Facebook Shops: What You Need to Know About the New Social Storefront

Ron Dodby Ron Dod

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Using Facebook to reach target shoppers is becoming increasingly easy thanks to the ever-expanding eCommerce features being integrated into such social media platforms.

While Facebook has been seeking new ways to support and break into the eCommerce space for years, the impact and ramifications of the COVID-19 pandemic has given the digital network the opening it has been seeking.

Sure, Facebook and Instagram both supported eCommerce efforts to a certain degree with features like the Facebook Marketplace, Instagram Shoppable posts and the like, but the company is ramping up its retail game to a whole new level with the introduction of Facebook Shops.

Ink Meets Paper Shop

Framed as a means to help businesses mitigate the economic fallout resulting from coronavirus-related store closures, Facebook CEO Mark Zuckerberg acknowledged that this move will not “undo all the economic damage” but that it can undoubtedly aid retailers. Zuckerberg also went on to state that:

“I do think we’re going to continue living more of our lives online and doing more business online.”

Given the potential for Americans to continue living with the effects of the coronavirus pandemic for quite some time, is it essential for retailers to understand where to focus their marketing dollars during COVID-19 and beyond.

To help provide some insight into that matter, here is everything that sellers need to know about the new Facebook Shops feature.

Facebook Shops Explained

In a nutshell, Facebook Shops is a simplified version of a retailer’s dedicated online store, hosted on Facebook and Instagram. This feature allows retailers to get their goods in front of the billions of users that live on these platforms.

As Facebook explains:

“Facebook Shops make it easy for businesses to set up a single online store for customers to access on both Facebook and Instagram. Creating a Facebook Shop is free and simple. Businesses can choose the products they want to feature from their catalog and then customize the look and feel of their shop with a cover image and accent colors that showcase their brand. This means any seller, no matter their size or budget, can bring their business online and connect with customers wherever and whenever it’s convenient for them.”

Through this feature, retailers can import their products to Facebook and Instagram, providing their followers and other users with a shopping experience that seamlessly blends in with the rest of the social network’s UX.

Additionally, retailers can create a distinct look and feel for their store by customizing the layout of the Shop and colors with which it is branded.

Branded Facebook Shop Page

Moreover, as part of the Facebook Shops announcement, the company proclaimed that it has partnered with the likes of Shopify, BigCommerce, WooCommerce, CedCommerce, Channel Advisor and others as a means to provide sellers with the tools necessary to simply and successfully manage their Shop and the ads tied to this feature.

As Shopify stated about the feature:

“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.”

Here is how the process works:

Eligible retailers can access the “Shop Builder” platform for the Facebook Page tools. Here, merchants can upload their products individually, or they can connect the Shop to their existing eCommerce store if they leverage one of the companies that Facebook has partnered with for this program.

Set up shop popup

Facebook’s entire goal with this feature is to make it as simple as possible to create a Shop so that retailers can reap the most benefits possible. Furthermore, while sellers can build both Facebook and Instagram Shops from a single interface, this feature is not immediately available to all retailers. As is stated in the Shops on Instagram announcement:

“Starting today, we will begin a phased roll out of shops to all businesses globally on Facebook and Instagram Shopping. We will start with eligible businesses who use Instagram Profile Shops and will expand access over the next few months. Eligible businesses will receive an email when their shop is ready to start customizing.”

Shops will be discoverable not only through a merchant’s Facebook and Instagram profiles but through Stories and paid ads as well. However, custom colors and discoverability through Stories are not the only features that Shops have to offer.

Facebook Shops Features and Future Plans

One of the more essential features that Facebook has connected to Shops is the ability to customize the user experience based on a shopper’s browsing behaviors.

In a blog post on answering privacy questions about Facebook Shops, the company stated that:

“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. This means your activity across our apps may influence what you see in Shops, and your activity in Shops may influence what you see elsewhere on Facebook and Instagram.”

Moreover, while businesses are likely to handle customer support issues through Messenger as social media has become a primary portal for such activities, Facebook has bigger plans for the standalone app. In the not-so-distant future, Facebook plans to enable shoppers to browse seller catalogs and purchase products directly from the chat interface.

