eCommerce Strategy Consultant - Rick Watson - RMW Commerce Consulting

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Facebook Needs To Invest in eCommerce As If Its Life Depended On It

I was browsing Facebook's recent earnings call transcript last week to glean a few tidbits about their e-commerce investments.

The biggest worries for a high margin, high growth ad platform which has put eCommerce in its list of top priorities are as follows:

  • There isn't enough critical mass of eCommerce talent that wants to work at a big ad company.

  • The Commerce group might roll up to a broader product unit and not be independent enough to think differently. Amazon tends to solve this problem brilliantly. Most other companies struggle with this.

  • The group might be on a short leash. See last point about Amazon.

  • eCommerce has lower margins than other businesses. This means investors lose patience, too. Mark has tight reins here, so perhaps he can get past this.

But those aren't the biggest reasons. In order to truly succeed, Facebook needs to make eCommerce "The Number One" priority. The number 3 priority in a high-margin ad business is unfortunately still an incubation project.

For Facebook to make its mark, it needs to invest in eCommerce as if its life depended on it. After all, it's currrent primary competitors for merchant attention - Shopify and Amazon are investing like this.

Looking forward to seeing what Mark has in mind for later this year.