Will Facebook Be the Mall of the Future?
It’s where teenagers go to hang out. It’s where they gossip. And it’s where more than half a billion people spend a lot of their time.
No, it’s not the mall. It’s Facebook.
So, could the social network also be the place you go to shop?
Christian Taylor, the CEO of Payvment, believes it is only a matter of time.
Payvment launched a Facebook Mall two weeks ago, where consumers can shop among 50,000 retailers and add items to a single shopping cart. Payvment is signing up around 300 new storefronts daily and has roughly 1.2 million items in the mall today.
Taylor doesn’t tread lightly when on the subject.
“Facebook is the perfect storm to become the largest shopping portal on the planet,” he said. “I think it’s a no-brainer that e-commerce on Facebook will be huge. Amazon is so big because of its traffic, and Facebook blows it away.”
Taylor’s interest in social shopping developed by accident.
Pre-Payvment, Taylor was the president of Xcreative Interactive, a company that was building Facebook pages for large entertainment and media brands. He said it was very successful and had huge clients such as Disney and Lionsgate.
But there was one big problem.
The pages would always garner millions of fans, “but we could never get them to buy a DVD or a movie ticket. It was very hard to convert off the network,” he said.
That’s when they saw an even bigger opportunity to build e-commerce services for small and medium sized business. The employees voted to shut down the company and move from New York to Palo Alto.
That was almost two years ago.
After the move, it developed a framework that allowed companies to build e-commerce capabilities into their Facebook pages as a separate tab.
While it attracted thousands of merchants, he said there was a problem with that, too.
“Even if you have 5,000 fans, at the end of the day, you are only selling to 5,000 fans,” he said. “It took us four months to discover that there’s something wrong here. You needed a way to be discovered.”
Enter the mall and the single check-out experience across multiple brands.
Already, the difference has been noticeable, Taylor said.
Before the mall went live on Feb. 24, about 3,000 of its 60,000 merchants were regularly selling items, or roughly five percent. “When I tell you it was night and day, I can say that [sales] quadrupled the day we flipped the switch on the mall.”
Should Amazon or other e-commerce leaders be scared of Facebook’s ability to garner a very large audience?
Taylor: “If they are not, they should be.”
“The really scary part for the old regime should be that people return to Facebook daily and spend more time on Facebook than any other Web site on the net….We are turning Facebook into the largest shopping mall on the planet.”
The threat is clearly not imminent. Today, Amazon, eBay and other retailers that have gone online, like Best Buy and Target, have large audiences themselves.
They are also experimenting with ways to make shopping more social, as we’ve reported before, but generally e-commerce has failed to become very social yet.
However, Payvment believes with the social graph acting as the center of the shopping experience, it can take it to another level. Visitors to the mall “like” individual items to surface them to the top. It’s also much easier to shop for a birthday or Christmas.
So far, Payvment’s Shopping Mall on Facebook has attracted 9,015 monthly active users and 568 “likes.” While Payvment claims to work closely with Facebook, it has no direct ties or arrangements with the social network.
The company also doesn’t make any money yet.
Its platform is entirely free, and anyone that adopts the platform right now will be grandfathered in for life. In return, they are asked to provide feedback.
To date, the company has raised $8 million in capital from Sierra Ventures and BlueRun Ventures. It has 20 employees.