Facebook has begun testing a new feature called “Collections,” which allows retailers to post product photos with “Want” or “Collect” buttons, as well as links to buy from their sites.

TechCrunch reports that seven retailers are testing the feature: Michael Kors, Pottery Barn, Wayfair, Victoria’s Secret, Neiman Marcus, Smith Optics and Fab.com.

The feature uses large images that users can hover over and click either “Want,” “Collect” or “Like.” TechCrunch says Facebook is testing variations of the feature to determine which button users respond to best. Each button saves items to a section of users’ Timelines, either called “Products” or “Wishlist.” Facebook is testing whether these collections should be visible to friends only or friends of friends.

When users browse a collection, there are links directing users to buy the items from the retailer’s website. It is possible there will be a way to distinguish already purchased items from a user’s products list. Collection posts also include native Facebook features such as Like, share, and comment.

TechCrunch reports that collection posts only show up for a page’s fans, though we have been able to view some collections on pages that we have not Liked. See examples from Michael Kors, Pottery Barn and Wayfair, but note that the links may not work for non-fans.

With the company recently announcing the new Gifts product, this is another way Facebook could eventually expand its business model through purchases of physical goods. Currently, though, Facebook is not taking a percentage of purchases made after clicking on collections links. TechCrunch says it is not charging retailers to use the feature, but it is still in beta. We may see the social network take a similar approach to what it has done with Offers, which started with select partners and then rolled out more widely for free, but now require page owners to buy ads to promote the offer.

This new feature is familiar in design to competitor Pinterest, though this is not the first time Facebook has updated it’s design to look more like pinboards. The functionality is also similar to a version of Facebook Questions we saw being tested in August. Collections are limited offerings compared to Pinterest at this testing stage, but they fulfill a similar consumer desire to browse, discover and share products they are interested in. On Pinterest, however, users can add their own content and save items they find all over the web. It’s unclear whether Facebook will create an option for individual users to create their own collections or if the vision is for this to be a pages-only feature. Pinterest also has the option for users to browse items by category, which could be useful if Facebook allows more pages to begin posting collections.

Although some users are now seeing a “Want” button, the feature announced today seems to be different from the Want plugin we saw Facebook testing in the past. That product seemed to be for publishers to implement on their own websites, not on their Facebook pages. Ultimately these might be combined in some way so that users can have a single wishlist for items they discover on Facebook, the web and in apps.

Social commerce company ShopIgniter this week announced Igniter 4.0, a platform aimed at helping retailers promote their products with rich posts that engage users and push them down the path to conversion.

ShopIgniter CMO Kevin Tate says Igniter aims to fill the gap in the social conversion funnel between awareness/discovery and e-commerce/in-store purchases. When retailers first got on Facebook, they tried to sell too hard and turned off users. Now they know engagement is important but they sometimes end up putting Likes, comments and shares ahead of business objectives.

Tate says companies need to create “more meaningful, deeper experiences with a product not just general engagement.”

“Nike can’t just say, ‘Usain Bolt won the 100. What shoe do you want?’”

Tate says there are opportunities for companies to talk about products on their pages if they do so in a compelling way. ShopIgniter strives to do this through rich, customizable posts like interactive video showcases or limited-time storefronts with exclusive offers.

Igniter has four components: Promoter, Studio, Converter and Analyzer. Promoter is a publishing tool to post to Facebook, Twitter and Pinterest. Studio is where marketers can create simple web apps that allow users to experience products through Facebook Timeline, microsites and mobile devices. Converter manages Facebook permissions, email collection, shopping carts, wishlists and other features on the path to checkout. Analyzer tracks reach, engagement, social amplification, referrals and conversions.

Tate says this is ShopIgniter’s way of “casting a wider net” and helping retailers reach customers higher up in the purchase funnel, rather than focusing on the shopping side through tab applications, for example. He calls Igniter 4.0 an “end-to-end social promotion suite” with the added ability to publish to mobile and incorporate Open Graph actions.

ShopIgniter began in 2008, and raised $8 million in a series B round in 2011. Target, Nike, Disney, Omaha Steaks, Kaenon Polarized and others are customers.

“People don’t come to Facebook to shop” is the common belief. A number of companies have given up on f-commerce and thousands more haven’t even tried because of this axiom.

So why then is Facebook launching Facebook Gifts, a way for users to buy their friends physical goods directly from News Feed, Timeline and mobile?

Facebook may very well be a party, not a shopping mall. But the company has realized that sometimes people need to bring gifts to the party. The big difference between Facebook Gifts and other f-commerce efforts is that Facebook isn’t trying to get users to browse and buy things for themselves. It’s suggesting that users shop for their friends.

