Facebook Shops: “online shops killer” or another ecosystem project?
This week, Facebook has introduced the option of built-in online shops for business. This idea, according to the Facebook blog, was implemented as the way of supporting small businesses during the pandemic. For many years people have been using Facebook to buy and sell things, from secondhand goods market groups to styles from their favorite brands and influencers on Instagram. Facebook says that they have developed the concept of social commerce precisely on the basis of user experience (supporters of the Zuckerberg global conspiracy entered the chat).
It is really challenging time for small businesses now because of the quarantine, and many who did not digitalize their operations before quarantine, started doing it at a fast pace insofar as they could, and not always successfully. This relates both to Ukrainian and American markets, and for the latter Facebook also has a report. Following my tradition from the times of shopping on Instagram, I tried to evaluate the new product from Facebook and find out whether the panic of many online stores owners concerning the launching of online shops “killer” is justified (spoiler: not really justified).
What is Facebook Shops?
Facebook Shops is essentially an online store designer that will be accessible on both Facebook and Instagram. Its creation is free. Businesses can choose the products they want to feature from their catalog and then customize the look of their shop with a cover image and accent colors of their brand.
Is there a direct purchase on Facebook Shops?
Both yes and no. Facebook Shops can be found on a business’ Facebook page or Instagram profile, or discovered through stories or ads. There you can view the entire collection, add products you are interested in to the shopping bag and place an order. But the order can be made and paid for without leaving the application only if the businesses enable checkouts (now only in the US). In other cases, the order is placed on the shop’s website — so Facebook in most cases will share traffic. As for the support, Facebook Shops favours the idea to “send a DM” to a brand in Messenger or Instagram Direct, which is logical and right.
Connecting loyalty programs to your Facebook account
And here is a very useful thing for any business. An off-the-shelf loyalty program that is directly linked to your Facebook profile. The rewards and points received for purchases in the cafes and shops and without many hours spent on the development of a program? Definitely a valuable asset.
A useful thing for the Western European market, with which Facebook enters the online retail market with a partial monopoly in the long term outlook, but the antitrust committees have nothing to say — it’s a platform, not a shop.
However, the large brands do not seem to suffer much, instead they can even increase profit from working with Facebook Shops.
Nevertheless, the new development is not yet relevant for Ukraine (and is unlikely to be relevant in the next couple of years). We have not yet launched Shopping Tags, and without access to PayPal and Stripe, they will not be able to accept payments for goods in the application.