Facebook Shop - a feature that could help small businesses achieve additional revenue
Facebook is making a major new push into e-commerce. The company announced a couple of days ago the launch of Shops, a way for small businesses to set up free storefronts on Facebook and Instagram profiles. The shops will be powered by third-party services, including Shopify, BigCommerce, and Woo. Pandemic pushed all business to transfer their presence online, and this could be the easy way out for all of them who doesn't have funds to build a full-scale e-commerce shop, but also give an opportunity for other retailers to test online sales with little investment.
Mark Zuckerberg expanded e-commerce would be important to begin rebuilding the economy while the pandemic continues. “We’re seeing a lot of small businesses that never had online businesses get online for the first time.”. Record online sales only fast-forwarded previous projects. Facebook has been dabbling in e-commerce for years. In 2016, it introduced Marketplace, a destination within the app for peer-to-peer buying and selling. And two years later, Instagram began working on a standalone shopping app, which was later abandoned. Instead, last year, Instagram added in-app checkout and started testing a feature that lets users shop directly from Instagram stories.
Zuckerberg said Shops will improve on the standard web commerce experience by storing users’ payment credentials in a single place that they can then use on any Facebook or Instagram storefront.
There are currently more than 160 million small businesses using the company’s apps.
Since last years ending of a trial for privacy issues, a lot of Facebook users expressed concern about how will their personal accounts, credit card information, and buying preferences be protected. Zuckerberg said that "Facebook was reviewing its technical systems to identify possible privacy risks, and going forward, whenever the social network built a new product that used data, or a feature changed the way it used data, possible privacy risks would need to be addressed.".
For years, people have used these platforms to buy and sell things from the early days of posting a photo of a bicycle with the caption “for sale,” to selling your clothes on Marketplace and now shopping styles from your favorite brands and influencers on Instagram using DM.
We want to give people a place to experience the joy of shopping versus the chore of buying. And we want to help small businesses adapt and make it easier for people to discover and shop for things they love.Facebook
Also WhatsApp plays a significant role in global areas crucial to Facebook's growth. By putting monetization efforts on hold, Facebook is focusing on the future of international, cross-platform communications. And in Facebook Shops you’ll be able to message a business through WhatsApp, Messenger, or Instagram Direct to ask questions, get support, track deliveries, and more. And in the future, you’ll be able to view a business’ shop and make purchases right within a chat in WhatsApp, Messenger, or Instagram Direct.
Facebook is also working to integrate loyalty programs with shops. “You’ll be able to easily see and keep track of your points and rewards,” they said in a blog post. “And we’re exploring ways to help small businesses create, manage, and surface a loyalty program on Facebook Shops.”
While all the propaganda is focused on small businesses hit the hardest by the pandemic, this could be a trillion dollars opportunity. Shares of Facebook reached an all-time high of $230.75 on Wednesday, with Wall Street announcing on the company’s focus on e-commerce. “We think Facebook Shop in a simplistic bull case could drive up to as much as a $30 [billion] revenue opportunity, across a combination of take-rate driven transactional and advertising revenue,” the Deutsche Bank analysts wrote.
This feature will be available in USA from this summer. They wrote on their official page: "This summer, starting in the US, we’re introducing Instagram Shop, a new way to discover and buy products you love in Instagram Explore. You can get inspired by collections from @shop, browse selections from your favorite brands and creators, filter by categories like beauty and home, and purchase the looks you love all in one place. And later this year, we’re adding a new shop tab in the navigation bar, so you can get to Instagram Shop in just one tap."
It will be interesting to see how will this move reflect on IT companies specialized in webshop development, and will Facebook and Instagram in the future be able to compete with giants like Amazon, Alibaba, or eBay.