How well this will work remains to be seen, but it’s important to distinguish what Facebook is doing from the failed efforts of companies that previously tried to sell things on the social network. The biggest problem with those early attempts was that businesses essentially recreated their websites in a Facebook tab, doing little to understand what makes the platform unique and building a community that would want to use the shop. Successful f-commerce companies like ShopIgniter and Payvment went beyond setting up basic storefronts and instead promoted exclusive offers or recommended items based on what a user’s friends liked.

These companies found opportunity in impulse buys and optimized the flow from discovery to checkout. ShopIgniter, for instance, created Flash applications to run limited-time offers for fans to buy Kaenon sunglasses directly from the feed. Payvment recently eliminated its shopping cart and created a whole website focused on one-click buying and sharing items through Open Graph.

Facebook has integrated Gifts in the birthdays section of its homepage and in the publisher on friends’ profiles. Users don’t have to enter payment information right away and they don’t need to know a friend’s address. This reduces the biggest points of friction in most online shopping experiences.

Facebook will likely further optimize the design of Gifts to help users find the right product for their friend faster. For example, improving its recommended gifts algorithm to be more personalized for each recipient, allowing users to create wishlists (maybe using the “want” button) and incorporating friends’ Likes and past purchases to show which gifts are most popular. Facebook might also find a way for users to buy gifts as a group so that two or more friends can split the cost of a larger gift. Target currently has an app on its page called “Give With Friends,” which allows users to do this for Target gift cards, which had 6,000 monthly active users last month, according to AppData. Social hooks like these could do really well for Facebook Gifts.

A number of factors will determine if Facebook is ultimately successful with Gifts, from merchant relationships and inventory to customer service and privacy issues. From the outset, though, it seems Facebook wants to prove that its “social design” approach will work in ways that traditional commerce methods haven’t on the site.

Facebook appears to be gearing up to launch a product called Facebook Gifts, seemingly the result of its acquisition of mobile gift-giving app Karma.

The company temporarily posted a new job listing this week for a “merchant operations analyst” with a number of responsibilities related to on-boarding new merchants, managing assets and inventory.

“We are looking for an individual with strong communication, organizational, and problem-solving skills to help us launch our Facebook Gifts product,” the listing read before it was taken down last night. A Facebook spokesperson said the company did not have any information to share.

The Next Web reports that is has a source saying Facebook will debut its social gifting product in the U.S. within the next few weeks.

In May, Facebook bought Karma, an iOS and Android app that allows users to choose gifts for their friends from a curated set of products. It also suggests friends to whom a user could give gifts to based on their recent Facebook posts. When users choose a gift, the recipient is notified so that he or she can provide their mailing address. The recipient also has the option to swap the gift for something else.

The Karma app is still available from the Apple App Store and has about 2,000 monthly active users connected with Facebook, according to AppData. Although the social network said it would keep Instagram running under its own brand, the job post reference to “Facebook Gifts” suggests that it is likely to rebrand Karma since it was less known than Instagram.

Facebook picked up the full Karma team and technology in the acquisition, so it started with a working model. Scaling to handle Facebook’s audience, even if only in the U.S., however, could be a big challenge for Facebook. Selling physical goods requires the social network to take on a number of new tasks. Although it seems that merchants will handle fulfillment, Facebook seems to managing aspects of marketing (writing copy, photographing products) and packaging (sourcing and distributing gift packaging for merchants).

It’s unclear whether Facebook will handle customer service, but with the name Facebook Gifts, users are likely to have the perception that they are buying from Facebook, not from individual merchants, so the company will need to be prepared to handle issues that arise from unhappy customers.

Facebook had a product called Gift Shop from 2007 to 2010, which mostly offered virtual gifts that users share on each other’s walls. The company experimented with physical goods in 2009, partnering with American Greetings Interactive, GreetBeatz, Someecards and Real Gifts to sell cards, flowers, candy and stuffed animals. However, Facebook’s business grew by offering a platform on which developers could create their own games and apps to sell virtual or digital goods, not by sales from Gift Shop. The company also seemed to put aside gifts to focus on its growing ad business. Likely after seeing the model of Karma, Facebook decided to get back into gifts, this time with a mobile-first approach. It’s unclear whether Facebook will offer a desktop component for Gifts.

Below is the job listing from Facebook’s Careers site mentioning “Facebook Gifts.” The link has been taken down.

Only 30 of the top 500 Internet retailers offer Facebook login as a registration option for their sites, according to research by social commerce software company Sociable Labs.

That’s only 6 percent of the top online retailers making use of a feature the social network launched in 2008. Sociable Labs says it’s not because Facebook login isn’t useful. The option simplifies account creation, eliminates the need for another password, allows companies to better personalize their sites and collect richer CRM data, in addition to increasing referral traffic from the social network. Sociable Labs says the problem comes down to technical barriers, perceived security concerns and, in general, lack of priority among online retailers that have another registration system in place.

