My Thoughts on Technology and Jamaica: Facebook kills Gifts and presses Buy Button - How Facebook One-Click Purchases will start an Apple-esque Smurfberries-style Scandal

Monday, August 18, 2014

Facebook kills Gifts and presses Buy Button - How Facebook One-Click Purchases will start an Apple-esque Smurfberries-style Scandal

“The more people buy online, the more people buy things they discover through their mobile phones, the more people discover things from a News Feed and go on to purchase, the more important we are in driving ecommerce and I think we are increasingly important. That doesn’t mean we’re going to or have to sell products.”

Facebook COO Sheryl Sandberg commenting a recent Facebook Shareholders Earnings Call on the importance of Mobile E-Commerce to Facebook

Facebook had killed off their Gift Giving services where you could buy physical gifts. This service was launched in 2012 via the purchase of a company named Karma that they’d purchased back in May 2012 as reported in my blog article entitled Facebook acquires Karma and goes into Social Gifting - Six Degrees of Separation and The Perks of Being a Wallflower”.

In so doing they’ve erased any chance to become Amazon in spectacular fashion.

However, they’re re-focusing more on their “Buy” button service that’ll allow anyone to by any product they see without leaving Facebook as mentioned in the article “Facebook Gifts is laid to rest”, published July 29, 2014 7:08 PM PDT by Dara Kerr, CNET News. They’re also working on some other goodies for the Mobile crowd that dislikes punching in Credit Cards on their smartphones:

1.      Autofill with Facebook
2.      Multi-Product Ads
3.      Custom Audiences
4.      Offline Sales Measurement

Apparently buying physical product via Facebook, effectively making them a kind of Amazon for Mom and Pops as explained in “Send your Facebook Friends real gifts through their Timelines”, published September 27, 2012 2:07 PM PDT by Donna Tam, CNET News, just wasn’t working in Facebook’s favour.

Most likely the sour notes were emanating from Facebook, as many Facebook regulars disliked these cheap gifts and creating a bad association with Facebook’s premium Social Messaging Brand, as it looked as if they made their products. That and the fact that there is a bit of logistics involved with handling shipping and who’s-to-blame- situations if a product is faulty or a customer wants to return a product.

Clearly Facebook Gifts wasn’t making money.

Facebook Gifts – Concept gets the Kibosh as Facebook focuses on Buy Button to increase Transactions

So they idea eventually got the kibosh only to be replaced with just selling gift cards as noted in “Facebook stops peddling physical gifts (no one wants)”, published August 23, 2013 2:53 PM PDT by Jennifer Van Grove, CNET News. That’s now dead too, being replaced by this “buy” button.

Apparently their purchasing interface probably wasn’t as slick as that of Amazon’s. So they’ve decided to simply spruce it up with the Buy Button is which is the same thing, just that you won’t leave Facebook to do so. This suggest that this may be some kind of Mobile One-Click Purchase service i.e. you pre-register your Credit Card with Facebook and then you click on the item you wish to purchase on your smartphone.

Facebook is also launching an Autofill With Facebook that stores Pre-loaded information about your Credit Card that'll make One-click purchases a reality. That information they're collecting to enable their payment gateway is aptly described in my blog article entitled How Jamaicans can set up a Payment Gateway in order to process Credit Card purchases - E-Commerce the main Catalys for Increasing Jamaica's Internet Penetration” and is as listed below:

1.      Sixteen (16) Credit Card Numbers
2.      Expiry Date
3.      Three (3) digit CVV Code
4.      Personal information for the Customer i.e. Name, Address, telephone number

Facebook is also doubling up...or tripling up, depending on how you see it, on advertising. Now Ads on Mobile will scroll sideways with multiple advertisements from different advertisers in a manner similar to the way products are stacked on a shelf in a store. 

Nice idea if it works, as scrolling up and down on a smartphone is a little confusing at times; maybe some sidescroller action would make it easier and a lot like using an Amazon Kindle Fire Tablet for shopping as noted in my Geezam blog article entitled “Amazon is Legally Blonde as the Kindle Fire HD Upgrade is CEO Bezos’s Confessions of an Online Shopaholic”.

Facebook isn't stopping at just making shopping on your smartphone a lot more convenient. It's also trying to reposition itself as a means of marketing product to drive offline shopping too as well as help businesses with a Facebook Page to drive offline purchases as well as noted in “Facebook Is Shutting Down Gifts To Focus On Its Buy Button And Commerce Platform”, published July 29, 2014 by Josh Constine, TechCrunch.

To this end, they're using a service called Custom Audiences to gather data metrics they've learned from their failed venture as well as current browsing habits base on metadata from cookies when you log in to track you online shopping or browsing related habits.

Then armed with that data, businesses with Facebook Pages can have marketing prompts sent to these casual browsers email’s or Social Media Profiles persuading them to buy their products.
This is really spam, but then again Amazon does the same thing in their Email as well as on Twitter as any frequent users of Amazon would tell you.

This translates to good business for Facebook overall, as if they can then track these purchases and prove that persons are buying more thanks to their Facebook Pages and advertisings on Facebook, businesses will buy more Ads.

Already even on my desktop Facebook interface, the drop down button now has an option to create a Page and place Advertisements, as Facebook is getting more aggressive with making money from businesses setting up Pages and buying Ad on Facebook.....just like Amazon or a newspaper.

Facebook Buy Button for Mobile – Facebook may face a Smurfberries-style Scandal similar to Apple

Facebook is trying to monetize their popularity in a manner similar to Amazon, who only recently launched their Amazon Fire smartphone that’s a shopaholic magic wand as opined in my Geezam blog article entitled “Amazon Fire is a Volkswagen for Amazon Prime subscribers that’ll drive shop-on-the-go Online Obsession”.

Something tells me that this “buy” button is going to end up like the Smurfberries scandal of Apple. For a bit of context, this involve a Smurfs game where you had the option to buy smurfberries to progress more quickly in the game and go higher in the game Levels as noted in “Apple to refund at least $32.5M for kids' in-app purchases”, published January 15, 2014 9:24 AM PST by Lance Whitney, CNET News.

Unfortunately, once you’d decided to enable the one-click option, it basically charged your credit card, even if you weren’t the one playing the game and especially if your child knew your password to enable payments for the Credit Card that you’d pre-loaded onto your Apple iPhone.

This “Buy” button is the exact same concept, except that you’d also have to specify where you want the item to be shipped, information that may also be pre-loaded into the smartphone or Tablet. 

Thus Facebook hasn't really killed Facebook Gifts. Rather they've realize that they make more money by encouraging businesses to set up Facebook Pages and buy advertising than selling items themselves that was giving them a bad rap.

But in the long run, they may end up getting smurfberried in their bid to make their Stock Price pop.

No comments: