Are Facebook and Shopify on the way to becoming a better Amazon?
The partnership for onsite shops between Facebook and Shopify is not even one year old, but the progress that has been made is quite impressive. Facebook, with all its apps, is already the point of attention for many people. If one includes Facebook, Instagram, Messenger or Whatsapp, it is hard to find someone who is not using at least one of those apps. They are the "places'' where we as consumers spend our time. Successful companies are aware of that and meet us exactly at our point of attention.
Combining the Facebook universe, as the point of attention, with the capabilities of Shopify, as the point of sale, creates an unprecedented opportunity: Discovery, interaction and purchase, they are literally creating the "one stop shop". Not just for products people are already aware of, but especially for products people love to discover!
Looking at the current capabilities Shopify shop owners have within the Facebook universe is already quite impressing. Nearly the whole shopping experience of a webshop can be replicated.
Two major steps are still missing though. The first is the actual check-out within the Facebook universe (unless you are living in the US where Instagram Checkout is already being implemented). As of today you still need to leave the platform and purchase the product within the webshop. This however is about to change, as both companies announced that "Shop pay" will be available to merchants on Facebook & Instagram: "Making Shop Pay available outside of Shopify for the first time means even more shoppers can use the fastest and best checkout on the Internet." Users no longer need to leave the platform to purchase the product. The whole process happens on Facebook/Instagram.
The second step is creating visibility for the shop & its products as every shop is just as good as the amount of people visiting it. At the moment advertisers can use an array of formats dedicated to driving traffic/conversions on a webshop page /app outside the universe. However looking at the current metric structure it is already possible to distinguish between conversions happening on a website, app as well as on-facebook, leaving an open door for the potentially soon to come capability to drive paid visibility for shops/product on Facebook or Instagram. It took both parties not even a year to come this far and it won't take them that much longer to launch advertising capabilities as most of the technical infrastructure is already in place.
So implementing those two missing features will be game changing as advertisers, especially SMBs, will be asking themselves: Do I need to pay the fees on Amazon or is it more lucrative to focus on Social?
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As all events these days, the Facebook Marketing Summit 2020 was in full grip of the Covid-19 pandemic. Turned fully digital, we were in the convenient situation of leaning back in our remote office chairs and listening to the (marketing wise) most important topics to Facebook. Those were quite diverse, however we want to focus on one particular issue in this blog post: "discovery commerce". Under this term Facebook is fusing multiple topics which are happening within our behaviour as consumers as well as the commerce space.
The shift towards online shopping is happening for quite some time now and the global pandemic has simply accelerated this shift. For advertisers this is a significant disruption as it changes the consumer journey as we know it: “Instead of consumers finding their preferred products, their products are finding them.” While e-commerce comes directly in mind when thinking about online shopping, it is already established and limited on searching and purchasing through a website. Customers will mainly encounter products they already know and are actively seeking out. However, it needs way more to create demand in this new reality. That's where "discovery commerce" shines. It lets "products find people so they can discover (and potentially buy) things they are most likely to love".
To help a company’s products find the right people, Facebook is supplying a set of tools within its “discovery engine”. Those are clustered in four pillars:
“Nobody knows your customers better than you.”. In other words: If you know who your customers are (CRM, Tracking etc.) or what characteristics they have (interest, behaviour etc), Facebook is offering ways to utilize this data to target specific audiences most relevant to you.
Sophisticated Advertising Tools
“...with some help from machine learning…”. With its algorithmic power Facebook is able to utilize the various signals advertisers are getting back to constantly improve optimization and hence becomes better at “turning desire into demand”.
Engaging Shopping Experiences
“...with your own digital storefront, people can be easily moved from discovery to purchase…”. Facebook and its family of apps is already the digital place where people are engaging with your brand and products. Enabling them to nearly frictionless take the next step, offers great potential.
Secure Data Handling
As data security is being watched more carefully from various stakeholders, Facebook is highlighting the system being rooted in privacy.
Why do we find this so interesting:
First of all, it appears that someone at Facebook is closely following our blog: Having a top view, Facebook is offering its own perspective on the importance of social commerce. They are simply dressing the topic within a facebooky wording.
To be honest we believe this is quite a smart choice:
With Facebook running ads (even on competitor networks) about discovery commerce, we know they are really serious about the topic. The considerable push we can expect for social commerce in general will be great for everyone! We are excited to see what they are able to accomplish!
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Sources: 1.) https://www.facebook.com/business/c/discovery-commerce 2.) Turn on discovery commerce - Driving demand through shopping serendipity
We are living in strange times. Technology is changing our lives at unprecedented rates and is offering opportunities we could only dream about 30 years ago. Maybe this extreme pace is one of the reasons why we like to dwell in memories of the past. One particular decade many of us like to think back to and that is influencing our lives again is the 90s. Especially the younger generations like not only to dress like the 90s but to shop like they are in the 90s. Do you remember the hay-day of QVC and HSE 24? Live TV-Shopping is back! At least somewhat and with a significant technological spin on it. Of course we are not watching TV anymore, we are watching livestreams on social media!
