Technology has been good to 1-800-Flowers. The company has long pioneered new ways of retailing, a toll-free number, direct sales via the internet. So when, in 2009, it opened its online store on Facebook the company was expecting another tech-based success. Like many others they found Facebook was a tough sell.
“We were one of the first to actually have a Facebook store, and we did have big expectations, but it turned out to be not very successful,” recalled Jon Mandell, vice-president of marketing at the flower and gift seller.
That, in short, is the story of e-commerce on Facebook. For all its success building an ad juggernaut, the social network has never become the online shopping emporium once predicted. Instead, its retailing initiatives have been marked by a string of stumbles. Now it’s back with another attempt, perhaps its most ambitious of all.
Past performance has not been encouraging. Besides the Facebook store program of several years ago, other ventures have included Facebook Gifts, an online gift shop that was shut down in 2014 after a couple of years. More recently, Facebook has been testing “Buy” buttons in newsfeed ads but they don’t appear to have caught on.
“It’s no stretch to say that commerce is Facebook’s white whale,” said Jordan McKee, a senior analyst at 451 Research. But in the hunt for elusive e-commerce success, the company is looking to Facebook Messenger – its hugely popular messaging app – to change its fortunes.
To that end, Facebook in April introduced chatbots – software meant to simulate ordinary conversation for tasks like providing customer service – in Messenger. Earlier this month, Facebook said developers had built 30,000 bots to date. Along with 1-800-Flowers, Uber and CNN were among the initial companies or brands creating bots.
Bring on the bots
This month Facebook added e-commerce capability – allowing Messenger bots to accept payments without requiring users to leave the app. People with credit card information stored with Facebook or Messenger will be able to make instant purchases within the bots of their favorite stores and services. Messenger also supports third-party payment options such as PayPal and Stripe as alternatives.
For now, the payments feature is in closed beta testing with a limited number of companies in the US including shopping app Spring and travel site Hipmunk. Facebook plans to roll out payments more widely by year’s end.
With a billion Messenger users and thousands of bots built already, the e-commerce opportunity is potentially vast. But there’s reason for skepticism. For one thing, the Messenger bots are still at an experimental stage, with many proving less than user-friendly at launch.
Even David Marcus, who heads Facebook Messenger, has conceded bots’ capabilities haven’t matched their app or mobile web analogs. To address shortcomings, Facebook this month unveiled other new features including adding web views to bot conversation threads to augment text interactions.
1-800-Flowers’ Mandell is optimistic about so-called conversational commerce, but noted both businesses and consumers are still figuring out chatbots. “For the most part, we’ve just been learning,” he said. “I think this is very new to the US-based audience.”
The 1-800-Flowers bot provides both human and automated options for customer service and allows users to order flowers and gifts and pay through the Stripe service.
Mandell wouldn’t say how many users or orders the bot has drawn so far. But he added that 70% of e-commerce customers are new to the company, and users skew younger than its customers overall.
He anticipates the new payment feature will make buying even more seamless by allowing people to use card information on file with Facebook to make purchases. “That means it’s much quicker, and you don’t have to leave Messenger to complete the transaction,” he said.
How will people pay?
But that points up another hurdle: Facebook hasn’t collected card information from many of its 1.7 billion users to date. “They’re not Amazon or PayPal,” said Jason Goldberg, a retail expert at digital agency Razorfish. That’s in part because Facebook’s history of high-profile privacy lapses has undermined user trust.
“Facebook doesn’t stand out as a player consumers would trust when it comes to payments and [digital] wallets,” said Thomas Husson, a marketing and strategy analyst at Forrester, based on the research firm’s consumer surveys.
The company itself declined to say how many users it has payment credentials for. In its annual report filed in April, though, it stated, “a relatively small percentage of users have transacted” via its payments system.
“Facebook has an uphill battle to get millions of consumers to trust them with their credit cards,” said Goldberg.
WeChat, the dominant messaging app in China, is often mentioned as a model for Facebook Messenger when it comes to commerce. Among its 800 million active users, an estimated 300 million use its payment service – WeChat Pay – to transfer money to other users and make payments to online and offline businesses.
A recent study of WeChat by user experience consulting firm Nielsen Norman Group found a smooth user experience and tight integration with other app elements, including its e-commerce platform, helped explain its popularity.
Raluca Budiu, director of research at Nielsen Norman, questioned, though, whether Facebook Messenger can replicate WeChat’s commerce success. That’s partly because external factors – -like credit cards being less common in China – have made WeChat especially vital there as a way to pay for things and connect with businesses.
Faced with more competition from other apps, online services and payment methods, Messenger will have to rely on “stellar usability” to foster commerce, she said.
Even so, Husson argues in a new report that messaging apps generally won’t become “mega marketplaces” for retailers. “Instead, they will work best for a limited number of selected and customized offerings,” he wrote. As an example, he pointed to Canadian insurer Manulife, which sells only five financial products on WeChat.
For its part, 1-800-Flowers plans to add Messenger bots for its other brands including Harry David, Cheryl’s and Fannie Farmer. “Customers decide how they’re going to use these things, and ultimately, who’s going to win,” said Mandell. “We just want to make sure we’re there.”