Facebook busted a major move and swiped at Amazon and eBay with the launch of Facebook Shops, which lets small businesses set up free online storefronts that will stretch across Facebook and Instagram, and eventually across its Whatsapp and Facebook Messenger universes as well.
Considering there are 2.6 billion Facebook users and 1 billion on Instagram, that’s quite an addressable audience.
“The basic idea is, anyone with a small business can easily start a shop across our apps to sell directly,” said Facebook founder and CEO Mark Zuckerberg in a livestream. “If you visit someone’s shop, you might see a story or a featured product, or even check out and buy the product there. This is new for us. A lot of businesses use our social channels to get word out. Now with Shops we’re adding a new way for them to sell directly.”
Users across Facebook and Instagram can find Facebook Shops on a business’s page or Instagram profile, or through Stories or ads. They can then browse the catalog, save products and place orders on the company’s website.
For those participating in Facebook’s beta of Checkout, they can swipe and buy right from Facebook or Instagram, but there is a per-transaction fee. Shops are created with a few clicks, allowing businesses to customize the look and import their product catalogs.
Merchants can also connect their loyalty programs to Facebook Shops so customers can track rewards and points. Another feature allows merchants to add shoppable product tags below videos on Facebook and Instagram, where 800 million users view them every day.
“Shops are free and easy to create,” Zuckerberg said, adding he has been personally involved in the project. “It gives you the same tools to build and operate online storefronts that global brands have had for reaching their customers.”
Facebook listed seven integration partners with Shops, including Shopify, BigCommerce, WooCommerce, ChannelAdvisor, CedCommerce, Cafe24, Tienda Nube and Feedonomics. Adobe’s Magento Commerce platform was conspicuous by its absence.
Zuckerberg was joined on the livestream by Shopify founder and CEO Tobi Lutke, who talked about the partnership and working on Shops together.
“What everyone needs right now, especially in this crazy situation with COVID-19, are new buyers, and small businesses need a way to find them,” Lutke said. “This is going to be an incredibly powerful new reality for generating revenue in the retail space, with a powerful tool built natively into the Facebook ecosystem.”
While emphasizing the free nature of setting up Shops, Zuckerberg noted it will become a revenue stream for Facebook through small businesses advertising across its platforms.
“Our business model here is ads,” he said. “Rather than charge businesses for Shops, we know that if Shops are valuable for businesses, they’ll in general want to bid more for ads and we’ll make money that way.”
He added Facebook won’t share what users buy in Shops “with your friends or anyone else without your permission.”
MCM Musings: While certainly a great resource right now for struggling small business owners looking to expand their online audience and find new buyers, Facebook Shops will certainly pay out for Zuckerberg and company over time in the way of ad revenue. And what will it mean for the thousands of smaller companies (not named Shopify, Woo Commerce, etc.) that provide web storefront creation services? It certainly has Jeff Bezos’ attention, although he’s hardly quaking in his boots. Shops is also a major upgrade of the shoppability factor within Facebook’s vast cozy ecosystem, making it that much stickier as it drives more impulse buying within the walls and attracts legions of new sellers.