However, what might be more intriguing is that Facebook is working to enable merchants to integrate their eCommerce loyalty programs with Shops.

As the company noted in its Shops announcement blog:

“You’ll be able to easily see and keep track of your points and rewards. And we’re exploring ways to help small businesses create, manage and surface a loyalty program on Facebook Shops.”

In fact, back in March 2020, Facebook launched a pilot connecting loyalty programs with Sephora, thereby allowing retailers new methods of incentivizing transactions.

In addition to these crucial features, Facebook is also looking to integrate live video content into the Shops dynamic:

Facebook Live Videos

“People have been using live video on our apps to showcase products for years, from shoe stores announcing new sneakers to beauty influencers trying on different lipsticks. Now, we’re making it easier to shop for products in real time. Soon, sellers, brands and creators will be able to tag products from their Facebook Shop or catalog before going live and those products will be shown at the bottom of the video so people can easily tap to learn more and purchase.”

While all of this is extremely exciting, it is just the tip of the iceberg for what Facebook has in store for the Shops feature.

An AI-Powered Shopping Experience

Artificial intelligence has been shaping eCommerce for years. At this point, it is a near-ubiquitous technology. Naturally, Facebook is looking to integrate this tech into Shops.

On the same day that the announcement was made about Facebook Shops, the company posted a second publication on how AI is transforming the way people shop. In this piece, Facebook discussed several artificial intelligence technologies that will underpin Shops. Dubbed GrokNet, this AI system enables Facebook Shops to rapidly transform into a futuristic shopping experience.

As the blog states:

“Our new system, GrokNet, can understand precise specifics about what’s in nearly any photo. We’ve also built technology that can automatically turn a 2D phone video into an interactive 360-degree view…. We’re also using GrokNet to test automatic product tagging suggestions on Facebook Pages to help people discover items from businesses they like.”

This is massive news for retailers given that, up to this point, features such as 360-degree product views have been something reserved for major retailers.

As far as the product tagging component is concerned, GrokNet can identify and determine the attributes of products (color, style, etc.). This means that, when further developed, retailers will be capable of rapidly deploying product catalogs by merely photographing an item and uploading it to Facebook. Therefore, much of the work that goes into optimizing images for visual search will soon be handled by Facebook.

On the consumer side of things, the implications of GrokNet also mean that shoppers will be able to shop for products by merely taking a picture of something they like and uploading that image to Facebook or Instagram.

Moreover, Facebook reports that GrokNet is so sophisticated that the system is capable of identifying partially-obscured objects, like a shirt that someone is wearing underneath a jacket.

While the system likely still has many iterations to go before reaching perfection, this is a profound leap forward, nonetheless.

A Transformation in eCommerce

Facebook Shops and the technology that underlies the feature could mark a radical turning point for the eCommerce industry. Given that Zuckerberg has noted that Shops will soon be accessible across Facebook’s family of apps, including Messenger, WhatsApp and the like, retailers will be able to reach billions of users with top-of-the-line features and interfaces. This gives financially-stressed merchants a new opportunity to thrive again.

Facebook Shop is always open

As Mark Zuckerberg stated in the live stream announcing Facebook Shops:

“All these tools are open for business even when your physical storefront can’t be.”

This is truly the crux of the matter for retailers. According to a Facebook Small Business Roundtable survey, the coronavirus pandemic has been devastating for sellers across the country, with over 31 percent of small businesses reporting that they have stopped operating. Another 11 percent claimed that they would fail within three months if the situation continued.

When it comes to eCommerce and the coronavirus, online sales have been the saving grace among many small business owners. Given that brick-and-mortar stores across the country have been shuttered for months, eCommerce has been the only thing keeping many afloat.

This is clearly evident given that it is widely accepted that COVID-19 has accelerated eCommerce growth by four to six years, with Forbes reporting that “total online spending in May hit $82.5 billion, up 77 percent year-over-year.”

