Facebook is adding "Shops"
22 May 2020 | Health
In an interview with Business Insider, Facebook VP of Ads and Business Platform Dan Levy said the company had sped up its work on its shopping tool to help support businesses that might make use of it and are currently under immense strain because of the pandemic and associated economic crisis.
"We knew this was the future of where we were going, supporting online commerce," he said. "Now it's just happening a lot faster."
Facebook Shops allows businesses to create digital storefronts on the social network, where they can host "catalogs" of their products, and will either link out to places to buy the products or allow users to purchase them directly on Facebook.
It will live inside both Facebook and Instagram, and there are plans to add it to messaging apps WhatsApp and Messenger as well eventually. Instagram is also creating a dedicated shopping destination where users can find products to buy - and in a sign of the emphasis the company is now placing on e-commerce, Instagram Shop will be made a permanent button on users' navigation bars on the app home screen later this year.
Facebook is also letting brands and creators who use its live video streaming tools tag products in their videos, allowing for the possibility of TV-style shopping channels on Facebook and Instagram, as well as letting influencers plug their sponsors when they go live.
And the company is also exploring ways for users to link loyalty programs they have with businesses to their Facebook profiles.
In recent years, Facebook has been throwing more and more weight behind the potential of e-commerce as an area of growth for the business, with previous efforts including a checkout feature and ways for brands to tag products in posts on Instagram. In mid-2019, Deutsche Bank analysts estimated e-commerce on Instagram alone would be netting a cool $10 billion in revenue a year for the company by 2021.
With lockdowns forcing hundreds of millions of people to stay home, adding deeper shopping functionality to Facebook gives it an opportunity to benefit from the vast increase in online shopping suddenly occurring.
"We're seeing a lot of small businesses that never had online presences get online for the first time," CEO Mark Zuckerberg said in a livestream announcing Facebook Shops on Tuesday. "For a lot of small businesses in this period, this is the difference between staying afloat and going under."
Similarly, e-commerce may help to diversify Facebook's extremely advertising revenue-reliant business model. The coronavirus has caused economic devastation around the globe, and that has translated into plummeting ad spend by advertisers. – Business Insider sa