Facebook Gifts - What You Need To Know

Ever since the IPO launch back in May, Facebook has been looking for a number of ways to increase revenue and satisfy their investors. It has done so by letting brands and users pay to promote posts (although this has led to accusations of it adjusting what posts appear on the news feed, something it's denied) and

However, one of the more interesting developments that emerged from the social media giant is Facebook Gifts. Released on beta back in September, the purpose of Gifts is to give Facebook commerce and kick and put it back on track. Since brands weren't particularly keen on Facebook as a platform for ecommerce, the company is hoping that the new format will change their minds.

After being in beta for so long, Facebook is starting to roll out the service to all users - first in the U.S. in time for Chirstmas - and then to everyone else, more likely at the start of next year. So what is it all about, and how will this benefit both the user and Facebook?

What Is Facebook Gifts?

Facebook Gifts is a collection of low cost goods which can be purchased for a friend or loved one and delivered to them within a couple of days. If a friend's birthday is coming up, you will be given the option to send them a gift alongside the usual birthday message.

The nice thing about sending a gift to someone is when you do, that person automatically gets a push notification on their phone or desktop. If you allow it, he or she can decide what size, flavour, or colour the gift is when you send it.

A useful feature is that if you don't know what your friend's address is, your friend can type in his/her address so it can be sent on. However, if it's a case that your friend doesn't open the gift and enter an address within two weeks, the order is automatically cancelled and any payments will be refunded.There's the option to swap it for a lower or similarly priced gift before the order is complete. This basically reduces the risk for those buying, and increases the likelihood of a transaction being completed, which is likely to have brands more willing to join the service.

What Does It Mean For Brands?

Facebook has 100 merchants signed up to the service including Starbucks, Hulu Plus, Pandora, Rdio and Fab so already it has some well-known brands behind it. The focus is more on providing low cost gift ideas as the theory is that users would be more likely to spend their hard-earned cash on smaller, more affordable goods. However, Facebook isn't known as a place where users spend so convincing them will be the company's biggest challenge.

The area that Facebook will be trying to muscle in on is mobile commerce. Already, there's been an emphasis placed on how gifts will appear on the news feed on mobile, and the company would be hoping to tap into this growing market.

We've already seen the share button being added onto the iOS and Android app and there's every possibility that sharing gifts will become an option too. Also, gifts are automatically shared on your wall - unless you choose to change its privacy settings - so there's more scope for discovery and for placing gifts front and centre of the news feed.

Will It Work This Time?

It's clear that Facebook has put a lot more thought into this and has taken the necessary measures to make it a success. Taking the service out of beta in time for the Christmas period means that Facebook Gifts has a perfect opportunity to cement its status and convince people to use the service.

The obvious problem is that people don't associate the platform with buying goods so it may be facing an uphill battle convincing users to start using the service. Provided that the gifts are affordable, Facebook latest attempt could gain some momentum and create a new and lucrative revenue stream, but it will hope that the timing because if it can't succeed during a period where gift buying is at its peak, then the future of Facebook Gifts could be another failed attempt.