September 2021

Facebook Shops: The Outlook for eCommerce

From today onwards, businesses around the world will have the opportunity to reach wider spheres of online shoppers, at a time where they may need it most. Introducing Facebook’s newest intriguing feature, ‘Shops’. But is this friend or foe to eCommerce brands?

From today onwards, businesses around the world will have the opportunity to reach wider spheres of online shoppers, at a time where they may need it most. Introducing Facebook’s newest intriguing feature, ‘Shops’.


What is Facebook's 'Shops'?

The Facebook Shops feature provides users with a seamless shopping experience by allowing customers to browse, shop and place orders from merchants, directly through Facebook. 


This means brands have been given the ability to showcase their products and their brand story by uploading their product catalogs, choosing products to showcase, and customising their Facebook Shop with accent colours and a cover photo. The shops will then appear on Facebook business pages, Instagram profiles, and through targeted ads. An additional ‘Explore’ function will allow customers to search and find your brand by category or key words.


Ongoing rumours have suggested that this has been in the pipeline for a while, however the first stage of Facebook Shops was brought forward and extended because of COVID-19. Commenting on the development via Facebook Live, CEO Mark Zucherberg explains unveiling Facebook Shops earlier than planned is a way to help businesses who are suffering the effects of COVID-19. It’s true that this feature may bring brands some relief - especially ones that rely on retail at a time where retail sales have plummeted to a record low , but Zucherburg is careful to acknowledge that it won’t undo “ all of the economic damage”.


A Seamless Experience

The rollout doesn’t stop here. This summer will see the addition of ‘Instagram Shop’, which will allow customers to browse products and shop through the ‘Explore’ tab on Instagram. Brands will have the opportunity to link their Instagram Shop with their Facebook Shop, ultimately allowing customers to connect loyalty programmes between the two. 


While Facebook’s VP Dan Levy has mentioned the possibility of the company charging small fees on each purchase, the real monetisation comes from driving more advertising, as Shops can be featured on ads and Stories. This means that the shop will stay consistent across all platforms; what will differ is how customers have discovered it, and where.


Facebook’s aims are clear: to shape an entirely seamless shopping experience that allows users to go deeper into Facebook and Instagram without having to leave the apps. But what is interesting is that Facebook has found a way to make the process seamless for merchants, too. 


Brands will be able to use third-party platforms to manage their Facebook Shops like Shopify, BigCommerce, Woo and Channel Advisor, which will assist them with managing their merchandise, their inventory and orders. This means that, if your brand has already connected its Shopify and WooCommerce accounts, creating your new Facebook Shop will be a logical and easy step to make.


What does this mean for eCommerce?

One of the biggest challenges as an eCommerce business owner is getting paid advertising working profitably. With the digital advertising space becoming increasingly competitive, consumers are being inundated with ads - up to 4000 a day according to some reports - which is inevitably creating a more expensive advertising environment for eCommerce businesses. According to Facebook, average click through rates across all industries is around 0.9%, which shows the friction between the ad space and the buying environment.


Facebook Shops poses an exciting opportunity to bridge that gap, making it a seamless jump from ad to purchase. Whilst it’s still early days, we would expect this to translate into better store conversion rates and cheaper ad costs, both of which could dramatically increase profitability for eCommerce brands moving forward. Even though Facebook feature releases have seemed redundant in recent years, this is certainly not one to pass up.


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