Facebook Ditches Physical Gifts To Double-Down On Digital Codes - Information portal

Facebook Ditches Physical Gifts To Double-Down On Digital Codes

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27.08.2013 Количество просмотров 771 views
Facebook GiftFacebook Gifts is getting a major redesign that will end sales of physical gifts. It will now focus on suggesting you buy friends digital gift codes or Facebook’s omni-Gift Card credit to spend at brands and local businesses they Like, which now get their own Gifts landing page. These two types of Gifts made up 80% of sales, cost less to ship and support, so it makes sense to invest in them in the rollout coming the next few weeks.

Facebook launched Gifts in September 2012 to fanfare that it might challenge ecommerce kingpin Amazon. Gifts fell short of those lofty expectations, though.

The product let you buy physical gifts like chocolate and stuff animals or digital gift cards to Starbucks or Uber for friends on special occasions like their birthday. Facebook later added alcohol sales and iTunes Gift Cards, plus began surfacing opportunities to buy Gifts in mobile. Still, sales were suspected to be slow and Facebook reported $5 million in earnings between Gifts and User Promoted Posts in Q4 2012, giving the product a low maximum impact on the company’s bottom line compared to ads and game payments.

So Facebook tried something new. It launched its own Facebook Gift Card. It’s a credit-card style plastic slice you could buy for friends that Facebook would mail to them. It would come loaded with the Gift credit you bought them, and could be remotely topped-up with money to spend at different specific brick-&-mortar stores if other friends bought them Gift credits.

With time, Facebook saw that only 20% of total Gift sales were for physical products, while gift credits to Starbucks and iTunes were the biggest sellers. It turned out it was difficult to recommend specific products to buy for friends. However, Facebook’s data on people’s interests, location, and social graph made it easy to recommend whole brands or businesses to buy friends digital gift codes and Facebook Gift Card credit.

Facebook Gifts manager (and former CEO of gifting app Karma that Facebook acquired to power Gifts) Lee Linden tells me it was worth it for Facebook to invest in the product and not kill it off entirely because revenue from Gifts is “definitely going up. It’s been steadily going up since the beginning of the year and I think it will keep going up with this.”
Source:  TechCrunch


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