China is the trailblazer once again and for two years now, Chinese companies, influencers and everyone else who has something to offer is using livestreams to advertise their own products. Even the Chinese government has voiced its support, calling the industry the "new engine" of e-commerce growth.
With China leading the way, the US are of course the next in line following this footsteps. With "NTWRK" a new player is entering the livestream market: "Our goal is to become a massive marketplace". NTWRK is combining the power of engaging content and the influencers creating it, with desirable and exclusive products. Those products are limited in number and availability time frame, increasing their desirability and leading to high velocity in transactions.
Those opportunities did not go unnoticed by the big players in the social commerce market. Amazon has a streaming platform, which hosts daily live shows on fitness, makeup, cooking etc. The hosts are talking about certain topics and matching products are shown directly below the video. Easy to access, easy to purchase.
With its "Shops" feature Facebook is going down a similar route. They are making it easier to shop for products in real time. Sellers, brands and creators will be able to tag products from their Facebook Shop or catalog before going live and those products will be shown at the bottom of the video so people can easily tap to learn more and purchase.
As live-streaming becomes more popular it will be only a matter of time until more platforms will be offering similar product integrations into their streaming possibilities.
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Social commerce is quite a popular term, with a lot of varying angles and perspectives. Loosely defined it is the digital selling of products utilizing social media like features (e.g. for product discovery and experience). This plurality of perspectives culminates in as many approaches to social commerce. The underlying premise is what they all have in common: Leverage our changing behaviour patterns for improved and immersive commerce solutions.
On the forefront are the big social media platforms (like Facebook or Snapchat), which are already great at letting users discover and experience products. With features like dynamic product ads or in app checkouts they are constantly improving their own on-platform and off-platform commerce offering. Then we have players like Verishop. They are building a marketplace, but to improve the experience they are adding features like feeds and are hence adopting a more social media like look and feel.
Shopify, one of the leading providers of e-commerce software, is actively encouraging its customers to experiment with social commerce, as this is a great way to connect with and sell to customers. Walmart, another major retail player, is taking this approach to the next level. They are not just thinking about how they can utilize social media platforms, but are exploring a potential purchase of TikTok US. Effectively becoming a major social commerce player themselves. They even renewed their interest after their initial bid, which was jointly with Microsoft, was rejected by TikTok’s parent company ByteDance.
Those are just some examples of the many approaches to social commerce. We compiled some articles below, in case you want to dive deeper.
Facebook is making it easier to shop and sell within its apps
Facebook just took the next step to becoming more of a digital mall. After Instagram Shops, Facebook is now announcing the expansion to Facebook Shops. The Shop is aimed to be a new place to discover businesses and shop for products in the Facebook/Instagram app. Businesses can easily set up their own store and showcase their products. While Facebook is getting the Shops starter kit, Instagram will go into the next phase. With Checkout it will enable users to make a purchase in just a few taps. All of this happens without actually leaving the app.
Snapchat’s ‘dynamic ads’ product for e-commerce retailers rolls out worldwide
With it's latest ad product launch, Dynamic Ads, Snapchat is also delving deeper into social commerce. This ad product allows advertisers to automatically create ads in real time using the brands own product catalog. As known from other platforms, advertisers don’t have to spend time manually creating their advertisement to fit Snapchat’s vertical format, but instead, sync their product catalog with the social platform and allow Snap to build their ads in real time. Early results of this new format have been very promising, with advertisers seeing significant ROAS increases.
Verifshop adopts a social network strategy from China
Looking at digital commerce and an effective omni-channel approach, social media platforms are a natural next step. Instagram, Pinterest or Snapchat are constantly working on ways to improve the shopping experience for its users. Verishop however is entering the social commerce sphere the other way around. It is an e-commerce site that specifically offers social elements like a personalized feed to let it's user have a social shopping experience. This approach is not new and has led to great success for dominating Chinese e-commerce players like Alibaba.
How social commerce is enabling retailers to be part of their customers’ life
Social commerce is the perfect opportunity for retailers of all stripes to dive in, experiment with social shopping, and emerge ahead of the curve. The ability to showcase the brand and products exactly where people spend much of their time to discover things they are interested in, is combined with fast and easy purchasing flows making social commerce a great place to combine product discovery and sales.
What a Walmart-Microsoft bid for TikTok could mean for e-commerce
The potential (forced) sale or technology partnership of TikTok’s US operations to or with a local partner has dominated the tech headlines for the past weeks. One of the more interesting suitors is Walmart. While this sounds strange initially, there are solid business reasons behind it. The retail landscape has shifted dramatically and Walmart's move is just the latest in a string of maneuvers in which retailers try to adjust their ways of selling products in the digital world. On top of the direct path to the customer, transaction data is the other big asset of owning a social media platform. While it currently needs to be shared with Facebook or Google, a world where Walmart is able to effectively reach and serve its customers through an omni-channel approach as well as provide a viable platform for its third party brands to advertise on, opens a whole new set of opportunities.
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