaging and unique enough to solicit browsing and shopping. But Facebook Gifts is fully integrated into the social experience; it’s wrapped into the social graph that connects each person on the social network. See a notification of a friend’s birthday and send a gift immediately. Surprise a friend with a gift after she gets a new job. Connect with people you interact with online and send them a gift – even if you don’t know their physical address. And bonus: send gifts via mobile, now that Facebook’s latest iOS app update includes this capability.

Facebook Gifts has the added element of true social context. This, coupled with the simplicity that all loved and actively used features possess, means it has incredible potential. If this formula turns out to be successful, then Facebook has scored a huge win in two possible ways: revenue and data.

The potential for revenue generation is palpable, and it couldn’t come at a better time. With pressure from investors post-IPO to generate more revenue, Facebook Gifts is a promising non-advertising revenue stream. Tie-ins to its advertising products could also help make the leap from a Like to a sale. (Think a Sponsored Story that promotes that a friend liked a Page, then a prompt to send that friend a gift from that brand through Facebook Gifts.)

Another boon to Facebook? The data that comes from knowing what types of gifts users and their friends are receiving and purchasing. Offering companies advertising targeting options based on this data help both brands and Facebook. Plus, offering brands participating the Facebook Gifts program insight about the customers who are purchasing in this way will be nothing but helpful for companies that are in many cases continuing to struggle with measuring social ROI.

On a related note, Facebook Collections, a feature tested briefly by Facebook in October that would offer a Pinterest-esque feature for users to click “Want” and “Collect” buttons on products posted by brands, is being built out by Facebook now, according to TechCrunch. This commerce-related update might also be a data goldmine. It could be a success in other ways, too, if social discovery and the social graph are integrated wisely.

Could Facebook Gifts be a golden feature – one that makes users, brands, investors, and Facebook happy? If so, it’d be one of the biggest gifts Facebook has given itself in a long while.


  • Sanjay Abraham

    Very interesting! All are too eager to write the obituary of social commerce based on some reports which have reported 0 sales from social media during recent past which is further plummeting every year. Social gifting when enabled with ‘discovery’ could be a game changer not only for FB and the industry too.