This month, I want to take a look at the Facebook rollout of ‘Shops’, Facebook’s official play at becoming the dominant force in social commerce and the overarching benefits I believe this new feature will have for Facebook & our ability to help benefit local & small businesses. First off, some background. Shops is a seamless integration of a Shopify store into a business’ facebook page that allows customers who are browsing the business page (and/or see promoted products that they like) to easily purchase the products directly from Facebook’s product suite (see below screenshot on the Shops user experience flow on Facebook & Insta). You might see the below and say ‘Tyler, I have seen these features before on instagram’, in which you would be correct! Facebook has been dabbling and testing ecommerce features for the last 5 years from the Facebook ‘Marketplace’ and the Instagram shoppable ads which took a very similar approach to ‘Shops’ with ‘collections’ and a seamless and near identical checkout process. Instagram is also getting a facelift with the new Shops feature with the addition of a new ‘shopping tab’ coming this summer. Ultimately, for the past 5 years Facebook has been effectively beta testing ways in which to successfully integrate  ad supported commerce into their social platforms and I believe ‘Shops’ is what will bridge that gap and make Facebook a trillion dollar company while helping local business get online…here is why:

   

Ease of Use and Adoption

  • For any product to become a success the most important variable is undoubtedly, adoption rate. Luckily, for Facebook & small businesses alike, the Shops rollout makes integrating small business’’ existing eCommerce catalogs or creating a new catalog super easy and almost every business can create one with little extra effort. 
    • For clients with existing Shopify stores, shopify has worked closely with facebook to create an ‘import’ feature of sorts where clients can seamlessly import their shopify catalogs with a few clicks of a button. 
    • For clients with existing eCommerce catalogs, they can upload a csv/xlm file with all their available products directly to the Shops UI. 
    • For clients with no online store presence, they can easily create products within the Shops UI and have a store up and running in minutes – see video in the aforementioned link. 
  • Ultimately, Shops is a simple & fast way for small retail businesses to get online and immediately begin generating revenue centered around their social tactics across Facebook, Instagram, messenger & whatsapp. AND the best part, it is FREE (kind of – the seller pays a transaction fee per product sold). 
  • From a numbers perspective, Facebook already has nearly 1M shops ready to roll out (from previous versions of their shops tab on the biz page) and with the seamless integration of Shopify, I don’t see why almost all 500k shopify stores won’t soon have Facebook social stores. 

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Ad Supported 

  • In Q1’20, Facebook made nearly 17B in ad supported revenue from businesses, agencies, & publishers who were heavily advertising to promote their brands, so it is no surprise to see that Shops and Shops’ collections will be ad supported so that businesses can further reach potential customers and get them to convert.
  • The conversion aspect of Shops + Ads is what really intrigues me…in theory, retail or eCommerce businesses who already run targeted social ads should see an increase in total conversions and conversion rate if they adopt the Shops feature and get their products on Facebook. The reason being, the path of least resistance. In traditional ads promoting a collection, a users clicks 4-5 times on average to get to the check out page (clicks the ad, click the product, click add to cart, click checkout) whereas the Shops ads will get users in front of the checkout page in less than 3 clicks. As we’ve found with most of our clients, the more steps to purchase, the larger the probability of an abandoned lead or conversion. Additionally, the ads will act like they always have in which users can easily share products they see with their friends and family through Facebook’s integrated messaging apps (WhatsApp & Messenger) – see below. 

 

As you can see, Shops is bringing about a new way to look at social commerce within the Facebook ecosystem and one that if they can overcome adoption hurdles, should blossom into a powerhouse with massive growth & revenue potential (if Pinterest revenue growth is any indication & not to mention all the transaction fees FB is about to collect). Ultimately, time will tell and I will keep you updated as we follow and garner more info from Facebook.