Despite their obvious potential in terms of converting ‘likes’ received by brands on their Facebook pages into sales, the concept of Facebook ‘stores’ appears to be floundering. According toBloomberg, Several large companies, such as Gamestop, J.C. Penney and Nordstrom, who had earlier opened Facebook stores, have since closed them, citing a lack of return on investment (ROI).
According to Ashley Sheetz, who is vice president of marketing and strategy of the Texas-based marketing company Grapevine, Facebook stores do not work because purchasing online is already convenient: “We just didn’t get the return on investment we needed from the Facebook market, so we shut it down pretty quickly. For us, it’s been a way we communicate with customers on deals, not a place to sell.”
Sucharita Mulpuru, an influential analyst at Forrester Research in Cambridge, Massachusetts, explains the problem thus: “There was a lot of anticipation that Facebook would turn into a new destination, a store, a place where people would shop. But it was like trying to sell stuff to people while they’re hanging out with their friends at the bar.” In the context of its imminent IPO, the news throws Facebook’s failure to explain how it will convert its overwhelming dominance of online social space into hard cash into sharp relief.