Facebook Shops launched in May 2020 and will be rolled out incrementally over the next 6 months to a year. Shops will allow ecommerce and other business owners to sell directly on Instagram, Facebook Messenger, Whatsapp, and of course Facebook.
Facebook is one of the spots online where people spend the majority of their time, which is why selling on Facebook has been an attractive opportunity for some time.
Now that Facebook Shops are live in the US ahead of schedule, the implications of this entirely new sales channel are enormous, especially for D2C brands.
Here’s how we’ve broken down what to expect from Facebook Shops, and what marketers should know before falling behind:
- What are Facebook Shops?
- How Facebook Shops are different and what’s new?
- What marketers need to know about Facebook shops
- Additional implications of Facebook Shops
- Possible downsides and unanswered questions
- How to create a Facebook Shops page
What are Facebook Shops?
Facebook Shops make it easy for businesses to set up an online store for consumers to access on both Facebook and Instagram.
Creating a Facebook Shop is free and only takes a few minutes to set up. 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 products online and connect with consumers where it’s most convenient for them.
People can find Facebook Shops on a business’ Facebook page or Instagram profile, or discover them through Stories or ads. From there, consumers can browse your full collection, save products they’re interested in and place an order either on the business’ website or without leaving the app if the business has enabled checkout.
And just like when you’re in a physical store and need to ask someone for help, in Facebook Shops consumers will be able to message your business through Messenger, WhatsApp, or Instagram Direct to ask questions, get support, track deliveries and more.
Also coming in the near future, you’ll be able to view a business’ Shop and make purchases right within a chat in Facebook Messenger, Instagram Direct, or WhatsApp.
How Facebook Shops are Different & What’s New?
Both Facebook and Instagram already supported some forms of ecommerce. For example, Facebook has its Marketplace and will likely make an even bigger push now through its Libra cryptocurrency initiative, while Instagram allows users to buy products featured in posts and ads.
But Facebook’s new features go even further, enabling businesses to create a complete Facebook Shop.
The new centralized shopping experience is rolling out on both apps now, with a dedicated shopping tab coming to Instagram’s navigation bar in the next few months.
So, what do Facebook and Instagram Shops mean for Facebook as a business?
- Acceleration and gateway for Facebook’s Libra currency & Facebook Payments.
- Increased ad spend with a flood of new merchants to the platform.
- Places Facebook into more WeChat style ecommerce, and will take market share away from certain ecommerce players.
- Facebook Chatbots become essential to marketers as Messenger & WhatsApp will play a major role in driving more conversions and sales.
Additionally, it appears there will be no processing fees to merchants that elect to integrate an existing third party ecommerce platform like Shopify or WooCommerce.
However, if you choose or need to use Facebook’s native checkout, some type of processing fee will likely be applied. Facebook’s VP of Advertising Dan Levy said that the company will charge “small fees” on each purchase.
Ultimately, monetization for Facebook via Shops will come in the form of more ads being placed across the platform.
What Marketers Need To Know About Facebook Shops
First of all, if you have access to create a Facebook Shops page (currently limited to US, UK, and a few other markets), this is something to jump on as early as possible.
Facebook likes to reward users that utilize new features. This means lower cost for reach or CPMs, and therefore if you have the same conversion rate or even better conversion rates than your existing ad campaigns, you’ll be lowering your cost per acquisition (CPA) and likely increasing ROI.
Facebook Shops is a new way to present, market, and sell your physical products, so don’t be the last one to the table out of your competitors.
With a Facebook Shops page you can:
- Organize your products into collections and categories
- Add an unlimited number of products
- Communicate with your customers through the page directly with Messenger
- See analytics for your sales, visits, and more
- Get your products appearing in Facebook Marketplace, giving you access to a much larger base of potential customers.
Facebook ad implications of Shops
Facebook advertising will become even more important. This means the ability to stand out among the competition will require an increase in effort and creativity. Make sure you have the best digital marketing tools for images and ad management.
Something to keep an eye on regarding Facebook ads will be how new Facebook Shops impact both ad performance and last-click attribution.
