In response to the current coronavirus crisis with the worldwide closure of many physical shops, Facebook has started to integrate a shopping function into its main social network, as it has already been doing on Instagram. Mark Zuckerberg, founder and chief executive of Facebook, said in a livestreamed video on May 19 that he wants to help small and medium sized retailers to meet the 2.6 billion Facebook users around the world where they are, especially if they don’t have their own online store.
The new tool, called “Facebook Shops,” will allow retailers to easily create online shops that can be accessed via Facebook and Instagram.The stores will show up on the consumer’s tablet or smartphone on Facebook business pages, Instagram profiles and through targeted ads. The retailers will be able to set up free of charge “storefronts” on Facebook and Instagram, which will be working for this purpose with third-party services such Shopify, #BigCommerce and #WooCommerce.
The system supports live shopping via video livestreaming and give the option of using Augmented Reality (AR) functions to try out products such as sunglasses or cosmetics. It also allows connections with the different registered Facebook Businesses to send messages from Facebook Shops via WhatsApp, Messenger or Instagram Direct to retailers, asking questions, getting support, tracking deliveries and - in the future - paying right away within a chat if the bank details are stored on the Facebook account, so payment can be made via the app. The online network is also working on the integration of bonus point programs.
The idea of adding a shopping function to a social network as a mobile-first shopping experience has been around for some time, says Zuckerberg, but given the current retail lockdowns, the development of Facebook Shops has been “drastically accelerated.” It should have been probably implemented sooner, considering the fact that many retailers have been allowed to reopen their stores and that some of them have used instead internet marketplaces like that of Zalando to remain connected with customers.
The installation of Facebook Shops is intended to be free of charge for retailers. Fees are only due in principle for payment functions, which are already possible for certain other Facebook apps in the U.S. The primary objective is to cover costs, Zuckerberg continued. With the data, however, the online network could continue to improve its ability to bring advertisers to the right addressees for their ads. Zuckerberg sees the added value for Facebook in the fact that advertisements from the merchants will increase the online network’s revenues. “Our business model here is ads,” Zuckerberg said. “So rather than charge businesses for shops, we know that shops are valuable for businesses. They’re going to in general bid more for ads and we’ll eventually make money that way.”
Reportedly, Facebook Shops is already operational in the U.S. and Germany, and it will be more widely available in the coming months. We could not determine at the time of going to press whether it has started up anywhere else.