Facebook Deals to the DealPool: Five Lessons for Social Commerce

So what can we learn from the announcement that Facebook is killing off its embryonic Groupon clone – Facebook Deals – after just four months, and axing Facebook Places from its mobile app?  Five things.

• First is that size is not everything in social; just because Facebook dwarfs Groupon and Foursquare didn’t guarantee the social behemoth success.  Nor did it spell the imminent demise of Groupon or Foursquare.  For players in the social commerce space, it may not be that easy for Facebook to eat your lunch. Size is not everything in social commerce.
• Second, we think that if Facebook Deals is headed to the deadpool, it’s because lazy copycat innovation may not be the best recipe for success in social commerce.  It’s the sweat and smarts, not the software that makes social commerce work; simply throwing up clone of Groupon’s site in Facebook did not work.  More generally, since the cost of entry to social commerce from a technology perspective to social commerce is virtually nil – whether throwing up a Facebook store or a Group-Buy site (as the myriad of Groupon-clones attest), competition is rife and tough.  If Facebook couldn’t make it in the Group-Buy space, can you?  The answer we think is yes – but but it’s about have a differentiated and compelling value-proposition, and paying heed to the the truth that innovation is 1% inspiration and 99% perspiration.
• Third, behind the somewhat misleading headlines that Facebook Places is dead – it’s not dead, or even resting (just that the Places stream on the mobile screen has shuffled off this mortal coil), is Facebook’s understanding that the only real-estate that matters on Facebook is the News Feed. Rather than check-in to places, consumers can now tag locations, and if there’s a check-in deal (which are not dead, or even pining for the fjords – as opposed to a group-buy deals which are dead) it will pop up in their News Feed – and that can claim it.  In other words, Facebook is building the social media experience around the user, and moving functionality into the News Feed, where most people spend most of their time. Facebook is on home territory here, and if the social network thinks that the space that matters is the News Feed, then you’d be wise to focus social commerce efforts at getting in the News Feed
• Fourth, the importance of simplicity and clarity.  The social commerce possibilities on Facebook are multiple, but the social network seems to go out of its way to make it complicated for businesses and users to understand and use the options available.  Facebook Deals are dead, except when they’re Facebook Check-in Deals, in which case they’re not dead.  Except that check-ins are now tags, ad checking-in to Places is now tagging locations, except if you are a business in which case you still have child places, but under a parent page.  Enough already, it’s enough to make you want to KISS Facebook goodbye; KISS – Keep it Simple, Stupid!
• Finally, we think the demise of Deals and the current Places incarnation shows how focus and specialisation may be key in social commerce. Facebook is looking increasingly like Google in its thwarted experimental forays into social media innovation.  The sheer range of innovation going on at Facebook is impressive – but the successes happen when Facebook builds on what Facebook does better – allowing people to connect and share with each other. Which is why we think Facebook’s revived fetish for social tagging may stand more chance of success than a Groupon clone which is essentially email marketing.  Consumers have an app mentality when it comes to digital, and have no problem switching between apps for different tasks. There’s no more of a reason why Facebook – an app for connecting with friends – should be used for daily deals than Shazam, Flipboard or dare-we-say it Google.  Own a space in the mind of the consumer, and hold on to it.  For brands and retailers experimenting in the social space, the opportunity should be clear – use social to do better what you do better.