Facebook is a virtual community where users can interact, play games, grow virtual crops, and even give each other gifts. With more than one billion users worldwide, Facebook might just be the most powerful network at present. This year, gift giving goes from virtual to real as the world’s leading social media company launches its Facebook Gifts - a feature that allows users to buy and send real gifts right to their friends’ doorsteps.
Long time users of Facebook may remember the Gift Shop application - a feature that allowed users to send virtual gifts such as cupcakes, teddy bears, and even troll dolls. The app folded in 2010 as Facebook opted to focus on other features that were more popular with users, including Inbox, Photos, News Feed, the “Like” button, and the Wall. Though some of the changes were unpopular (such as the switch to Timeline, which received a lot of complaints), users were generally happy with the improvements.
Entering the E-Commerce Zone
Now, Facebook Gifts is the company’s first foray into e-commerce following its purchase of Karma - a social gifting app – in May 2012. Users can now purchase gifts without leaving the social networking site. Unlike other gifting apps like Wrapp and Gyft, Facebook ties the Gifts app to its birthdays and events reminder app – making this a useful last-minute resource for the site’s many users.
The process works quickly, reminiscent of its virtual predecessor Gift Shop. Just click the gift icon, choose a recipient, and pick a gift – it’s a simplified system that makes gift giving almost as easy as sending virtual cupcakes. With an e-commerce system that promises to be as painless as a ubiquitous Facebook “poke,” the company might just have a winner on its hands.
Users can choose from a wide array of products as Facebook has tied up with more than one hundred retailers in the United States, including Starbucks, Magnolia Bakery, Happy Socks, and 1-800-Flowers. Redemption is quick and painless as automatic notification allows the recipient to “accept” and make changes to the gift prior to receiving the actual item – a feature that should prove useful to both givers and receivers. Recipients also have the option to swap their gift for a different but similarly priced item – all without alerting the sender.
A Logical Feature for Users
Given the nature of some of its applications, Facebook has assured its users that Gifts is designed to be unobtrusive. Other apps – especially online games – are often peppered with unwanted ads. Gifts, however, is seen as a natural extension of the social networking site’s philosophy, which is to improve interaction and maintain close contact between friends. It’s a logical follow-up to the fact that users already rely heavily on Facebook to greet friends on special events like birthdays, weddings, or anniversaries. Adding the option to send gifts quickly and easily is just a bonus.
In fact, the company has reiterated that the Gifts app really is geared towards its built-in user base, the majority of whom are based in the United States where the app is soon to be made available. With more than one billion current users, the app stands to increase the company’s revenue even as its income from mobile games declines. Should Facebook choose to rollout Gifts to the rest of the world (it’s currently for the United States only), the app just might be an e-commerce game changer.
Indeed Facebook is expected to increase its earnings thanks to the Gifts app, though it is still unclear how much the company is getting from the revenue split with the retailer. Regardless of the percentage, Facebook stands to gain as it attempts to take its place in the online gift market, which is worth approximately $38 billion annually. Facebook also seeks to maintain brand control as gifts delivered to recipients are packed in a Facebook bag.
The Question of Privacy
Despite the significant potential income of Facebook Gifts, the company still has to contend with privacy issues. Given that Facebook has come under fire in the past due to privacy concerns, the Gifts app is likely to be scrutinized and analyzed before it even launches. At this point, security specialists like Bogdan Botezatu are already questioning the security of the Gifts app, as well as Facebook as a whole.
The Gifts app requires users to provide their complete name, home or office address, phone number, and birthdays. Even more alarming – Facebook’s foray into e-commerce means it will also require the user’s credit card number to complete gift-giving transactions. As it stands, the need for disclosing sensitive information may rub users the wrong way and affect the popularity of Facebook Gifts.
The Future of Facebook Gifts
Facebook Gifts has the potential to be another successful feather on Facebook’s cap, since it is a feature that many loyal users will definitely take to and use immediately after the launch. However, without addressing the privacy concerns, the company may find the app a flop. E-commerce is a different ballgame entirely, and though users may normally be lax in terms of sharing their vacation photos and birthday greetings, the security of their credit card numbers in the hands of Facebook may be a deal-breaker.
The company will have to address these concerns before Facebook Gifts can fulfill its potential and change e-commerce as the world knows it.
About the Writer
Jamie Cody is a writer for centernetworks.com and often writes about technology and reviews on various on hosting providers such as fatcow. Fatcow is powered by 100% wind energy, so you know they are eco-friendly and that says a lot about them.