Today, Facebook announced Facebook Shops, a new feature in partnership with Shopify, BigCommerce, Woo, and a number of other ecommerce platforms, which will allow consumers to directly purchase products from small businesses from the small business’ Facebook page or Instagram profile. With this exciting news, the ecommerce world is abuzz with questions about the new feature as word continues to spread–who can use it? Where is it? How is it different from Marketplace? And so much more.
What is absolutely certain is this new feature (and the subsequent planned Instagram release) will be a game changer for small businesses. And Facebook, of course. They stand to make a lot of profit from this new venture, even though the social media platform states they will only charge “small fees” for reach transaction made on the platform.
In an effort to collect all questions and answers in one place, we have scoured the web to find the source of truth on new features. As more news unfolds about the new Facebook feature, we will continue to update this post. In the meantime, stay up to date with new ecommerce news by subscribing to the Morning Matcha newsletter!
What is Facebook Shops?
Facebook Shops is a new Facebook feature announced May 19, 2020 via a livestream with CEO Mark Zuckerberg. This feature was created as a way to address the economic hardship small businesses faced in the wake of COVID-19, and as a way to make discoverability and shoppability easier for consumers. Consumers can shop a business’ Facebook page or Instagram profile directly, instead of leaving the platform to browse product offerings. There are also plans to extend this feature into WhatsApp and Messenger.
In short, Facebook Shops is a simplified version of your ecommerce store that will live directly on Facebook and Instagram mobile apps. Consumers can shop your product offerings directly through your Facebook page or Instagram profile with an experience that feels native to each app, all while you create featured product collections into tiles that match the branding of your store. In the meantime, all product management, inventory, and any store operations will still exist within your third-party store.
Is Facebook Shops Free to Use?
Yes, and no. All businesses will be able to create a shop for free, though Facebook’s VP of Ads Dan Levy has stated that the social media platform will charge “small fees” for any purchases made through Facebooks’ “Checkout” feature. Vox reports that fee will equate to 5 percent, lower than fees charged by Amazon and eBay but higher than typical payment processing fees. The article clarifies that this 5 percent fee only applies to the Facebook “Checkout” feature, not payments that are accepted using another e-commerce software firm. Regardless, Facebook has made it clear that this venture is not planned to be Facebook’s big money-maker. The platform will still rely on advertising for monetization.
Is Facebook Shops a channel separate from my Shopify, BigCommerce, Woo, etc. store?
No, this Facebook feature will integrate with third-party partners. Merchants will be able to manage their shop from within those third-party partner apps. As Shopify said, ” “Facebook Shops allows Shopify merchants to get control over customization and merchandising for their storefronts inside Facebook and Instagram, while managing their products, inventory, orders, and fulfillment directly from within Shopify.”
What ecommerce platforms does Facebook Shops work with?
Facebook has said that is partnering with Shopify, BigCommerce, Woo, CedCommerce, Cafe24, Channel Advisor, Tienda Nube, and Feedonomics for this venture. Merchants on these third party platforms will be able to manage their Facebook Shops directly from those third-party platforms in addition to any of their Facebook or Instagram Ads tied to that shop.
Is Facebook Shops different than Facebook Marketplace?
Yes, it is different. Facebook Marketplace is generally a “marketplace for all” to list their items for sale on a one-off basis, not generally associated with any one brand or store. Facebook Shops allows brands to host a unique store experience directly on their business’ Facebook Page.
Can I customize my Facebook Shop?
Yes. According to Shopify’s announcement post, merchants will be able to control control what products are featured and how they are displayed in their Facebook Shop, all while being about to manage their products, inventory, orders, and fulfillment from within Shopify (and presumably the other third-party apps Facebook with which Facebook has partnered. It seems brand colors and the organization of product collections will both be available with this feature.
How to I start a Facebook Shop? When will it be available for my business page?
While the feature was announced on May 19, 2020, it was not at this time made available to all stores. As with all large new features, rollouts have to be done gradually to avoid any potential hiccups in the process. That said, in Facebook’s announcement today, it was said that Facebook Shops will be available to all businesses globally over the coming months.