Last-click attribution will be easier to determine when someone checks-out on Facebook. You won’t even need to rely on a properly installed Facebook Pixel.
As for ad performance, this too could significantly improve due to a couple of main factors:
- One-click checkout on Facebook Shops reduces friction, therefore making it easier for consumers to make a purchase. When Amazon introduced its one-click checkout option, overall sales increased by 5%.
- When Facebook sees that certain consumers are more likely to convert on Facebook Shops than they are when redirected to a website, Facebook’s algorithm will pick up on it. This means that Facebook will automatically send certain consumers ads that direct them to your Facebook Shops page, and vice versa.
Facebook Shops can also be featured in ads and Stories. So consider how you’ll want to incorporate those ad channels into your overall strategy.
Lastly, Facebook Messenger ads are going to significantly rise in popularity. In fact, Messenger ads are already performing better than regular Facebook ads due to their conversational and engaging nature. In other words, you should immediately consider using Messenger ads if you’re not already.
Live stream shopping on Facebook and Instagram
People have been using live video on Facebook’s apps to showcase products for years, from shoe stores announcing new sneakers to beauty influencers trying on different lipsticks. Now, Facebook is 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. Facebook has starting to test this with businesses on Facebook and Instagram, and it will be rolled out more broadly in the coming months.
This means you can go on Instagram or Facebook Live and the products you’re discussing will actually show up at the bottom of the screen for people to engage with a click or tap.
Facebook Shops is likely to make a large impact on the number of ecommerce companies that will utilize Facebook Live or Instagram Live as a channel for making sales in real-time.
Very few marketers and ecommerce brands have ever considered selling their products via live stream. This is especially true in the US, however, many Eastern countries like China and Japan have seen an uptick in ecommerce sales via live stream.
This is something to start planning for now and giving a shot because if conversion rates turn out to be high, the implications for your business could be massive.
A win for influencer marketing
Adding sales capabilities to live streaming on Facebook and Instagram Shops is also a major win for influencers that can sell companies products in real-time.
Not only does it give influencers a new channel to sell products in real-time, but there’s also the added benefit of direct attribution of sales.
This eliminates much of the complexities associated with properly attributing sales to influencers and affiliates who deserve to get paid.
Loyalty programs for Facebook Shops
Facebook has also begun testing ways to make it easier for consumers to earn rewards with the businesses they love by enabling companies to connect their loyalty programs, like the points program at a local cafe, to your Facebook account.
Facebook Messenger chatbots
As if there weren’t enough marketing tools for Facebook Messenger chatbots, now Messenger bots will play a major role in driving real-time conversions and sales.
Facebook Messenger is already one of the top free Shopify apps to boost ecommerce sales. And it just got a lot more interesting.
By adding Facebook Messenger to your Facebook ecommerce store, customers can view your product catalogs within the Messenger app and make purchases.
Previously, if a consumer found something they wanted to buy, you would need to redirect them to your website ecommerce checkout page. However, now consumers can buy straight from your Messenger chatbot.
In order to fully dominate Messenger marketing, you’ll need the best chatbot for Facebook Messenger.
Customers.ai chatbots have the largest suite of Facebook Messenger marketing tools for monster engagement and scalable lead-driving abilities.
Check out our complete guide to using Facebook Messenger and automation tools as a marketing channel.
These hacks can be yours with a free chatbot for Facebook Messenger using Customers.ai.
Why Facebook Shops will be great for launching new products
One thing that Amazon lacks is features that marketers can use to effectively inspire consumers to buy new products. For D2C brands, marketing efforts for product launches are focused on other channels.
However, with Facebook and Instagram Shops, you don’t have that problem. Finding new products and being able to promote them to your audience is much easier due to the ability to effectively target and engage with your audience.
Additionally, Amazon simply doesn’t have the personalization capabilities that Facebook has to recommend products that are extremely relevant to individual consumers with a high probability to convert.
User data and the ability to serve highly targeted ads are Facebook’s top assets. The usefulness of these assets will only increase with the rollout of Facebook Shops.
Amazon, however, will still have an SEO advantage over Facebook, as it’s extremely unlikely that Facebook Shops will be receiving organic product placements on Google Search.