Through the implementation of Facebook Shops, the social media platform is aiming to bring more small businesses into the fold, thereby providing them with a means to survive this uncertain time.

Spearmint Baby clothes

However, what Facebook, Shopify and others are banking on is that consumer behaviors will have shifted in a more permanent manner due to the coronavirus crisis. Fortunately for these companies and the sellers they support, data seems to indicate that folks are looking to concretize some of their COVID-based shopping behaviors.

As Digital Commerce 360 notes on the coronavirus’ impact on online retail:

“40 percent of consumers say they shopped a new website during the pandemic, and 45 percent of these shoppers will continue to shop that site following a positive experience.”

Additionally, as a U.S. consumer sentiment survey conducted by McKinsey which found that:

“Consumers are starting to adopt new behaviors, including shopping on new websites, shopping at new grocery stores, trying curbside pickup, getting groceries delivered, using telemedicine, and trying videoconferencing for professional or personal reasons… Consumers who have switched to new brands or retailers largely intend to stick with them, with nearly two-thirds of consumers who have switched to a store brand indicating an intent to continue.”

These two reports clearly indicated that there is a market and tremendous potential for the success of Facebook Shops.

However, it should be noted that while this move by Facebook certainly stands to benefit many retailers across the world – small and large – this is not a purely altruistic endeavor on the part of Zuckerberg and his cohorts.

Ulterior Motives

Shops are free to create for retailers and could become a significant source of revenue for those who opt to leverage the feature. However, the influx of new merchants also spells potential business opportunities for Facebook as it stands to generate revenue through advertising, payments and other services.

Truthfully, this move couldn’t have come at a better time for Facebook, given that many massive corporations have opted to pause their Facebook ad campaigns as a result of the polarized political climate. This news comes hot on the heels of Facebook and its family of applications seeing flat year-over-year advertising sales back in April.

Therefore, it is only natural that Facebook would want to bring in a fresh flood of retailers of all sizes to help compensate for its recent advertising losses. However, given that economic slowdowns can be a golden opportunity for eCommerce brands and Facebook ad prices are the lowest they have been in many years, sellers are in a fantastic position to increase their market share through Facebook and Instagram.

If retailers see that they are capable of generating sales through Facebook and Instagram, there is a good chance that they would seek to capitalize on the opportunity by running advertising campaigns through the portal.

Retail Sales are up

Moreover, given that U.S. retail sales are up a record 17.7 percent in a partial rebound, the likelihood of scoring sales through Facebook is looking hopeful.

However, it isn’t just in advertising that Facebook could make up for its recent losses. The sales that are generated through Facebook Shops could also end up serving as a substantial source of revenue for the social media website.

Facebook’s vice president of ads, Dan Levy, stated that, while the real monetization scheme for Facebook is the connected advertising options, the company will charge a “small fee” on each transaction.

Depending on the number of merchants that utilize the Shops feature and the number of users that find it to be an interesting, exciting and convenient way to shop, Facebook could be collecting “small fees” on millions of sales per month.

 Final Thoughts

While Facebook Shops certainly seems to be an exciting opportunity for online retailers, there is definitely a lot of information to process. Additionally, details about the project are still rolling out as Facebook finalizes details and announces new features and integrations.

However, what is clear is that Facebook is about to become a much more retail-friendly platform, providing its 2.6 billion users with on-site and in-app buying options.

Given the massive uptick in eCommerce transactions, driven by the COVID-19 crisis, online merchants and small business owners that take the leap to the digital realm will be in a fantastic position to reach consumers and get their products in front of buyers.

That said, if sellers want to do more than make up for lost time and money, investing in Facebook advertising campaigns can help to get retailers up to speed and help to increase their market share.

If your brand wants to ensure that it runs attention-grabbing, conversion-optimized Facebook ads that increase business revenue, reach out to Visiture’s skilled social media advertising team.

Our seasoned social media PPC professionals can help your business develop tailored campaigns that engage consumers at the exact moment they are ready to buy, bringing business right to your digital doorstep.

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