Will there be an Instagram version of Facebook Shops?
Yes! And in fact, it seems there already is. Shopify’s announcement and explainer post indicates that Facebook Shops as a feature will actually be available on the Instagram app first, with a Facebook business page version coming soon. Then again, other news coverage is saying it will be on Facebook first, and Instagram this summer. Time will tell! We will update as we learn more.
“If you already have access to product tags through the Instagram sales channel, Facebook Shops will automatically become available to you in the coming weeks and you will be directly notified. Facebook Shops can be created on Instagram, with a version for Facebook coming soon.” – Shopify
How can I prepare my Shopify Store to be ready for the roll out?
In conjunction with this announcement, Shopify announced the launch of a new, unified Facebook channel which will make it easier for Shopify businesses to grow across all of Facebook’s apps. With this new channel, Merchants will be able to connect their Shopify and Facebook business in one place. This new channel can be installed to Shopify stores today and its functionality will continue to grow throughout the year.
Shopify sellers will be among the first group of businesses with access to this new feature. In order to prepare for the Facebook Shops rollout for your store, Shopify merchants can set up the new Shopify Facebook channel, which will allow them to connect and set up their Facebook Shop as soon as it is available. If you already have product tags access through the Instagram sales channel, you’ll already be directly notified by Shopify when Facebook Shops is available to you.
Wasn’t a Facebook Shop and Shopping on Instagram already… a thing?
Yes, in a way. But let’s be honest, it wasn’t that great. On Facebook, you could set up a “Shop” section on your Facebook business page and then manually, painfully, one-by-one add the products you wanted to feature. Not so bad if you sold a handful of products, very tedious if you sold a larger catalog.
If you sold on Shopify or BigCommerce, the previous integration was a little easier, but still lacking. In this new feature, you’ll be able to effectively brand and organize your product line both on Facebook and on Instagram. On Instagram, meanwhile, the direct shopping experience on your Instagram profile will be a lot more seamless.
What about consumer data collection with Facebook Shops?
In a Facebook blog post, the company said ““As with other parts of Facebook, we use your activity from Facebook Shops to personalize your experience on our apps and show you more relevant content, including ads.” So, yes, it sounds like any purchases made on the Facebook Shops app will be tracked in some way to provide more targeted (or more creepy?) advertisements and content.
When you make a purchase on Facebook Shops, the business owner your purchased from will also of course receive your delivery and contact information. However, when merely browsing a Facebook Shop, Facebook will not provide personal information like a name or email address “unless you have given Facebook permission to do so.”
As for the people that follow you on Facebook, the same blog post clarifies that any purchases you make in Facebook Shops will not be shared with to your profile or your friends feeds unless you choose to share it.
Facebook has stated they also securely store and encrypt any personal payment card numbers and those card numbers will not be used in any way to personalize your Facebook experience through ads or content.
Will this be a game changer for ecommerce businesses?
We think so. Generally, anything that shortens the path to conversion leads to a higher conversion percentage. Shopify saw this recently with their new app, Shop. Stores using the Shop feature saw mobile conversions 1.91x higher than stores without the feature in Shopify’s initial study of thousands of their top stores. It is now unlikely this new Facebook feature will result in similar conversion metrics.
Are there any negatives to using Facebook Shops?
Time will tell, but our guess is aside from “small fees” (again TBD on the size) that are charged by Facebook for any purchase, there don’t seem to be any negatives. That said, to keep margins good it is always best practice to focus your marketing on growing your site traffic, not traffic to third party sites.
If merchants, when the time comes, choose to create a Facebook Shop for their business, they should continue to focus on marketing their owned site, improving their site UX, and developing a great on-site experience for their audience with quality content.
Facebook Shops is an exciting innovation in the ecommerce industry, but it is not a magic pill for businesses. All the old marketing rules will hold true: Focus on the customer, don’t be overly pushy with sales, and provide a brand experience that attracts new users and keeps old customers coming back.
Feature Image credited to Facebook.