Facebook rolls out Facebook Shops for direct-to-consumer brands – an eCommerce platform – amidst a COVID-weakened market, adding it to Facebook business pages and Instagram business profiles. Facebook Shops are here with a promise to make the shopping experience seamless and assist otherwise hands-tied direct-to-consumer (D2C) businesses, whether it’s a global brand or a local company.
The key ideas behind Facebook Shops are quite straightforward:
- Fast and direct sales to its extensively engaged audience
- Ability to create product catalogs with unlimited products, collections, and stats
- Data integration from your existing eCommerce platforms to your Facebook Shops
- Opportunity to develop a different type of ads
- Direct purchases from the app, and more
Facebook Shops are easy to manage and require minimum technical knowhow from the merchants. Plus, Facebook has collaborated with eight of the biggest direct-to-consumer eCommerce solution providers, including WooCommerce, Magento, BigCommerce, and Shopify, to integrate with their shopping catalogs automatically.
Facebook and Instagram Shops for Direct-to-Consumer Brands – A Common Paradigm
As the new Facebook and Instagram Shops have a common core, it’s enough to have one online store on Facebook and Instagram. What’s new, now, is that similar to the checkout function on Facebook Shop, Instagram Shop provides a possibility for direct purchases right from the app. Both platforms have a ‘Shop’ tab and a product catalog to them, which direct-to-consumer brands can manage via the Commerce Manager and Catalog Manager. They are easily customizable with brand colors, logos, and more.
WhatsApp Opportunities
Let’s not leave WhatsApp behind. Facebook Shop users could sync their business information from their Facebook Page with their WhatsApp Business account. Though WhatsApp Business still struggles to integrate with the payment systems, eventually, Facebook plans to launch a feature enabling direct purchases from WhatsApp (along with Messenger and Instagram Direct). For now, it allows communicating with customers redirected from Facebook. And WhatsApp Business API lets even larger businesses to send messages to any number of shoppers.
The Story Behind the Launch of Facebook Shops for Direct-to-Consumer Brands
What was the reason behind the big launch?
Mark Zuckerberg went live on May 19th, 2020, sharing new product updates and launching Facebook Shops. The team released a ‘State of Small Business Report,’ which found that 31% of those companies just stopped operating, whereas, for personal businesses, this percentage was as high as 52%. “Two thirds of new jobs in this country happen because of small businesses and so that means what’s happening with small businesses has always been important, but it’s more important than ever.”, shares Facebook COO Sheryl Sandberg.
Interestingly enough, Facebook Average Revenue Per User (ARPU) for the first quarter of 2020 is $6.95 compared to $8.52 for the last quarter of 2019. This downgrade seems to be directly influenced by the COVID-19 pandemic.
And was it one more reason for Facebook launching a new eCommerce space for direct-to-consumer retailing?
5 Benefits of using Facebook Shops for Direct-to-Consumer Brands:
Both Facebook Shops and Instagram Shops originate in the innate human need for social connections. Facebook first built its base as a warm place for friends and family, and only later became a trustworthy place for trade. Well, wasn’t that the plan, after all? Now, 1.73 billion people, on average, use Facebook daily as for the Q1 of 2020 (data source: Statista). It is an 11% increase year-over-year. The majority of Facebook users are the ‘spenders’ of the population – aged between 25 and 34 years – which makes the platform an efficient marketplace, capable of guaranteeing high sales conversions.
Number of monthly active Facebook users worldwide as of 2nd quarter 2020 (in millions)
Are you wondering if it is worth investing in Facebook Shops as an eCommerce platform?
According to Facebook, there are over 180 million businesses on the platform. And with the launch of Facebook Shops, the numbers are sure to grow.
Below are the five key benefits of using Facebook Shops:
- Shopping on Facebook versus outside Facebook
The number of Facebook Messenger users goes as high as 1.3 billion, solely in the US (data source: Statista). It indicates an excellent opportunity for direct-to-consumer brands to build an entire sales strategy and convert potential customers right inside the app. Driving sales from the initial point of ‘interest’ and going through all processes to ‘close the sale’ on the same platform offers many advantages. For example, to shop in Messenger, your customers can start a conversation with your brand, and then go to your Facebook Shop to check out the product catalog.
Being available to your customers on their fingertips and solving their concerns, clarifying doubts about a product/service allows the brand to keep the customer engaged until the last mile (read sales). Whereas, tossing them from the Messenger to your website might cost you a sales deal! These days we all have at least ten tabs and 30+ subtasks waiting to steal our attention each second. We are continually attacked by texts, push notifications, ads, Facebook posts, etc. Our minds are like that of a goldfish, finding itself hooked to the fleeting stimuli. In such a scenario, sending a potential customer elsewhere, and hoping they will find their way and complete the purchase transaction, is expecting too much.
- Easy Cataloging on Facebook
Cataloging is made simple at Facebook Shops. They store information on the items you want to advertise or sell across Facebook and Instagram. Whenever you have changes to your product information (including product images, product descriptions, price, variants, etc.), you can easily update it from the Catalog Manager. Sellers can also organize products into collections (sorted by ‘Season,’ ‘Always-on,’ ‘New,’ etc.) and tag them in pictures to get more visibility on both Instagram and Facebook. Facebook Catalogs also allow creating Ad Sets or Collections (for Shops) from your catalog to promote and feature selected products. For large scale sellers, Facebook deploys a feature where they can assign permissions for partner businesses to work with their catalog.
To create a catalog on Facebook, you can simply go to Catalog Manager.
