Will Facebook Shops launch social commerce into the mainstream?
Facebook last week introduced new tools that let small businesses set up online storefronts on its site and Instagram for free.
Businesses can upload a catalog of merchandise to a new “Facebook Shop,” accessible through their Facebook page and Instagram profile. Shoppers can then browse merchandise directly within the social media apps, save products they’re interested in and place an order — either on the business’s website or without leaving the app, if checkout has been enabled.
Customers can use WhatsApp, Messenger or Instagram Direct to ask the business questions, get support and track deliveries. Facebook is collaborating with Shopify, BigCommerce and other online specialists to support integrations.
Facebook hopes to enable purchases directly within Messenger and WhatsApp, add Shop features to Instagram Explore, and live-connect merchant loyalty programs to Facebook apps.
COVID-19 prompted the social platform to accelerate the launch. In a live-streamed announcement, CEO Mark Zuckerberg said, “For the first time, and we’re seeing small businesses that had online presences now make them their primary way of doing business.”
Facebook charges a modest processing fee for using its checkout features. It expects to monetize the program by selling advertising to merchants looking to reach Facebook’s more than 1.7 billion daily active users.
The two main rivals to the service are Amazon and Google.
Citi analyst Jason Bazinet believes retailers will have more incentive to advertise with Facebook now that e-commerce is more seamlessly integrated. He noted that ads on Amazon generate about four percent of the company’s gross merchandise volume. “This suggests marketers are willing to spend more on ads when they are confident the consumer is close to making a purchase,” he writes.
“It could be a big game changer or it could fall flat,” added Lauren Rockwell, associate director of SEO at Cogniscient Media, to MediaPost. “Amazon is so ingrained in our culture. It may be another place for users to go play and purchase. It’s another auction we have at our disposal, but it will depend on who will use it.”
- Introducing Facebook Shops: Helping Small Businesses Sell Online – Facebook
- Facebook Launches Shopping Platform for Small Businesses – The Wall Street Journal
- Facebook Might Plug Gap Even Amazon Can’t Fill – The Wall Street Journal
- Facebook Launches Virtual Shopping Mall, Saying It Will Help Small Businesses – NPR
- ‘Facebook Shops’ Lets You Shop Your Favorite Stores From the Social Network’s App – Entrepreneur
- Facebook Shops: Analyst Foresees Multibillion-Dollar Revenue Opportunity – MediaPost
- Facebook Shops could represent a $30 billion revenue opportunity, analyst says – MarketWatch
- Facebook Shops Puts Company in ‘Rarefied Air,’ J.P. Morgan Note Says – TheStreet
DISCUSSION QUESTIONS: Is Facebook Shops positioned to accelerate online sales across social media? What do you think of Facebook’s targeting capabilities and reach compared to Amazon and Google?