Something that began as innocent and informal socializing among college students has turned into a very serious platform, for e-commerce.  Facebook is becoming a viable business model, still in its infancy, granted, but nevertheless very promising. Let’s look at the big picture.

One of the more recent developments is that the demographics of Facebook users is shifting. Originally composed mostly of very young users, today member in the 25 to 35 age group are leading the pack. This makes the platform more attractive as this demographic is the most commercially active on the Net. Add to this pre-canned shopping cart solutions like Payvment, which eliminates the need to write any custom code for your online shop, and you no longer have an excuse to not try.

Narrowing down your constituency and knowing exactly who your visitors are, has always been a problem. Since the first days of online shopping we started working on ways to determine the demographics of our customers and channel them accordingly. The range of solutions spans from simple cookie-based tracking to third-party research firms that will analyze your traffic, capture clicks and embed surveys. Even though the latter gives you a fairly accurate picture, is far from cheap, and is often only cost effective to big players.

Facebook attempts to level the playing field. By putting your retail front-end on Facebook, as the theory goes, you solve this problem once and for all – on Facebook you always know who your visitors are. Something that required a great effort and expense comes for free. However, this new platform calls for a different and nuanced approach to earn your new clients business.

We’re basically dealing with a reverse paradigm: in a classic online store, we don’t know who is looking at our site, so it needs to be generally attractive, with convenient ways for any potential customer to drill down to what is interesting to them.  On Facebook, we already know who we’re dealing with, so we need to address customer needs and desires specifically, not generally. This I believe means to do away with a classic one-fits-all design. We don’t need a site as such, but rather a view that suits the person we know just landed on our page.

Secondly, the fact that Facebook people are there to socialize, not to shop, the shopping experience needs to respect that fact and leverage it as much as possible. Besides obvious things like user’s physical location and age, previously unknown data such as the customers interests and traveling habits, Facebook API allows to fetch any user’s friends list. This fact opens up a wide range of opportunities.

1. Personalized recommendations based on demographics, beliefs, and activities, likes and dislikes as they are revealed in the Facebook profile.

2. For businesses, personalized recommendations based on occupation, industry, and title.

3. Personalized products that incorporate media from Facebook, like memorabilia, picture books.

A good example of this type of application is the Gifting application embedded in some birthday reminder apps on Facebook. These apps remind people of their friends’ birthdays, enable sending an electronic birthday card, and suggest sending a physical gift. Can the product suggestions be more targeted? Yes.

The potential hasn’t been fully explored yet since this all is so new. We need to look into a completely new way of engaging potential customers.  Even the highly targeted audience by itself turned out to be not enough. Facebook launched its ads engine in November 2007 but it hasn’t yet yielded the kinds of returns that Google’s relevant ads do, despite the belief that ads on Facebook are any advertisement team’s dream-come-true. We need a different design approach, a new breed of a Web application that revolves around social interaction.

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