Top 10 Questions About Facebook & Instagram Shops Answered

Insights / 2020.06.24

Top 10 Questions About Facebook & Instagram Shops Answered

 

Introducing the next big thing in e-commerce: Facebook and Instagram Shops.

Last month during a Facebook Live session, Mark Zuckerberg introduced a new e-commerce feature that allows businesses to bring their stores to the two hugest social media platforms and put their products in front of the billions of eyes that scroll them each day. The best part for businesses and consumers? In-app purchases are now enabled.

The recent rollout takes the groundwork of Facebook Marketplace and Instagram ad shopping a step further, enabling businesses to create a full-fledged e-commerce storefront within the social media channel itself.

 

So why the shift?

The Coronavirus pandemic has turned both Facebook and Instagram into a go-to hub of information on local restaurants and stores for consumers. In fact, Facebook saw a surge of more than 1.73 billion daily active users in March, and across its family of apps, monthly active users hit 3 billion for the first time in history. 

Consumers already get information from social media, including information on changed store hours, online delivery, curbside pickup, and other important updates. Now, they’ll also be able to make purchases without ever leaving the apps. 

Although any brand or business can create a Shop, the rollout is rooted in Facebook’s mission to help small businesses survive the economic fallout that has already impacted many. As nonessential brick-and-mortar stores were forced to close as a result of the virus, Shops provide small businesses with a digital remedy to reach their customer base right where they are — online.

We had a few questions about Shops, and we figured you would too, so here’s a high-level FAQ on Shops — at least, according to us.



Q: How do Instagram and Facebook Shops differ from Amazon Storefronts?

A: Amazon appeals and caters to shoppers with a specific product or brand in mind, whereas Shops encourage discovery. Inspired by good ole’ days at the mall, Shops provide a similar experiential take to online shopping, allowing consumers to leisurely browse and discover products.

Another main point of difference is Shops’ ability to cater to small businesses as a result of the pandemic’s implications. E-commerce giants like Amazon, as well as established online retailers, are set to benefit while many smaller traditional retailers will struggle. That’s where Shops has jumped in—to act as a partner to struggling small businesses.



Q: How do consumers discover and use Shops?

A: Consumers can discover a Shop through a business’ Facebook business page or Instagram profile as well as through stories and ads. Just like a consumer would browse and purchase an item in a storefront location, consumers can place an order or save items businesses make available on Shops.



Q: What is Checkout and what are the benefits?

A: Checkout, an invitation-only test program, allows consumers to complete purchases without leaving the app. Once a business connects a catalog of products, they can offer Checkout. Here are some reasons why Checkout is valuable:

  • Once a consumer enters their payment and shipping information, Facebook and Instagram remember it, so there is no need to re-enter it each time they want to make a purchase. Also, no need to create a new account: they can use their existing one to complete a purchase.

  • Facebook securely stores this payment information. With protected payment information all in one place, consumers won’t need to login to a different website to complete their purchase.

  • Facebook’s policies ensure high-quality inventory by reviewing every product for sale, ensuring product images and descriptions are accurate, and limiting products that violate policies.

Only businesses participating in Checkout will be able to conduct transactions on the app. Otherwise, consumers will have to go to the brand’s website to complete their purchase.



Q: Are consumers able to link loyalty programs, rewards, or discounts to their Facebook and Instagram accounts?

A: Yes. Facebook is making it possible for consumers to earn rewards from businesses they frequently shop by connecting loyalty programs to their Facebook account. Businesses can either connect their Shop to an existing loyalty program or create one from scratch to allow users to earn and redeem rewards. Facebook is also testing ways to help small businesses create, manage, and surface loyalty programs on Shops.



Q: Are Shops free to use?

A: Anyone can browse and use the Shops for free, and businesses can set up their Shop for free with the option to buy ads. Since Facebook’s business model operates on ads, it plans to make money from Shops that bid for ads as well. 

Facebook will also charge a selling fee for sales completed through Checkout. The selling fee is 5% per shipment or a flat fee of $0.40 for shipments of $8.00 or less. 



Q: What customization capabilities are available to brands with Shops?

