BrainTrust Query: Why Facebook’s New ‘Timeline’ Could Change Retail Forever
Through a special arrangement, presented here for discussion is a summary of a current article from the Retail Prophet Consulting blog.
At last week’s F8 Conference in San Francisco, Facebook announced a complete overhaul to the user profile page with the advent of what it’s calling "timeline."
Fast Company’s E.B Boyd characterized timeline as "a scrapbook on steroids" of the user’s life. Events, relationships, photos and video will populate an individual’s timeline, creating a living memory of their entire life.
Moreover, within timelines, users will be able to find, share and even purchase digital content such as music, books and movies. Â So, for example, if a friend of yours likes a movie, the functionality will exist for you to purchase and download that same movie instantly from an Apple-esque app store that will reside within Facebook.
Although Facebook founder and CEO Mark Zuckerberg refrained from commenting on the revenue model of this service, it doesn’t take advanced math to calculate the profit potential, especially when each calculation begins with 700,000,000+ users!
This leads to the broader question: If I can buy a song via my timeline or a friend’s timeline, why not a vacation, a TV or a gym membership? If I can buy digital content, why not products and services, like house cleaning or landscaping? And all from the convenience of my profile page. In other words, rather than looking for the things I want, could the things I want find me?
I, for one, believe the simple answer to all of this is "yes". The only remaining question is when? And while the timing may be up for debate, what is certain is that the foundation for a functional, real-time and socially powered marketplace has been laid. And for all those retailers who have been questioning the value of Facebook for revenue, you may be about to get your answer.
Discussion Questions
Discussion Questions: Does Facebook’s “timeline” have the potential to change retail forever? How would rate its revenue potential?
In short — totally agree. We’re moving toward “constant commerce” on a lot of fronts — whether it’s instantly purchasing an outfit I see in a magazine on my iPad or the various FB examples listed here. FB has a huge social shopping opportunity but as laid out here in the near term it’s probably more heavily tilted toward music and books: much like Amazon’s early days: it’s low risk, you don’t need to touch and feel and it’s high impulse. In short, it’s a huge opportunity for which Facebook is uniquely suited.
The new technology continues to tell me how far behind I am in being able to grasp some of it. This sounds incredible; and if Facebook is behind it, it will be successful. Facebook is like the “Zen Master” to many of the faithful followers. What I don’t know (among a lot of other things) is the effect it will have on traditional retailers. What I do know is it will take too long for them to realize what is happening and alter their course for cloud business.
The world is my oyster and it’s all on my Facebook profile page to buy, and what’s even more powerful, I can buy what is already personally used and endorsed by my friends. Yes, it’s a major development for e-commerce, retail, and yes it will have impact on how goods and services are sold. I see the light.
I’m hearing more complaints about the new facebook layout than kudos. This new timeline feature looks like more bloat for facebook and until the actual users (read: customers) get used to it, retailers won’t see immediate benefits. The problem lies in the default settings and how they are managed.
I’m sure this will work, and be one of the next “big things.” I don’t know if Lisa coined it, but I love the term “constant commerce” because that’s where we appear to be. 24/7 ‘personalized’ sales pitches for something, not that anything is wrong with that. 😉 But, as we approach a possible double dip recession, I wonder when/if consumers will say “enough.”
I guess the answer to the first question is “Yes, it has the potential,” but the real question is the size of the prize.
The problem with social networks is that they are constantly evolving and inherently anarchistic.
I suspect that not so many years ago we could have had the same discussion about MySpace or SecondLife and if we had we would have undoubtedly over-estimated their potential.
Doron has put his finger on the problem. Facebook isn’t responsive to customer opinion; it’s dictatorial. Changes are made and if the users don’t like them — well too bad for the users.
So, in a perfect world could a social network essentially become the dominant thread running through one’s social and consuming life?
Sure, but it’s not a perfect world.
Well thought out and provocative piece, Doug!
If facebook does all the work and arranges all the deals, the revenue potential will start small and grow to medium. If facebook encourages users and third parties to take a piece of the action in exchange for arranging offers and supporting the selling process, then I believe we’ll see almost limitless opportunities for people to bump into things they want. The risk of offering development moves to third parties and the quality decisions will be made in public.
Here’s the really interesting area (to me)…I believe that facebook will be better poised than any other platform to mix and match products and services on demand. For example, “Loved your vacation photos Joe, I’d like to take that vacation too!” which might lead to air, ground transfers, hotel, theatre tickets, t-shirts, excursions, that cute little magnet for the refrigerator, etc. — all in one unique and customizable package.
Facebook has already changed retail forever.
The thing the company has to be careful of is over complicating its site any further. More than a few people have “dropped out” since the new Newsfeed interface was introduced.
The ownership of ‘data’ and how it is monetized is often discussed in these discussions. Facebook’s introduction of ‘Timeline’ will be a very, very profitable design. I am amazed at the amount of ‘data’ people willfully hand over to Mr. Zuckerberg and Facebook. I would invite anyone to carefully read the fine print in Facebook’s terms and conditions that 700+ million people have agreed to when they signed on to Facebook. Effectively you willfully and freely give the rights to everything you post to Facebook! I wonder how many people would ‘LIKE’ this?
We usually don’t see such tabloid title exaggerations here. What happened?