How can you add items to your catalog?
Facebook offers three ways: (1) manually (using a form), (2) using a data feed (spreadsheet file) in CSV, TSV or XML to upload multiple items at once, or (3) Facebook Pixel (to upload products from your website automatically).
If your inventory is large or updated often, the last two methods work better for you. There’s also a 4th way to add products, a Catalog Batch API, an advanced method for developers, which is an excellent choice for large businesses with 100,000+ items.
What could be interesting for direct-to-consumer enterprises having a large variety of product SKUs is that Facebook Shops is partnering with several eCommerce platforms. Any changes made on your WooCommerce / Shopify / ChannelAdvisor / etc. website are auto-synced with your Facebook Shop, which inevitably reduces time-to-market for those having accounts with any of such eCommerce providers.
“We’re also working more closely with partners like Shopify, BigCommerce, WooCommerce, ChannelAdvisor, Cedcommerce, Cafe24, Tienda Nube, and Feedonomics to give small businesses the support they need. These organizations offer powerful tools to help entrepreneurs start and run their businesses and move online. Now they’ll help small businesses build and grow their Facebook Shops and use our other commerce tools.” – Facebook
Eventually, the Facebook Shops catalog would also be available directly via the Messenger and WhatsApp. Facebook also wants to enable shopping from live streams, wherein brands would be able to tag products directly from Facebook catalogs for direct-to-consumer retailing. They would appear at the bottom of Facebook live videos.
Customers could go through the full store collection, save products, and place orders. There would also be a possibility to save payment credentials for the next purchase (that could usable across Facebook-owned apps).
Image source: Facebook
- Tempting Calls-to-Action (CTAs)
CTA buttons help guide people to shop, make a purchase, arrange a call, send a message, or perform other actions important for your company. Such calls-to-action work with Facebook Shops: for sharing as posts, page-level shop displays, and product catalogs. For each campaign objective (like brand awareness, reach, traffic, or engagement), you can choose the appropriate CTA (Get Quote, Download, Order Now, Send Message, Send WhatsApp Message, Shop Now, etc.). These enable direct communication with your audience.
If customers respond to a CTA, they are interested and have found what they needed. The brand’s ability to keep the conversation going in the right direction can lead to an eventual purchase. And the possibility of closing the sale on the same screen without any redirects or having the users leave their Facebook account increases the chances. It is better known as conversational commerce, which is about meeting people where they are, and guiding them through any of their hesitations about a product, etc. Facebook Messenger comes into the picture here. The tendency to shop via chats is and will be growing, and Facebook is well aware of that.
- Dynamic Collection Ads and Promotions
Facebook Shop also gives direct-to-consumer brands an ability to run targeted promotions, and use Messenger based integrations to start conversations with customers looking interested in the promoted items.
Direct to consumer brands or retailers can use their Facebook Shop catalogs for product promotions through different ads (Dynamic ads, Collection ads, Carousel, and Collaborative ads. See details at Facebook Business Help Center).
When running Facebook Shop ads, you can choose the ad type and get Facebook’s design and technical requirements recommendations here.
This year, Facebook and Instagram Ads are heading more towards the ‘Dynamic’ interface. It’s getting more popular as the process is more automated, and this type of ads lower the CPC (cost-per-conversion) for brands.
Dynamic ads automatically show relevant items from your catalog to people who are interested in them. They look like any other type of ad (carousel, single image, collections, etc.).
How do Dynamic Facebook Ads work?
Dynamic ads match your products with the information from a Facebook pixel (or SDK, a code from your website or app). You can also retarget people who have taken any kind of action, in the past, with your brand online. The perks of Dynamic ads are that instead of creating an advertisement for every item, you create an ad template that automatically uses images and details from your catalog for products you’d like to advertise. It is a relief for brands having to promote large numbers of product items.
The Facebook Shops system will further accelerate the growth and popularity of Facebook ads, as businesses will have a more definite reason to invest more in social media promotions. It, in turn, will provide Facebook with more of the shopping data and allow the platform to use it to better target ads.
- Social commerce integration
Facebook Shop hits the right chord with today’s social commerce trends. It is the most recognized social media platform creating a fully-stocked eCommerce space, giving any kind of direct-to-consumer seller the ability to sell products through its platform.
Yet, it is a social platform before being a commerce platform.
And this dramatically benefits direct-to-consumer businesses – consumers chatting and commenting under a product or social post, sharing stuff on their accounts, building word-of-mouth for your brand — all for free. Social commerce speeds up sales as shoppers can do everything in one place (like getting clarifications about the product details, asking for delivery terms, giving reviews, etc.). The more retailers a social network would have, the more attractive it would be for others to join. That’s the network effect, which Facebook understands.
Conclusion
Facebook Shops offer an easy-to-go option for direct-to-consumer enterprise retail brands. It provides several features for personalized shopping and effective cataloging for any volume of stock-keeping units (SKUs). Stores are simple to set up, easy to manage, and the loading speed is much better than to mobile versions of the websites. Plus, Facebook’s global extensive audience with precise targeting is at the brands’ disposal, whether through ads or just organic search. Facebook Shops is about the experience that feels native to each of us, especially with real-time conversations that help retain customers with personalized service. And that is the Big Blue’s trick for effective sales.
“There is always room at the top.”, says American orator and politician Daniel Webster.
Why not give Facebook Shops a shot and try to capture a premium shelf in one of the most promising eCommerce stores soon?
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Author bio: Alexandra Gladchenko is the Content Marketing Manager at Gepard.