On May 19, Facebook announced a new ecommerce platform—Shops will make it easy for businesses to sell their products online directly via the Facebook and Instagram apps.
Facebook’s goal for Shops is to support small businesses as they make the leap to online in the face of store closures. Shops is a new channel to reach customers and make it easy and convenient for them to source a product and make a purchase all in one-step with a single tap.
What is Shops for Facebook and Instagram?
Shops adds the ability to list products from brands and sellers directly on Facebook and Instagram with the optional ability to accept orders and payment directly within both platforms. (Note: Checkout options in Shops must be enabled to offer this as an option to customers.) Creating a Facebook Shop is free. Brands and sellers can connect their catalog feed from a current provider such as CommerceHub, Shopify, or another syndication partner and create listings for free. Facebook will collect an order referral fee once a purchase has been made.
This functionality is not unlike Google Shopping and Buy on Google, and like Google, takes a referral fee per purchase. Facebook is charging nominal order fees because they intend to have Shops drive the advertising portion of the business. Ads specifically for Shops are available for purchase on the platform.
How do customers find product listings?
Ads and/or catalog listings can surface to Facebook users through:
- A business’ official Facebook or Instagram page
- Stories in a Facebook/Instagram user’s timeline
- Ads in a Facebook/Instagram user’s timeline
- Live video that tags products (feature not available yet; coming soon)
What’s the difference between Shops and Facebook Marketplace?
Marketplace was originally designed for peer-to-peer selling of individual goods and services, similar to Craigslist. While brands and sellers participate in Facebook Marketplace, engagement is comparatively low compared to other marketplace ad channels because Facebook Marketplace is primarily designed for and used by Facebook users selling one-time purchases of private goods, rentals, or services.
On the other hand, Facebook Shops is specifically designed to promote and drive ecommerce purchases for brands and sellers with an active retail catalog.
What does this mean for brands and sellers?
Gain direct access to 2.6 billion active users per month. Shops offers new ways for brands and sellers to find more customers on the world’s largest social network, even if you’re already selling on Facebook Marketplace.
More effective conversion potential because adoption is already high. At launch, Facebook announced nearly 1 million businesses are already signed up for Shops due in large part to easier visibility and direct checkout capability.
New advertising channels to drive traffic and conversion to listings on Shops, and help businesses get their products in front of more (and new) customers.
Faster checkout for future mobile purchases. Shops features the ability to store payment information for a customer profile to speed up checkout for making purchases using a mobile device. This mobile accessibility is key considering 98% of Facebook active user accounts worldwide access it using any kind of mobile phone.
Loyalty programs are coming. Facebook also has plans to implement loyalty programs that can be stored.
Are you ready to take advantage of this exciting new retail opportunity?
CommerceHub can connect your product catalog to Shops and provide you with the expertise to drive demand with targeted and strategic advertising. Contact us today to learn how we can help make Facebook and Instagram Shops successful for your business.