I think this is bunk. The mythology of social media change is increasing in stridency. What that suggests is that the results aren’t there. (Generally media advocates temper their language over time and failure to do so indicates a flavor of desperation.)
Is Facebook important? Absolutely. Will it change the face of retail? Nope. Studies showing it’s impact lead me to conclude it’s just a new version of Green Stamps — where the primary motivating message is “30% off.” (Go read the studies. That’s the commercial impact they show. Of course the personal impact is far different.)
And a killer feature called “timelining” won’t change that.
Each new innovation is changing the retail landscape and this one will too. How much? It depends. On the one hand there is a demand for “constant commerce.” On the other hand, some users value privacy. In the end, the point Ryan made is an important one — if Facebook gives consumers what Facebook wants rather than what consumers want, the appeal will last only until another network gives consumers what they want.
Sounds like Facebook is upping the ante on the social commerce model. The only hesitancy I have about this is that social media appears to have little impact on the path to purchase so it is unclear to me if people are willing to see Facebook as a shopper environment.
This effort represents a sure step in the evolution of virtual retail, which is here to stay and only in its beginning. Those waiting for the end product of this electronic process will surely fail. In the land of information technology, nothing lasts long due to the “bigger, better and faster” way of life.
This will work for the simple fact that most product discovery and purchases start with word of mouth — friends and family. I will download a song suggested by my wife much faster than from any other source.
One thing I would be curious to understand is whether retailers get the data from Facebook on who is downloading what. Sharing data is still something most are not ready to do. Will FB share the data? If so, it can make retailers much stronger.
Thank you Doug G. for braving the waters and introducing a note of either cynicism or reality — depending on your viewpoint — into this discussion. Mr. Z was quite right to refrain from commenting on the revenue from this..uhm..service because no one knows: 700 million users with 100% buying (an average of) 10 recommendations a month is drastically different than 5% buying one a year; and there’s nothing to support the former figure over the latter other than giddy enthusiasm. Just because one is dealing with large numbers doesn’t mean they’re untapped potential: the phone company once sent almost every household in America an envelope once a month, but that didn’t mean it was sitting on a huge sales opportunity (or if it was, nothing came of it).
So, if one were to make a purchase through FB by clicking on something they see in the timeline, would FB get a kickback (I assume they would)? Would the person who posted the item get a kickback (after all, they are the leadsource)? Does that turn FB into one massive MLM headache. Or, am I thinking too broad?
Interesting debate.
I think the idea that products will find their customers through social media is a very compelling one … at least for certain product types. I also think the model will ultimately benefit from driving value back to the advocate too. Social currencies could help here, but trust will also be a vital ingredient. Whether Facebook cracks this or someone else is all ahead….
Let’s not put too much emphasis on the Facebook timeline by jumping to the conclusion that it will change retail forever. First of all, let us not ignore the fact that right now, as we read this, there is a twenty-something sitting in her/his dorm room, spending their parent’s tuition, while they are working on the Facebook killer. Compuserve beat Prodigy, AOL beat Compuserve, Yahoo beat AOL, Google beat AOL, Facebook is looking to beat Google. The point I’m making is that retailing will remain, that is guaranteed. Facebook’s dominance is not guaranteed.
All that being said, while I like my friends, I certainly do not think they have all of the answers, and unless I become a lemming, there is nothing that is going to make me follow their lead on purchases just because they like a particular item. People will continue to make up their own minds, timeline or no timeline.
Thank you to everyone who weighed in on this! And it was great to see some new names come in for the discussion.
Just a few observations for what it’s worth.
1. The women who gave their opinions on this seemed, on average, to feel it was more plausible that Facebook could indeed change the way we buy things. That’s not to imply that there weren’t male believers but just that women seemed less split on the issue. Whether this has any foundation in the fundamentally stronger levels of female engagement in social networks or not is unknown but possible.
In other words, men may feel less inclined to believe Facebook can be a viable retail channel because they believe less in social media to begin with.
I’m often shocked by the number of people who comment on what Facebook does that don’t even have a Facebook profile.
2. For those who suggested that something might come along to displace Facebook … I can’t argue with that — history suggests that you’ll probably be correct. I would suggest, however, that it doesn’t really matter. As Myspace and Friendster (irreversibly) set the stage for Facebook, so too will Facebook set the stage for something else. The progress toward social commerce will be unimpeded. It’s the vapour trail of innovation that remains and there’s just no going back.
3. For those who felt that Facebook will lose people as a result of Timeline, you need only to hearken back to “Quit Facebook Day”. You know, that day everyone was going to turn Facebook’s lights out. Didn’t happen. This is not to say that people won’t eventually leave Facebook – they may but it won’t be timeline that prompts the departure – it’ll take more than that.
To wrap.. here’s a quote I love from a 1995 Newsweek article by the now infamous Clifford Stoll in which he surmises that the internet is just a bunch of nonsense.
Among other things, he says, “The truth is no online database will replace your daily newspaper, no CD-ROM can take the place of a competent teacher and no computer network will change the way government works.
Yet Nicholas Negroponte, director of the MIT Media Lab, predicts that we’ll soon buy books and newspapers straight over the Intenet. Uh, sure.” – Clifford Stoll
Thanks again everyone for the EXCELLENT and THOUGHTFUL comments!
– Doug