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Facebook expands social media dominance with ecommerce: meet "Shops"

Thursday, May 21, 2020 by Robinhood Snacks | Disclosures
_Facebook Shops-ing spree_

Facebook Shops-ing spree

Hold the (i)Phone... This could be "Bezos is worried"-worthy. Facebook unveiled a new product letting businesses set up full-on digital storefronts across FB/Instagram. It's called Facebook "Shops" — unexciting name, but spicier than Shopify's newly launched "Shop" app (the "s" is key). Shopify isn't (openly) mad though — it's actually partnering with FB, providing its ecommerce tech/platform to help get Shops up and running:

  • In 2016, FB had 60M business pages and 4M businesses actively advertising — just imagine how many it has today (because we don't know). Take all those FB business pages racking up likes, and add all the Instagram brand pages dropping pastels in your feed.
  • Shops turns these business pages into digital storefronts — FB has already dabbled in ecommerce (with Marketplace and Checkout), but Shops is the whole shebang.

Let's see the receipts... Facebook couldn't have launched this at a better time. With businesses suffering from shutdowns (especially small ones), many who shrugged off the ecommerce life are now moving online out of necessity.

  • Businesses get: A free and easy way to turn their social media pages into storefronts.
  • Facebook gets: A "small fee" per purchase — a key revenue differentiator as its profit puppy ads sales decline during this recession.
  • It's very much in Facebook's interest to make sure businesses don't go under, so that these businesses have the money/reason to keep advertising on Facebook/Instagram.
THE TAKEAWAY

Social media + ecommerce is a powerful duo... And Facebook is already a Master of One. Many of our purchasing decisions are influenced by the things we see on social, partly because it's where we spend so much of our time. And while Amazon is the master of ecommerce, it doesn't have 3B users scrolling through its feeds for #inspo.