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The rollout of the new Shops functionality from Facebook during the peak of a pandemic comes at a particularly opportune time. Across the nation, small business owners are struggling as they are being forced to keep their doors closed for months at a time. By some estimates, one-third of small businesses (like the kinds of mom-and-pop operations at your local suburban strip mall) have already gone under, and if this pandemic #stayathome order persists through the summer in some states, the toll on small business could be colossal. So, from this perspective, Shops for Facebook and Instagram could be a real game-changer, enabling small business owners to sell online even as their offline operations remain shuttered.
Details of Shops
To make Shops as easy to use as possible for small business owners, Facebook is partnering with some of the biggest names in online e-commerce, including Shopify, Woo and Big Commerce. The idea is simple: create a new “”Shops” tab within Facebook or Instagram, so that it will be possible to go online and sell products within minutes. Facebook Shops will go “live” first, followed by Instagram Shops during the summer.
It’s being presented as a major new e-commerce push by Facebook, and for good reason. For years, Facebook has looked for ways to build e-commerce into its platform, with the launch of Marketplace back in 2016 one of its biggest hyped events. But people, for whatever reason, have been relatively cold to the idea of mingling social media with social commerce, and given all the brouhaha surrounding Facebook’s privacy issues, it’s perhaps no surprise that people don’t want to hand over a big slice of the Internet e-commerce pie (and their payment details) to a monopolistic giant.
The new normal for online commerce
But the pandemic changes everything. The “new normal” in online commerce might very well be social e-commerce, and Facebook and Instagram could be the next big beneficiaries of the shift to online, remote life. In fact, some analysts have argued that Facebook could give Amazon a run for their money, if consumers decide to shift their attention to Facebook Shops rather than buying through Amazon. By some estimates, there are 160 million small business owners on Facebook and Instagram, so that could be huge if even a small fraction of them decide to take a big bet on Facebook Shops.
And, according to Facebook, they will be taking every step possible to convert the social network into a “shopping network.” In addition to buying directly from Instagram influencers via their Instagram shopping tab, you will be able to shop live streams. Any time someone goes live on Instagram, they can also list items for sale at the bottom of the live stream feed, so that someone can buy immediately once a cool new product is mentioned in a live video feed. And Facebook has said that it will make Messenger and WhatsApp available for customer support on these Shops, so that you can have a fully integrated shopping experience, all within Facebook.
A big win for Facebook
There’s a lot of money here to be made. For one, Facebook will take a small cut of every transaction or payment made via Shops, so the more you sell online, the more Facebook makes. Fair enough – any time you use a third-party platform to make sales, you have to be willing to give away a portion of the profits… And there’s a whole new ecosystem Facebook might be able to create. Small business owners looking to promote their Shops will likely buy new ads, which are the lifeblood of Facebook’s business. And they will also look to buy plenty of new services and features from Facebook as they upgrade the look and feel of their Shops.
As an added bonus, Facebook could get a lot of very good PR from Shops. After all, if Facebook HQ can spin Shops as a way to help struggling small business owners in a time of dire need, that’s a huge win. If and when there is a full economic recovery, people might point to the rollout of Shops as one of those steps that helped to turn the tide for small business. Any sales are better than no sales, and for the 160 million+ small business owners already with a Facebook or Instagram presence, setting up an online seems pretty much like a no-brainer these days.