What You Should Know About the New Facebook Shops

Key Things to Know About Facebook Shops

• Users will be able to complete their transactions inside of any of the Facebook apps. Compare this to the present day, where Facebook users click a link to a product, wait for a third party website to load, and complete the checkout process outside of Facebook. Transactions will be practically frictionless inside of Facebook Shops.
• As a result of this, it's likely that conversion rates from Facebook ads will increase significantly.
• Payment and shipping information will be stored inside of Facebook, so users won't have to enter it each time they want to make a purchase.
• Instagram (owned by Facebook) is adding a "shop" tab to its main navigation at the bottom of the app. This will be a central hub for E-Commerce going forward and a key distribution channel for most E-Commerce brands.
• Users will have a shared shopping cart across Facebook, Instagram, WhatsApp, and Messenger. The potential for "Abandoned Shopping Cart" sequences between these platforms can not be understated.
• Stores will be able to have reward points on their stores, which customers can redeem for discounts.
• Facebook shops will have augmented reality features that will allow shoppers to virtually try on clothes, place furniture in living spaces, and more.
• Facebook shops will have native integrations with the most popular E-Commerce platforms, including Shopify, WooCommerce, and Big Commerce.

Note: The Facebook Shops announcement is less than 24 hours old, I will be updating this article as I learn more.

This morning (May 19) Facebook released a new feature on their Facebook and Instagram platforms that they're calling Facebook Shops.

This is the biggest step we've taken yet to enable commerce across our family of apps.

- Mark Zuckerberg

Basic Background Knowledge about Facebook

Before you read this article, you should know that:

• Facebook owns Instagram, Messenger, and WhatsApp (among others, but these are the relevant ones to this article)
• Facebook's core business model is to sell advertising space on each of those four platforms.

Watch The CEOs of Facebook & Shopify Introduce Facebook Shops

Instagram Shop: The New Major E-Commerce Sales Channel

This part of the Facebook Shops update is going to be massively significant. This is how Facebook will re-position itself as a direct competitor with Amazon, transforming itself into one of the next major E-Commerce sales channels.

According to Mark Zuckerberg, the "activity" button in the main Instagram menu is going to be replaced with a new "shop" page.

Users will also be able to access Instagram Shop by swiping up on stories, as seen in the screenshot below.

This isn't just a new way for customers to buy your products - this is a new way for Instagram's 500 Million+ Daily Users to stumble upon your brand for the first time. A year from today, Instagram Shop Optimization (or whatever we end up calling it) will be one of the key elements of your marketing strategy (in select industries), right alongside Search Engine Optimization and Influencer Marketing.

Cross-Platform Shopping Carts: The Future of Marketing Automation

Customers will be able to add an item to their shopping cart on Facebook Shops, add a few more on Instagram, and then checkout in Messenger, without any loss of contents while switching apps.

At first glance, this feels gimmicky. Upon further thought, it's absolutely brilliant.

Picture this:

• You're browsing Instagram Shop, you add a few items to your cart, but you get distracted by your phone notifications and forget to complete the transaction.
• You receive an automated message in WhatsApp, allowing you to easily pick up where you left off and complete your transaction inside of WhatsApp.

This is more than just a simple feature to make checkout slightly easier. This is the future marketing automation. There are thousands of potential use cases here (imagine sending your best customers discount codes when their purchasing behavior starts to drop off, for example), and I predict that more will become apparent as we learn more about this feature's limitations. These features will be the Klayvio, Marketo, Mailchimp, and Drip of the Facebook ecosystem.

The Effect on Conversion Rates

In the video above, Zuckerberg announces that Facebook Shops will increase conversion rates when advertising on their platform. From the limited information that we have now, this claim checks out. I see the increased conversion rates coming from four sources.

Shared Payment Information Between Stores

Once a user purchases from Facebook Store A, their payment information will be stored and can be used in Facebook Stores B, C, and D. This will lead to reduced friction at checkout, which is a core principle of conversion rate optimization.

Completely Eliminate Load Times on Product Pages

Currently, if an E-Commerce business wants to sell a product on Facebook, they have to share a link to their website. This means that after tapping on the link, a user must wait for the merchant's website to load prior to making a transaction. As all online retailers know, load time is a conversion rate killer.

By keeping the transaction within its platforms, Facebook Shops will be able to pre-load the next page in the checkout process to provide a more seamless customer experience.

Increasing Sales from Existing Customers

Reward Systems

Not much information is available on this yet, but it looks like businesses will be able to customize their own reward systems within their Facebook stores.

Story Swipe-Ups

Upon the release of Facebook Shops, customers that already follow you on Instagram will be able to view the products featured in your Instagram stories and purchase on the spot.

Live Shopping

Facebook Shops merchants will now be able to promote products during live streams.

I see a lot of implications for cosmetic brands with this feature. These brands frequently use makeup tutorials in their content marketing strategies, and they'll be able to hold these tutorials live and sell the products that they're using while streaming.

Enhancing Online Shopping with Augmented Reality

One of the biggest barriers to online purchases is the customer's inability to visualize the object that they're purchasing. You don't know how your new clothes are going to fit you, how your furniture is going to fit in your room, or (as in Facebook's example this morning) how a shade of lipstick will look on you.

Facebook aims to solve this problem by using Augmented reality to allow the customer to picture how the product will look in its real-life context. Your phone's cameras will read the environment around you, and Facebook's "AI" will render a picture of your product in that environment.

Integrations with E-Commerce Platforms

Facebook Shops will integrate natively with the following platforms:

- Big Cartel

- BigCommerce

- ChannelAdvisor

- CommerceHub

- Demandware (Salesforce Commerce Cloud)

- Feedonomics

- IBM

- Magento

- Oracle Commerce Cloud

- Quipt

- Salsify

- SAP

- SellerCloud

- ShipStation

- Shopify

- Volusion

- WooCommerce

- Zentail