Facebook, Instagram enter e-commerce space with Shops feature

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Facebook's new Shops feature lets companies sell things from their pages.
Image: Facebook

Today’s consumers have plenty of options for where to shop online. They also hate switching between apps when doing so isn’t necessary. Thanks to a new feature being integrated into both Facebook and Instagram, users can now make purchases without ever leaving their favorite social media sites.

After slowly easing into the idea in recent years, Facebook is finally getting serious about the e-commerce space. On Tuesday, the company announced Shops, a feature that allows businesses to set up a free storefront on their pages. Thanks to integrations from third-party services like Shopify, BigCommerce, and Woo, these storefronts will be high-end online shopping destinations.

The Future of Business

The COVID-19 pandemic has taught everyone a lesson about the importance of the Internet. With no way to shop except for online, e-commerce is booming in a way unlike ever before. Companies like Amazon are thriving while brick-and-mortar businesses suffer without customers.

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It’s clear that things will change moving forward and that e-commerce is going to be more prevalent than it was in pre-coronavirus days. Moreover, it will be an important factor in restarting the economy.

Facebook CEO Mark Zuckerberg weighed in on this in a live stream, saying, “We’re seeing a lot of small businesses that never had online businesses get online for the first time.”

The social media giant’s new Shops feature comes at a perfect time for these small businesses. It gives them a way to smoothly transition into the often complicated world of e-commerce without the need for technical know-how or a standalone website.

A survey conducted by Facebook and the Small Business Roundtable found that 11 percent of small businesses could fail if the current situation continues for another three months. Shops will hopefully give them a way to stay afloat and possibly even thrive.

Getting a Cut

It shouldn’t be surprising that Facebook intends to get a boost from the new Shops. While businesses will be able to create storefronts for free, it opens the door for Facebook to make money in other ways. For instance, owners will be able to purchase ads for their Shops. Meanwhile, customers who complete a purchase using Facebook’s checkout option will pay a small transaction fee.

Zuckerberg notes that Shops will help improve the standard of web commerce. Facebook will store users’ payment credentials, which can then be used to check out on any Facebook or Instagram storefront. Right now, more than 160 million small businesses use at least one of the company’s apps.

While that might sound great, it does raise some security concerns. At this point, it’s practically a guarantee that Facebook user data is going to get stolen or leaked eventually. It will be interesting to see if users are willing to trust the social media company with their payment information. If the option is available, it may be smarter to avoid saving credit card details on the platform altogether.

Still, Shops is an interesting addition to the Facebook platform that should be beneficial for both individuals and small businesses. It has been in the cards for some time now and its arrival couldn’t be more timely.

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