Facebook launches Shops during the pandemic to bring more businesses online
A big new e-commerce initiative will add an Instagram shopping page, shoppable live streams and more
Facebook is making an important new impulse to e-commerce. The company today announced the launch of the Facebook and Instagram shops, a way for companies to set up free storefronts. The shops, which will be operated by third-party providers like Shopify, BigCommerce and Woo, are built to turn the social network into a shopping destination of the highest order.
CEO Mark Zuckerberg said in a live stream that expanded e-commerce will be necessary to start rebuilding the economy as the pandemic continues. "If you can't open your store or restaurant physically, then you can still take orders online and send them to people," he said. "We 're seeing a lot of small businesses going online for the first time without ever having an online business."
Shops launch comes as stay-at-home orders related to the COVID-19 pandemic have contributed to high e-commerce sales. The pandemic has also been catastrophic for small companies, with a third claiming that they stopped working in a Facebook and Small Business Roundtable poll. An additional 11 per cent say if the current condition persists, they will fail within the next three months.
Online sales were, however, a bright spot for small companies. At Etsy, where lone entrepreneurs relied heavily on knitting fabric face masks and selling bakery pastries, revenue has doubled from three years ago. Facebook hopes that getting more small businesses online would allow them to thrive while generating major new business opportunities for Facebook itself.
While shops are free to create, in advertising, payments, and other services, they could create significant new business opportunities for Facebook. Businesses will be able to purchase ads for their shops, and they will be charged a fee when people use Facebook's checkout option.
Zuckerberg said shops will improve the standard web trade experience by storing the payment credentials of users in one place that they can use on any Facebook or Instagram storefront afterwards. More than 160 million small businesses currently use the company's software.
Shops can be found on the Facebook pages and profiles of Instagram businesses, and they can also appear in stories or be promoted in ads. Items made available for purchase by businesses will appear in the shop, and users can either save items or place an order.
Businesses can use Messenger, Instagram and WhatsApp to handle customer support issues. The company eventually plans to allow you to browse the store catalogues and make purchases directly from the chat window. It also plans to allow live-stream shopping, allowing brands and creators to tag items from their Facebook catalogues to appear at the bottom of the live videos.
Facebook also works on incorporating loyalty services into shops. "You will be able to see your points and rewards easily, and keep track of them," the company said in a blog post. "And we're exploring ways to help small businesses create, manage, and surface a Facebook Shops loyalty program."
Instagram will showcase brands on its existing shop account, which already highlights items that are available for purchase. Later in the year, it plans to add a dedicated shopping tab to its navigation bar.