In fact, newer companies on the IR 500 list like Modcloth, ideeli, Fab.com, One Kings Lane and Beyond the Rack, tend to use Facebook login. Without legacy systems as a barrier, these retailers are able to implement Facebook login from the beginning.

Some other companies that use Facebook login do so by using a third-party software vendor such as Gigya or Janrain, which often give users a choice between logging in with Facebook or other platforms like Twitter, Google or Yahoo. Sociable Labs points out that, compared to other networks, Facebook has richer user profile data and more robust options for sharing content back to Facebook, such as through Open Graph actions.

However, even among the companies that have integrated Facebook login, few are taking advantage of all the benefits it offers. Sociable Labs found that 30 percent of companies that implemented the feature did so incorrectly by requiring a user to create a separate site password. The point of the Facebook login button is to reduce friction in the sign-up and login process. Including a second password is perhaps meant as a security measure, but it mostly defeats the purpose of using Facebook login to streamline registration.

Sociable Labs also found that half of retailers that use Facebook login do not offer the option during the checkout process, which is often the point at which many consumers create accounts. And none of the top e-commerce sites with the login button use “persistent login” to automatically log in users when they revisit the site. An earlier Sociable Labs study found that 50 percent of users browsing e-commerce sites were logged in to Facebook, so retailers are missing a large opportunity by not enabling persistent login. Living Social, though not among the IR 500, is an example of a company that uses persistent login to instantly personalize the experience for return visitors.

Fab.com, which is in the IR 500, uses Facebook login correctly in that it doesn’t require users to create an additional password. The site also integrated Open Graph in January to allow users to share what they buy and “fave” on the site. Within four months, the company doubled its referral traffic from Facebook and increased membership from 1.8 million to 3.2 million users.

When Facebook introduced Connect for websites in 2008, we suggested it could help developers improve the registration process and increase traffic for their sites. Thousands of websites integrated Connect within the first year, and Facebook reported that those that implemented single sign-on saw 15 percent increase in site registrations. However, developing this capability could take up to six weeks for some sites, so many either didn’t see the value or couldn’t put the resources toward it. In 2010, Facebook retired the Connect brand and released the Facebook login social plugin, which worked basically the same way as Connect but began to show users photos of their friends who have already joined a site. The company also offers a registration plugin that pre-fills sign-up forms with a user’s Facebook information.

Sociable Labs is a social commerce app provider with products to help online retailers integrate custom social plugins and Open Graph publishing on their sites. For this research, the company looked only at use of Facebook login and did not count sites that use Facebook APIs for purposes other than registration.

Here is the list of retailers in the IR 500 that have implemented Facebook login, organized by whether they ask users to create an additional password when they register.

Image credit: Sociable Labs

Data visualization company SumAll today launched its Social Metrics tool, which allows businesses to see their Facebook and Twitter activity overlaid with web traffic and revenue data.

The free service helps companies understand how their social marketing efforts have an impact on sales. Users connect their Facebook, Twitter, Google Analytics, eBay, PayPal, Shopify or other payment processing accounts to SumAll. Through an interactive dashboard, they can select which data sources to compare over different time periods.

For example, a business could look at whether the addition of new fans on Facebook correlates with revenue in any way. It could see whether Facebook engagement leads to additional transactions, or if fan advocacy has more of an effect on sales from new customers or existing customers.

SumAll CEO Dane Atkinson says the company’s vision is to unlock data from the cloud and make it “beautiful and accessible.” It is working to integrate data from the Facebook Ads API, AdWords, MailChimp and other services to give businesses a more complete picture of how their marketing and advertising relates to real business outcomes.

SumAll, which launched in beta 10 months ago, is free. Atkinson says that down the road the company may begin to charge for access to deeper insights, but he believes that people should be able to see their data for free. This makes the tool ideal for small and medium-sized businesses, like Diamond Candles, Freaker, Urbio and others already using the service. Atkinson says SumAll has 7,000 customers looking at $1 billion in transactional data. The New York company raised $1.5 million from Battery Ventures, Wellington Partners and General Catalyst Partners in June. It has a 30-person team.

Facebook loses lobbyists – Politico reported this week that three contract lobbying firms working for Facebook pulled their services after content providers who were also clients raised concerns. The story implies that Internet providers and content creators are at odds, noting that Facebook increased its lobbying expenses 285 percent from 2010 to 2011. [Image via Facebook]

Facebook engineers now designing hardware – As part of its Open Compute Project, Facebook staff has begun to design its own storage hardware, according to a report from Wired.