A: Shops are highly customizable. Businesses can choose products to feature and can customize the look and feel of their Shop with a cover photo and accent colors that help showcase their brand. Facebook’s augmented reality tech and AI capabilities also provide a customized experience as Shop visitors can use AR to virtually try on clothes, test makeup, and preview furniture. 

To help brands seamlessly manage products in their Shops, Facebook has partnered with Shopify, BigCommerce, Woo, Channel Advisor, CedCommerce, Cafe24, Tienda Nube, and Feedonomics. 

According to Shopify, “Facebook Shops allow Shopify merchants to get control over customization and merchandising for their storefronts inside Facebook and Instagram while managing their products, inventory, order, and fulfillment directly from within Shopify.” 

Businesses are also able to manage their Shops and related social ads through third-party platforms.

 

Q: How will Shops integrate with a brand's existing e-commerce or customer service systems?

A: In Shops, shoppers can use WhatsApp, Facebook Messenger, or Instagram Direct to connect with brands with questions and concerns and to check package tracking and past purchases. 

Many brands are already using Facebook Messenger to communicate with consumers through business pages. And with 42% of consumers spending more time online shopping, brands have the opportunity to connect with consumers on new platforms in new, innovative ways. Digital marketers should be prepared to help target and connect with consumers where they’re at as their needs and preferences evolve. 

The relationship between a partner like Shopify and Shops is headless commerce, meaning product information is stored in a way that’s agnostic to its presentation. In a move toward a new sort of e-commerce technology stack, the same e-commerce backend could supply product descriptions, pricing, photos, and videos to an e-commerce website, a mobile app, or a Facebook Shop. This type of headless commerce will make e-commerce ubiquitous.

 

Q: Do you need a certain follower count or credentials as a brand to have a Shop?

A: Any business or seller, no matter their size or budget, can create and utilize Shops, although this feature is best suited for retail and e-commerce advertisers. Businesses that sell apparel, accessories, home furnishings, and other tangible goods can get a lot of value from a Facebook or Instagram Page Shop.

In order to have a Shop, your business must:

  1. Sell physical items.

  2. Agree with Facebook’s Merchant Terms.

  3. Link to a valid US bank number.

  4. Have a tax identification number (TIN).

     

Q: What’s the benefit of using Shops over directing people to your own website or Amazon?

A: The introduction of Shops isn’t an effort to replicate a brand’s or Amazon’s end-to-end experience. Instead, Shops integrates with existing online shop services like Shopify to take care of payments and analytics all in one place. 

While Shops does signal Facebook and Instagram’s bid for dominance in markets beyond just social networking, the native social sharing elements of these two platforms are what will set its e-commerce experience apart. Indeed, a point of difference with Shops is the ability to integrate social sharing to make shopping on the apps a social experience to reach more consumers through word of mouth. Although consumers can certainly partake in a level of social sharing on a brand’s own website or Amazon, it requires an added step, taking away from the experience.

From a customer experience perspective, Shops also removes additional clicks and touchpoints in the online purchasing process. This provides consumers with a seamless shopping experience from within the social media channel where they discovered the brand or product, rather than interrupting their browsing to visit a different website. It also simplifies the checkout process with an easy one-click buy.

 

Q: What does the future of Shops look like?

A: Instagram Shops, which will allow consumers to browse and shop products directly from Instagram Explore, will soon exist as a permanent navigation bar button. Once this feature is live, consumers will be able to browse selections from their favorite brands and creators, filter by categories, and purchase things they love all in one place.

In addition, Facebook plans to launch a new Live Shopping feature across Facebook and Instagram that would allow people to shop on Live in real-time. Businesses will be able to tag products from their Shop or catalog before going live, and they will be shown at the bottom of the video so people can easily tap to learn more or order. 

This initiative comes with the knowledge that more than 800 million people engage in live videos daily across the two apps, many of which are product tutorials and launches, so there’s already a strong e-commerce culture associated with live video.

 

Facebook and Instagram Shops have already begun rolling out and should be more widely available within the coming months. With a large engaged user base in place, these two apps are bound to provide endless opportunities for businesses looking to increase their digital presence.


Have more questions? To learn more about how we can support your e-commerce strategy, send an email to info@tandemtheory.com.