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October 10, 2012

Facebook testing a “want” button for online shoppers

In a move to establish itself as an e-commerce platform, the social network is testing a feature that allows users to create wishlist of items they want to buy.

By Tineka Smith

Facebook

Facebook’s "want" button could be want the social network needs for brands to trust the concept of F-commerce.

According to Reuters the company is partnering with retailers that include Victoria’s Secret and pottery barn, to test the feature.

The new feature called "Collections" will allow members to share and buy items off of Facebook.

"Facebook has been working for a long time behind the scenes to make the site more attractive as a retail channel," said Richard Britton, managing director of Cloudsense. "Ultimately, advertisers want to drive sales and Facebook wants to demonstrate its value as a sales platform. If Facebook can do this through the ‘Want’ innovation, taking a percentage of each sale for itself, both brands, shareholders and customers will benefit."

Facebook users will also be able to create wishlists of items they want to buy. However, Facebook has said that they will not receive any money from purchases made on a retailer’s site that a person has placed on their wishlist.

"The "Want" button is all about generating sales. The simpler brands can make the buying process, the more likely they are to boost sales," added Britton. "Each extra step in the sales process makes a conversion less likely. The main benefit of f-commerce should be a quick, easy and secure purchasing process, where customers can buy without leaving the site. For this to become a reality, brands need to integrate f-commerce into their sales and order management systems."

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The company reported a disappointing earnings report after its IPO in May.

Facebook reported a net loss of $157m in the second quarter compared to a net income of $240m in the same quarter last year.

Facebook’s revenue growth was the slowest since its first quarter in 2011. The social network’s revenue was up by 32% totalling $1.18bn compared to $895m in the second quarter of 2011, however, its capital expenditures more than tripled to $413 million in the second quarter.

The social network is now making a push to prove to investors that it can make money. Facebook has recently made moves towards mobile advertising.

The company’s recent push into the e-commerce market could also be a money making machine for the network.

Analysts predict that social networking sites will soon be a major way consumers shop online.

"With technology analyst house IDC suggesting that in the next three to five years, between 10 and 15 per cent of consumer spending in developed countries could be via sites such as Facebook, integrating f-commerce into a multi-channel offering is set to become a necessity rather than an option," said Britton.

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