Is Facebook flunking as a storefront for retailers?

Some major retailers have abandoned their Facebook storefronts


On Monday I blogged about the declining user engagement of Facebook users in Australia over the past year.

The 21% drop in time spent by our Aussie friends on Facebook touches upon one of the real risks of the social networking site's business model as it gears up for a pending initial public offering of shares: That user interest and engagement will wane.

In other words, Facebook fears Facebook Fatigue, perhaps more than Google+, Twitter or antagonizing users with privacy violations. After all, Facebook can deal with the short-term anger of some users; the company has transformed the insincere apology for betraying the trust of members into performance art. But there's not much Facebook can do to persuade a bored member to stick around. (Though it can enact barriers that make it difficult for members to actually have their Facebook accounts deleted.)

Here's another potential problem for Facebook, courtesy of Bloomberg's Ashley Lutz: Retail giants are closing down their Facebook storefronts because they're just not paying off.

Last April, Gamestop Corp. opened a store on Facebook to generate sales among the 3.5 million-plus customers who’d declared themselves “fans” of the video game retailer. Six months later, the store was quietly shuttered.

Gamestop has company. Over the past year, Gap Inc., J.C. Penney Co. and Nordstrom Inc. have all opened and closed storefronts on Facebook Inc.’s social networking site.

Of course, Facebook isn't hurting for advertising dollars, some of which come from companies that shut down their Facebook stores. In 2011, 85% of Facebook's $3.71 billion in revenue was from advertisers.

Still, it's not hard to imagine some retail advertisers, sobered by the reality of their Facebook storefront failures, challenging previous assumptions about the effectiveness of the social networking giant as a marketing platform. After all, people aren't on Facebook to shop -- a Forrester Research analyst in Cambridge, Mass., told Bloomberg that for many large retailers, their Facebook storefronts were "like trying to sell stuff to people while they’re hanging out with their friends at the bar."

Maybe Facebook advertisers have data that show otherwise, but it also may be that those same people "hanging out with their friends at the bar" aren't particularly excited about being marketed to. Who would be?

Fun Facebook Fact

If you do a Google search on "why I quit" (though with no quote marks), you get these four default search terms in the following order:

why i quit facebook

why i quit drinking

why i quit zombie school

why i quit smoking

On Wednesday I'll explore in detail the growing dropout crisis facing zombie schools.

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