Trying to Define the Opportunity for Commerce on Facebook

Earlier this week, we wrote about how Payvment had launched a Facebook Mall, where consumers can shop among 50,000 retailers and add items to a single shopping cart.

The day the mall went live, Payvment said its customers’ sales quadrupled, compared to sales when they were limited to a shopping tab on their individual fan pages.

Now, Payvment’s competitor, Adgregate Markets, which also helps brands build storefronts on Facebook, is releasing data that helps define the size of the opportunity for e-commerce on Facebook.

In a study commissioned by Adgregate and conducted with the help of Webtrends, Adgregate looked at the impact of Facebook fan pages on traditional e-commerce sites.

To be sure, the idea of social commerce is so new, it’s difficult to give too much weight to early studies like these, but because everything on the topic is unknown, it’s worth taking the data into consideration.

Generally, what Adgregate found was that Facebook was generating a ton of visits to brands’ Facebook pages, providing an opportunity to convert the traffic into sales, especially as brands see visits to their traditional web sites shrink.

The study highlighted one example. Delta Airlines recently enabled customers to book tickets directly on its Facebook page. While traffic to Delta’s site lost more than a million unique visitors over a three month period, its Facebook page gained more than a 1,000 new fans.

The study analyzed the unique visits to the websites of the Fortune 100 as well as their Facebook fan pages.

    From Adgregate’s customer base, the study makes a number of conclusions:

• Following the launch of a Facebook store, wall posts generate on average 1,673 percent spikes in store traffic.

• Facebook stores on average generate a 17 percent social engagement rate (merchandise “likes” and “shares” per visitor).

• Facebook stores generated on average 5.9 pages views per visit.

• Facebook commerce conversion rates range from 2 to 4 percent, which is on par with e-Commerce websites.

• Average order value of $104 with 24 percent growth month-over-month (although this largely is dependent upon retail vertical).

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Just as the atom bomb was the weapon that was supposed to render war obsolete, the Internet seems like capitalism’s ultimate feat of self-destructive genius, an economic doomsday device rendering it impossible for anyone to ever make a profit off anything again. It’s especially hopeless for those whose work is easily digitized and accessed free of charge.

— Author Tim Kreider on not getting paid for one’s work