Additional Implications of Facebook Shops
An implication to consider is being able to eliminate the usage of Facebook pixels to send data back and forth from your website to the Facebook platform.
If people are checking out right on Facebook, all the data will live right there, which further eliminates some of the complications for marketers to keep track of where sales are coming from as well as measuring ROI.
How user data will be used for Facebook Shops
One of the major differentiating factors that are exciting for Facebook ecommerce is, of course, the data available from each user profile.
What’s new and exciting for Marketers however is that Facebook will be using machine learning for more personalization capabilities to automatically identify and tag products and photos without you (the business) needing to do so. Then, the products those people are shown will be based on their history and preferences.
Difference between Facebook Shops and Instagram Shops
Facebook has described Shops as a “build once and render anywhere” solution, and that “the shop itself will be very consistent, whether it’s on Facebook or Instagram.”
What will differ is how consumers discover the shops, whether it’s via the Facebook Marketplace or a product tagged in a photo on Instagram.
Facebook plans to launch Instagram Shops later in the summer, which will allow users to browse products directly from Instagram Explore and eventually to jump into a shopping experience from the app’s main navigation tab.
What Facebook Shops mean for Shopify and other ecommerce platforms:
Facebook Shops will not replace eBay, Amazon, Shopify, Etsy, etc. It’s just another distribution channel, but with more integrations with Facebook, Instagram, Messenger, and Whatsapp.
So, continue to run your own online storefront and invest in owning your own lists, assets, and traffic. This isn’t a Shopify killer, and you should own as much of your data as possible.
Possible Downsides & Unanswered Questions
Who owns the data?
You always want to own your data. So, it will be interesting to see how much user data Facebook will provide business’ via Shops. Many companies may end up deciding that the data they can gather by sending traffic to its own checkout pages outweighs the benefits of Facebook’s native checkout.
Up-sells and average order value (AOV)
What will the capabilities be for Facebook Shops to make up-sells vs your ability to up-sell on your own ecommerce website?
Without certain capabilities, you could risk lowering your average order value (AOV) by using Facebook’s native checkout features.
Brand search traffic
Facebook Shops could have an adverse effect on brand searches performed on Google. If consumers can find your business and your products via Facebook, Instagram, Messenger, and WhatsApp, as opposed to your website, they may go straight to their favorite app and find your business there instead.
Facebook ad CPM (cost per thousand impressions)
Shops will further saturate the Facebook ad market, which could result in higher CPMs for regular Facebook ads.
Additionally, with more ads being placed and ad types available, you’ll also want to consider that your content is going to need to improve to capture consumer attention.
So, as many ecommerce brands already do, you’ll need to play around with images to test what works best for your Facebook Shop conversions. Try some lifestyle images and compare them to the performance of flat images.
Take a look at our list of the best Facebook advertising tools to advance your ad performance.
How To Create a Facebook Shops Page
Some of the modern ecommerce solutions already have an integration with Facebook and will set up a Shop page for you automatically. This includes Shopify, WooCommerce, BigCommerce, and others.
All you have to do is connect your existing platform to Facebook it will link your external ecommerce store and the Facebook Shop page together. That means that you’ll be able to take care of your orders and products in a single place and have everything synchronized between both platforms.
If you’re not already using one of the ecommerce platforms that easily integrate with Facebook Shops, you can set up a Facebook Shops page manually.
Follow these steps for setting up a Facebook store manually:
- Go to your Facebook Business Page and configure the Shops page
- Set up your shop details
- Configure your payments
- Add products to your Facebook store
- Managing your orders
- You’re done!
For further detail and instructions, go to Facebook’s business pages and search for “Shops”.
Important Next Steps
- Create a free Facebook Messenger bot today with the new Free Forever Customers.ai Stay Connected special edition.
- Talk and learn about chatbots with other enthusiasts. Join Customers.ai Island, a Facebook group of over 35k marketers and entrepreneurs that are ready to support you.
- Advance your marketing performance with Chatbot University, a free chatbot tutorial and training area for chat marketers.