Facebook recently announced the addition of Facebook Gifts to its platform. This new feature, which will roll out in the upcoming weeks, will allow users to send a selection of real gifts to their Facebook friends. Of course, actions are connected with Facebook’s social features. When a gift is purchased, the gift giver can choose whether or not to share a gift on the recipient’s timeline. The gift receiver will be asked to provide a shipping address and is also allowed to exchange it for another item of equal or lesser value (the original item will still appear publicly even if a switch is made).
Facebook recently announced the addition of Facebook Gifts to its platform. This new feature, which will roll out in the upcoming weeks, will allow users to send a selection of real gifts to their Facebook friends. Of course, actions are connected with Facebook’s social features. When a gift is purchased, the gift giver can choose whether or not to share a gift on the recipient’s timeline. The gift receiver will be asked to provide a shipping address and is also allowed to exchange it for another item of equal or lesser value (the original item will still appear publicly even if a switch is made).
Facebook’s stock is hovering around $20 and investors have been expressing concerns about revenue sources since even before its IPO. Considering that Facebook’s primary source of revenue is their ad platform, Facebook Gifts is a great way to diversify their revenue stream. Whereas Facebook Ads are used mostly by businesses, Facebook Gifts will be mostly used by regular individuals. Facebook’s cut on each transaction has not been revealed, but the cost of gifts is reported to be anywhere from five dollars to hundreds of dollars. The social nature of the gifting process on Facebook means that most frequent users will become aware of the feature in a short amount of time; each gift sent is a social media marketing advertisement for the gift platform itself. I also expect brands that are willing to offer exclusive deals or products on Facebook will receive the most traction.
Users like spending time on Facebook, but they do not like spending money on it. A potential hurdle will be convincing users to initiate a transaction on Facebook. Many large businesses like Gap and GameStop have closed their Facebook stores earlier in the year due to low sales, and Facebook commerce (commonly dubbed “F-Commerce”) has not taken off as initially expected. On the plus side, Facebook Gifts is more casual and rooted in the social realm than businesses’ Facebook stores. Perhaps gifts will convince Facebook users to open up their wallets.
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