The launch of Facebook Shops and what it means for your indie e-commerce business

by | May 28, 2020 | eCommerce, The Marketing Mix | 0 comments

On 19th May 2020 Mark Zuckerberg announced Facebook Shops – the platforms most important e-commerce move to date, designed to inspire people to shop and make it easier to buy and sell online.

“This is the biggest step we’ve taken yet to enable commerce across our family of apps.”

Mark Zuckerberg

While enhancing its e-commerce offering has always been in Facebook’s roadmap, it has accelerated its plan in response to COVID-19 and the impact this has had, particularly on the small business community. In fact, Facebook’s recent US State of Small Business Report, found that 31% of small businesses have stopped operating as a result of the pandemic. Similarly, the latest wave of the UK Business Impact of Coronavirus Study showed that 20% of businesses have stopped trading and of those still trading 61% reported their turnover had decreased outside of normal range between 20 April and 3 May 2020.

According to Facebook, one way that businesses are surviving during this period is by moving more online and it is hoped that Facebook Shops and other new e-commerce offerings will support these small business sell online.

“We’re seeing a lot of businesses that never had online presences get online for the first time, and we’re seeing small businesses that had an online presence now make them their primary way of doing business.”

Mark Zuckerberg

How to set up and run Facebook Shops

Facebook Shops will make it easy for businesses to set up a single online store for customers to access on both Facebook and Instagram. It looks like Facebook Shops will come first to Instagram, followed by Facebook and will roll out over the coming months. 

Creating a Facebook Shop will be free. Facebook will provide eligible businesses with a link to a new ‘Shop Builder’. From the Shop Builder, you will be able to upload your product listings one-by-one, or connect to your existing eCommerce provider in order to stream through your current catalog. You’ll also be able to customise the look and feel of your shop with a cover image, collections and colours aligned to your brand.

Initially, customers will still need to head over to your website to make their purchase. However, Facebook Checkout – allowing customers to checkout without leaving the Facebook or Instagram apps – will soon be heading our way and is already available to selected brands in the US. While the Shops feature itself is free, Facebook will collect a commission on orders that are made with Facebook Checkout. After experimenting with a rate from 1% to 5% during its beta phase in the US, as of 1 July Facebook will take selling fee of 5% per shipment (or a flat fee of USD 0.40 for shipments of USD 8.00 or less). This will be automatically deducted from the customers payment.

It is planned that In the future, as well as checking out directly from the Facebook/Instagram Shop, customers will be able to purchases directly within a chat in WhatsApp, Messenger or Instagram Direct messages.

Facebook Shops integration with Shopify and other e-commerce platforms

Facebook is partnering with Shopify, BigCommerce, Woo, and other e-commerce platforms to help businesses bring their products into Facebook Shops.

Shopify has said that its merchants will be among the first to get access to Facebook Shops. With Shopify’s integration, your products, inventory, and “back office” will sync with your Shopify store, so you can still run your business in one place.

According to Shopify, If you have already set up shoppable tags on Instagram, Facebook Shops will automatically become available to you in the coming weeks and you will be directly notified. If you haven’t set up product tagging on Instagram yet, Facebook Shops will be available to you in the coming months.

To prepare Shopify recommends that you set up the new Facebook Shopify app (available now). Once you’ve synced your products, you’ll automatically get access once Facebook Shops is available for your account.

“Facebook Shops allows Shopify merchants to get control over customisation and merchandising for their storefronts inside Facebook and Instagram, while managing their products, inventory, orders, and fulfillment directly from within Shopify.”

Shopify

Will it be without problems?

In a word, no. Many businesses are still having trouble setting up Shoppable Tags – so it’s unlikely that setting up Facebook Shops is going to be a completely plain sailing process I’m afraid.

Being based on the catalogue and requiring permissions to be correctly set up in Business Manager means that the set-up process is going to be a challenge for the less tech savvy small business owners.

There are also initial concerns around privacy, data ownership, customer trust in Facebook and questions over who will handle product returns.

As with other third-party retail platforms, the Facebook Shops experience will also take away the power of the brand controlling the customer journey and experience. I anticipate that it will also limit the order value with Shops likely to lean toward the facilitation of single vs multi product purchases.

That said, I think Facebook Shops does present a huge opportunity for some small businesses – especially those who have products that are bought on impulse as it allows the brand to capture the sale in that moment of impulse.

And, of course, I’m curious to see how they sync with ads. If we can put an ad in front of a customer that they can tap on to checkout right there and then, well that could be game changing. Watch this space.

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