Facebook have announced the release of their latest, and arguably most significant, e-commerce products in recent years with Facebook Shops. But what exactly are Facebook Shops, and what does their introduction mean for businesses?
What are Facebook Shops?
In essence, Facebook Shops is a consistent storefront on each of Facebook’s key properties (Facebook, Instagram, WhatsApp, Messenger), most akin to Amazon Stores. It can be set up for free and just requires a product feed integrated with Facebook (similar to those used for Dynamic Product Ads) and ideally an e-commerce partner such as Shopify, WooCommerce or Feedonomics.
In order to allow users to purchase directly through Facebook, access to Instagram Checkout – which is still in beta in the US only – is required. As such, the initial Shops rollout will just enable the ‘storefront’ capability linking back through to your main website.
The other key points announced by Mark Zuckerberg yesterday were:
- Direct messaging to businesses as a part of Shops
- Discovery tab within Instagram to showcase Shops
- Shops storefront customisation
- Personalised shopping experience using their AI platforms (much like Dynamic Product Ads)
- Live video shopping
Facebook will begin to roll out Shops to all eligible businesses globally in phases on both Facebook and Instagram Shopping over the next few months. Starting today you may see this enabled for businesses that already use Instagram Profile Shops and/or Facebook Page Shops.
Beyond that, businesses globally using Instagram Shopping or a Facebook Page Shop, will be contacted via email and in-app messaging when they are able to access the product.
Facebook’s accelerated move into e-commerce
Against the backdrop of coronavirus, Facebook have released several initiatives to help small businesses, such as their grant program and tighter restrictions around bad actors and sales of products linked to coronavirus. This latest step is the most tangible for the 160m small businesses that currently use the platform.
The reality is that the further integration of e-commerce capabilities within the Facebook ecosystem was already high up on their product roadmap, but recent months have likely accelerated this roll-out – particularly as this product has the potential to be valuable for larger global businesses, as well as independent local retailers.
Facebook has long understood that its weak spot is in its reliance on other platforms and its advertisers’ sites to fulfil a lot of its advertising objectives. As such, this is just the latest development in a long line of efforts to keep interaction and commerce within its native platforms – from the introduction of native video on Facebook years back, through to Lead Gen Ads, Messenger & WhatsApp integrations and Instant Experience Ads. By keeping users within the platform, Facebook is able to make things run more quickly, increasing conversion rates, as well as generating more valuable data about the consumer. The ubiquity that WeChat has managed to achieve in China is clearly something that Facebook strives to emulate.
What Facebook Shops mean for businesses
The key questions for businesses to ask here will be whether ceding this additional link to their customer and sales process will be a good trade-off versus the potential benefits in terms of sales volumes – much like the trade-off, many businesses have had to come to terms with on Amazon and the new Google Shopping product. Details on the cost of checkout % are still scarce at present, but along with that, the data lost from users possibly not visiting the business’ website at all during the consideration process needs to be accounted for. It’s very likely that Facebook will introduce retargeting products based on Shops interaction within their own platform, but obviously this limits what can be utilised from a PPC and Programmatic perspective using audiences in platforms such as Google Analytics.
Zuckerberg was very open in his announcement that their play here is the adverts that will be purchased off the back of their assumed high conversion rates with Facebook Shops. So at least there is consistency in his message here. The other benefit to Facebook with this outcome (aside from the direct advertising dollars) is further proof of the value their ads drive in the purchase funnel. If customers are converting directly on the platform it is a much stronger argument as to the value of both clicks and impressions generated.
In a world where a brand’s customers convert directly on Facebook, Google and Amazon, how can they really control the brand experience and own the customer relationship? Ultimately that is where many customers are and the experience should be as frictionless as possible. Amazon has proved this. However, building a brand and demand for your products should always be under your control. If you can create great storefronts in each of these platforms, it will likely become essential in time.
Please get in touch if you have any questions about Facebook Shops for your business.