Facebook wins Power.com court fight – Facebook finally won its case against Power.com, a now-defunct website that used to aggregate data from social networks. The lawsuit began in 2009.

Facebook used to serve legal claims in UK – Facebook may now be used as a platform with which to serve legal claims in the United Kingdom. A judge in a court case recently allowed Facebook to be used in a commercial case where one of the parties was difficult to locate.

Study: users managing privacy controls better – The Pew Internet and American Life Project released a study this week that found that users of online services are becoming more active at controlling their privacy.

Crowdtilt launches funding platform – Crowdtilt publicly launched its group fundraising platform this week. The site uses social media platforms like Facebook to allow groups of people to raise money for anything from art projects to vacations.

Miloyni releases Credits whitepaper – Miloyni has written a report called “Facebook Credits 2012: A Merchant’s Perspective” examining the benefits and drawbacks of Facebook Credits.

Oscar buzz on Facebook – Banyan Branch put together an infographic with buzz for Oscar nominees ahead of the ceremony this weekend.

Social commerce app provider Sociable Labs released a new suite of applications this week that allows online retailers to integrate Facebook Open Graph with their sites.

The EverShare app suite creates “frictionless sharing” for e-commerce sites so user activity automatically publishes to Facebook’s Ticker and Timeline. By licensing Sociable Labs’ software, businesses don’t have to build their own custom apps.

Retailers can add the EverShare activity stream to personalize customers’ experiences by displaying how friends have interacted with the site. Users can also set up activity alerts to get Facebook notifications when friends take action on the site. There is also a gallery feature that aggregates trending items in a Pinterest-style display.

We like that the apps give users clear understanding and control over how their activity is shared. The apps include a straightforward button to switch between sharing and private mode. There’s even a prompt to disconnect the app completely. These controls are important to generate trust among users. As more websites, especially e-commerce sites, integrate Open Graph, they should follow the example of EverShare and the news apps we’ve previously covered to maintain user privacy and promote more sharing in the long run.

Adding social applications to third-party sites could be the direction many retailers begin to take instead of creating page tab versions of their online stores. In cases where businesses already have successful e-commerce sites, it makes sense to integrate Facebook there rather than trying to port the store to another platform.

Social commerce app company Columbus Internet partnered with Hotels.com and SkiHorizon to launch a first-of-its-kind Facebook affiliate program in Europe.

Page owners can add the Hotels WithMe app or the Ski WithMe app to their Facebook page and earn commission on bookings made through the apps. The program is meant for pages that provide a reason for people to want to travel: local attractions, concert venues, conventions, city fan pages and others.

Traffic to page tabs pales in comparison to News Feed and Wall views, but with these social booking apps hosted on multiple pages, they could see more conversions. Page owners have incentive to promote the feature since they receive 4 percent commission on hotel bookings and 7.5 percent on ski trips. It’s an interesting model that could be applied to a number of industries if it finds success.

About 30 hotels have already added the Hotels WithMe app to their pages, according to Columbus Internet spokesperson Alex McKerrell. Other affiliate partners include travel agencies and tour companies in the UK, Italy, France, Sweden and Germany. McKerrell says the company hopes to have bands and sports teams add the app to their pages now that page managers can present the group’s entire tour and let users search for hotels near each venue.

Hotels WithMe has about 1,000 monthly active users and 100 daily active users, according to our AppData tracking service. Launched in September 2010, the app peaked during the holiday travel season with 7,000 monthly active users. Ski WithMe is a newer app with only 300 monthly active users. Page owners in the UK, France, Germany, Belgium and the Netherlands can add the app and join the affiliate program.

Facebook Updates HipHop Virtual Machine - In a blog post, Facebook announced today the launch of its HipHop Virtual Machine (HHVM). The execution engine will help the company run code faster. [Image via Facebook]

Facebook Fixes Photo Bug – Facebook acknowledged a problem that occurred, allowing users to see others’ private photos, and then fixed the glitch, according to ZDNet.

Facebook Offers Special Ad Tracking to Some – TechCrunch reported that Facebook has been providing top advertisers with special downstream conversion tracking by installing a pixel on an advertiser’s conversion page.

Facebook Sues Timelines.com – Facebook has counter-sued Timelines.com after that company sued the social network over its use of the word “timeline.” Facebook filed a suit to strip Timelines.com of its trademarks, claiming the are too generic.

Other Announcements:

GroSocial Releases Customizer for Pages – GroSocial released a white-label program allowing users to offer customers a branded version of GroSocial’s Customizer for Pages this week.

Intuit Releases SimpleStore for Facebook – Intuit released its social commerce app SimpleStore for Facebook this week, allowing business owners to simply sell goods on their Facebook Pages.