Are Facebook Shops Just Amazon All Dressed Up?
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Jun 12, 2020
TL;DR: Facebook Shops open as a simple avenue for online retailers to find and communicate with customers. Since the shopping experience is housed in Facebook, however, it presents some tough considerations for online retailers who are concerned about the cannibalization of their own brand experience.
Facebook recently extended its tech tentacles into ecommerce and unveiled Facebook Shops. On one end, Facebook hopes this new idea helps keep small businesses alive through the coronavirus pandemic. But on the other end, this new feature opens up yet another revenue stream for the tech behemoth while bolstering Facebook’s reputation among SMB advertisers.
Solid move for FB, but is it a good move for you and your brand?
What are Facebook Shops exactly?
According to Zuckerberg, the basic idea behind Facebook Shops is that it empowers small businesses to build an online store and sell things directly across Facebook’s family of apps, including Facebook (duh) and Instagram.
Business owners can create a dedicated “shop” section on their Facebook Page or Instagram profile where they can build out a catalog of products and services that visitors can browse, save, share, and even purchase.
Facebook Shops are built primarily for small businesses because they are free, easy to set up, and plug right into Facebook’s ridiculously enormous user base.
Facebook is partnering with Shopify, BigCommerce, WooCommerce, ChannelAdvisor, CedCommerce, Cafe24, Tienda Nube, and Feedonomics to help brands bring their products into Facebook Shops.
Now that we’ve covered the nitty-gritty, let’s get into the good stuff. 👇
What are the benefits of Facebook Shops?
This is the first time a major social media platform has really dived into the world of ecommerce, and there are some real advantages to setting up a Facebook Shop. You can essentially bank on three key benefits:
- You get access to Facebook’s user base
- It is easier to find, target, and sell to a specific audience
- It is easier to communicate with customers
Before we get into the specific benefits of Facebook Shops, let’s address the $663B gorilla in the room. Facebook’s biggest benefit is the size of its user base.
Facebook boasts 1.73 billion daily active users that spend about 58 minutes on average on the platform every single day. That’s a lot of consumer eyeballs that could cruise through your goods.
OK, moving on.
Audience targeting and data
One distinct advantage Facebook holds is the ability to gather and use user data for targeting.
For better or for worse, Facebook holds much more data about a customer than simply their name, phone number, email, and address.
It keeps way more deets than any rep could capture and hope to enter as usable data. Simply put, finding customers and using their profiles to target prospects is about as easy and powerful as can be.
Pinpointing your most popular products, or identifying products with an active barrier to purchase, is easier with the data Facebook provides. You can upload as many products as you’d like and can easily categorize them in your Facebook Shop. When Facebook Checkout is enabled for a Facebook Shop, the customer never even has to leave the Facebook app to check out, though retailers can easily connect with their own online store for checkout as well.
Targeting your audience and pointing them to your Facebook Shop plays nicely into Facebook’s endgame. SMBs make up the majority of Facebook’s ad revenue and if Facebook Shops take off, advertisers will likely spend more on Facebook overall.
Communicating with your shoppers
Since Facebook owns the majority of Western communication tools between Instagram, Facebook Messenger, and WhatsApp, communicating with customers potentially just got a whole lot easier.
Instead of managing emails, chats, and reviews, all communication with customers can flow directly through Facebook itself. Customers can chat in with questions on whichever platform they prefer. This makes for a pretty streamlined customer experience, which is a definite bonus for businesses.
You can use these communications platforms to keep your customers up-to-date with shipping information, give promos and company updates, and more. In contrast to traditional emails, Facebook Messenger chats, on average, yield 80% open rates and 20% click-through rates.
If you want to learn more about the features within Facebook Shops, you can check out the official page here.
Ease of use vs. customer experience
Facebook Shops take out some of the issues that shop owners often struggle with like effectively targeting prospects and easily adding and organizing products. It also opens up one of the simplest lines of communication with customers. But these benefits come at a cost.
As we’re sure you’ve guessed by now (or like you already know if you read the TL;DR), Facebook Shops are housed within… Facebook. Typical.
Your Shop looks like a Facebook page, acts like a Facebook page, and, in essence, IS a Facebook page. The shopping experience happens in Facebook, is finished in Facebook, and is controlled by Facebook. Sound familiar? (*cough cough* Amazon)
“By 2020, customer experience will overtake price and product as the key brand differentiator.”
In a world of seemingly endless shopping options, differentiating yourself from the competition could quite literally mean the success or failure of your business.
According to a recent Walker study, by 2020 (like, now), customer experience will reign supreme. Providing a memorable and UNIQUE customer experience is one of the most important strategies you can employ to win customer loyalty, repeat purchases, and business growth.
Much like Amazon, Facebook will remove much of that unique experience.
While maybe not as drastic as the uniformity of Amazon listings, Facebook Shops suffer from a lack of customizability. Yes, you get your FB page and some custom images, but say goodbye to the powerful ecommerce tools, plugins, and customer flows you have designed on your site.
Perhaps the most dangerous potential outcome of Facebook Shops is the possibility of an Amazon-style private label.
As many retailers found out the hard way, no product is safe. After retailers listed their products on Amazon, many found knock-off, price-undercutting private label products promoted over their own. In the end, there’s nothing stopping Facebook from trying to capitalize on its own marketplace. And without a superior customer experience to differentiate you, there will be no reason for consumers to pick your product vs. a cheaper private label one.
At Route, we understand the importance of customer experience. You’re not just trying to sell products, you’re trying to create loyal customers. Mega-marketplaces like Facebook Shops or Amazon strip away the ability to create dedicated customers and reduce the importance of your brand.
What should I do?
If you’re a retailer without an ecommerce presence, set up a traditional ecommerce store first. Whether that’s with Shopify, Magento, or any other ecommerce platform, having a traditional presence is the first step in building a LEGITIMATE online retail presence.
If you already have an online presence, use Facebook Shops as a supplemental tool.
Don’t plan on migrating your entire shop onto Facebook or Instagram. If you do decide to set up a Facebook Shop, make sure you connect your ecommerce platform for payment. If customers check out using one of Facebook’s ecommerce partners (full list of partners here), shop owners will not pay a single fee for having a Facebook Shop. If customers use Facebook Checkout, Facebook will slap a 5% fee onto every purchase.
Like we mentioned, Facebook doesn’t allow for a truly unique customer experience. Get a Facebook Shop for increased exposure and attention, but don’t quit your day job on your normal ecommerce site. In the end, you can use the targeting and communication advantages of a Facebook Shop, but you will likely receive much more traffic to your primary site.