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Facebook narrows focus on e-commerce sales

Facebook is introducing new tools for small retailers. As the COVID 19 pandemic has pushed the e-commerce platforms on the upfront, Facebook is becoming more than just ambitious in getting to the largest slice in the pie. The social media and networking platform is now moving at breakneck speed towards making it more of a shopping platform.

After acquiring Instagram at $1 billion in 2012, it has seen a quantum growth with Instagram having more than a billion users globally. The company recently launched and expanded a few products that aim to make its apps shopping destinations, particularly for small retailers.

Facebook Shop is a new tab coming to the Facebook app that’ll allow users to discover businesses and products on the social media platform. It is more of a mirror image of the Instagram Shop, which the company came out with in the last month.

Introduced in May, both the Facebook and Instagram tabs build are on the Facebook shops. It allows businesses to easily upload a product catalog and begin selling through Facebook quickly. Customers can pay through Facebook Pay, and their payment credentials will be carried over from one Facebook app to another.

Creating a dedicated tab on Facebook for shopping could accelerate the adoption of Shops. Many  businesses have a larger and more established presence on Facebook versus Instagram

Facebook has over 180 million businesses globally on its flagship platform, although the Shop feature is currently only available in the U.S.

Facebook plans to charge a selling fee, but it’s waiving the fee through the end of the year. It also doesn’t charge to set up a Store on its platform.

Furthermore, it offers a free customer messaging system through Instagram Direct, Messenger, and WhatsApp. Store owners are offered free insights and measurement statistics for their stores for a better overall shopping experience.

Shopify, another prominent e-commerce shopping platform has seen its business grow by leaps and bounds during the coronavirus pandemic, although it does not offer its services free completely. Facebook might be attempting to do the Shopify way, yet it may view the market differently.

In fact, it views the company as a partner. Merchants can import their Shopify product catalogs to Shops with just a click. Additionally, Shopify merchants won’t need to use the Facebook Commerce Manager as a backend for their Facebook Shop if they don’t want.

The long term plan may obligate the fact that while  Facebook will eventually charge a fee every time a store makes a sale, that revenue stream might not be as valuable to Facebook as the potential for earnings from the ad, which can be deemed as incremental revenue.

The add- on benefits could be that Facebook Shops, combined with Facebook Pay and Instagram Checkout, which allows shoppers to pay for items without leaving the app, ought to lead to higher conversion rates for people who click on ads.

Facebook will be able to provide better measurement statistics for merchants as the icing on the cake with all this combined adding to value addition for advertisers.

In the long term, they may be willing to pay higher for ads for such a service.

Online sales ads are becoming more and more important for Facebook.  Smaller businesses and direct – response advertisers have taken to Facebook while some of the big brand’s players have boycotted it. This has more than made up for the pullback in ad spend. Facebook is now betting on small retailers as it seems.

Will all this change the face of Facebook from a social networking site to an online sales and shopping mall, only coming times will tell. But for now, it is sure that Facebook has smelled the opportunity to pounce upon the retail and shopping format of doing business.

James Miller
James Miller
I am passionate about technology and writing. I have 10+ years of experience in working with different digital media companies. If you have an interesting story, please feel free to send a mail to james@ecommercenext.org

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