Do Facebook and Twitter Need a Logistics Strategy?

Last month, Twitter announced that it was testing a new feature: the ability to embed a “buy” button within posts to let users buy items with just a couple of clicks, without leaving the Twitter app. According to a New York Times article:

The feature — initially limited to mobile versions of Twitter and aimed at selling limited-edition or time-sensitive items like T-shirts and event tickets — could eventually create a new revenue stream for the social network, which currently relies on advertising for virtually all of its income.

Social networks…see e-commerce as a potentially huge moneymaker. All of them are experimenting with ways to make it easier to buy directly from their sites, but so far none have introduced purchase technology on a wide scale.

Facebook also started experimenting with a “buy” button back in July. Here are some details from a TechCrunch article:

Rather than clicking away to a merchant’s site, the Buy button lets you complete the entire purchase flow within Facebook, which could boost conversion rates and endear retailers to the social network. You can use a credit card you have on file with Facebook, enter new payment details and save them for future use, or just checkout and not store your payment info.

By shaving down the time and effort from interest to purchase, Facebook could get more people plopping down cash for e-commerce purchases. That’s something retailers might be very willing to pay for.

No doubt, the e-commerce and social networking worlds are rapidly converging, but is facilitating buying enough? Do Facebook and Twitter (as well as Pinterest and others looking to get more involved in e-commerce) need to take the extra step and facilitate order fulfillment and final delivery too?

I believe they do, either directly or via partnerships, because what happens after the “buy” button is clicked – the logistics of e-commerce — matters more today, and is more complex, than ever before. Simply put, e-commerce no longer exists in a vacuum; it is part of the broader omni-channel retail experience, where new fulfillment models such as ship-from-store, same-day delivery, and order online/pick-up-at-store are becoming increasingly important for both retailers and consumers. The “buy” button will become (or is already) a commodity, whereas logistics is the new battleground for differentiation, innovation, and winning the customer.

I believe they do because the other heavyweights in the industry are already moving in that direction (see Google with Google Shopping Express, eBay with eBay Now, Uber with Corner Store, and Amazon with Amazon Fresh Express, its expanding private fleet, and more recently, its planned brick-and-mortar location).

I believe they do because with their global presence and scale, Facebook and Twitter arguably have the greatest opportunity to enable cross-border e-commerce – that is, the ability for a consumer in one country to buy from an online retailer in another country. However, as I discussed in a recent post, many online retailers, especially small and midsize ones, lack the internal expertise and technology to make cross-border e-commerce work, so Facebook and Twitter would have to make investments in this area or establish partnerships to provide this value-added service.

The bottom line: Social networks like Facebook and Twitter are evolving from marketing platforms for retailers and manufacturers to e-commerce enablers, which is creating new revenue opportunities for them, and providing consumers with enhanced value and convenience. But I believe social networks need to go beyond the “buy” button to where e-commerce meets the physical world — that is, the world of logistics — to deliver even greater value to retailers, brands, and consumers.

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