“Real Friends. Real gifts,” is the new tagline Facebook is using to promote a new service that allows users to send tangible goods to their friends. The launching of this gift service marks Facebook’s “first official foray into dealing in physical goods.”
Facebook, entering the online retail industry, will not be able to compete at the same level as Amazon.com Inc. Facebook lacks one crucial element to make the gift-giving service work: the physical addresses of users. When someone orders a gift, a Facebook message is sent to the friend, asking he/she to fill in a house address.
Robert Hof offers a personal view for this gift-giving service in his blog, indicating problems with not knowing shipping costs until the very end and questionable reliability of merchants as a whole.
Is this new addition a sustainable strategy to differ itself from other online services and increase its revenue? As noted in Michael E. Porter’s “What Is Strategy,” ” A competitor seeking to match an activity system gains little by imitating only some activities and not matching the whole.” Perhaps a service requiring people’s physical addresses is not ideal for Facebook seeing as gift-sending may not be as convenient as it seems and user privacy issues may arise.