“Shops” is Facebook’s Opportunity to Skyrocket
With a series of recent initiatives, Facebook is revamping and transforming rapidly, which potentially sets up the company for even greater success.
Starting last month, May 2019, you are now able to browse and buy products directly from a business’ Facebook Page or Instagram profile.
In 2018, both Facebook and Instagram supported a Marketplace feature allowing customers to buy products featured in posts or ads. By launching Shops, an improvement of Marketplace, it will help the platform become more business-friendly and will help generate fresh ad revenue, even as user growth slows.
Launching Shops also sets Facebook for huge success in the future. Here is why.
Even if user growth slows, Facebook is the biggest social media, with 94% of businesses using it.
Facebook has and is still dominating the social media market for a decade. It still has the ability to activate them with such products.
YouTube seems Facebook’s biggest contender but Facebook has still a big advantage: 94% of companies have an active Facebook page but only 60% of them have created a YouTube channel which is an opportunity Facebook is utilizing.
Facebook is betting that allowing more local businesses to offer their products online will help them endure the current pandemic, will help them tap into a new revenue stream and new customers while also creating big new business opportunities for Facebook itself.
Facebook is not doing it alone. It’s bringing Shopify, BigCommerce, and Woo onboard.
The shops will be powered by third-party services, including Shopify, BigCommerce, and WooCommerce, the top 3 biggest e-commerce platform for online stores. Mark Zuckerberg had even invited Shopify CEO Tobias Lütke to join him in a live-streamed video announcing the partnerships.
Through Facebook Shops, consumers will be able to find, browse, and buy products through Facebook and Instagram. Checkout will be powered by Shopify for merchants, with Shopify also offering Instagram Checkout to select merchants testing the new feature.
Facebook is tapping in Amazon biggest weakness.
Amazon biggest weakness is its brand reputation of ‘retail killer’. In 2019, 9,302 closed in the U.S. It’s a 59% jump from 2018. It is largely due to the non-ability of small shops to acquire, install, and adopt quickly technologies that can allow them to compete with giants like Amazon.
This is exactly the opportunity that Facebook tries to seize. The goal is to provide small and medium businesses with a complete and powerful end-to-end business solution allowing them to advertise and raise awareness, convert customers, get payment done, and ship the product.
Many experts have stated that this might be opportunistic from Facebook, that launching Shops comes as stay-at-home orders related to the COVID-19 pandemic have led to record sales for e-commerce companies.
I do see things otherwise. Facebook has been engaging in innovative initiatives aiming at transforming its business and finding new market opportunities. On top of launching Shops, Facebook just announced its Oversight Board earlier this month and acquired Giphy, a search engine for GIFs. These business moves are key for Facebook’s revamp and will contribute greatly to it maintain its leadership.
