1. Facebook shops were introduced in mid-May. What exactly are the shopping functions that Facebook offers to retailers?

Facebook Shops offers companies the opportunity to enter e-commerce via their Facebook page without having to set up and operate their own shop immediately. This is a great
advantage especially for smaller companies. For users, in turn, Facebook Shops offers the opportunity to get to know products and services directly on Facebook and add them to their shopping cart.

The introduction of Facebook shops also helps to improve customer communication: By linking Facebook with Instagram and WhatsApp, retailers can reach their customers across platforms, further enhancing the shopping experience.

Creating a Facebook shop is free of charge – and above all, it’s very easy. Companies can select the products they want to offer from their catalog and customize the appearance of their shop, for example by choosing a suitable cover image or color scheme.

2. Which typical online shopping functions are not yet available in Europe? What are the reasons for this?

To create a seamless shopping experience for the customer, Facebook strives to keep all interactions within the Facebook app. Currently, Facebook Shops is still in the beta phase, which is why, for example, the payment process can only be carried out within the app if the customer uses Facebook Pay – and this is currently only possible in the USA. Retailers participating in the beta test of Facebook Shops must redirect the buyer to their own e-commerce site for payment processing.

In addition, there are still no concrete advertising options to push a shop specifically over the platform. Retailers who use Facebook Shops must therefore rely on them to grow organically. This, in turn, should not be a problem if Facebook Shops deliver what it promises – and become a game changer for online commerce.

3. Do merchants have to meet certain requirements in order to sell through Facebook shops?

One of the main goals of Facebook is to give small and medium-sized companies in particular the opportunity to expand their digital presence with Facebook shops. Accordingly, there are no conditions for the use of Facebook shops, everyone can use the feature for free.

4. What are the benefits of using Facebook Shops for merchants? 

The last months have shown how mercilessly and at what pace the digital transformation is progressing. According to recent research, 51% of the world’s population uses Social Media with Facebook being the most popular platform. If you have the opportunity to build a digital distribution channel on a platform with 2.6 billion active users in just a few minutes and at no cost , this has the potential to be a massive competitive advantage. Facebook Shops now enables companies to reach a huge audience without having to invest in an e-commerce
solution.

In addition, consumers have little patience, especially in these times, accompanied by a decreasing fault tolerance in online commerce. Therefore, it is a clear advantage if every step of online shopping – from inspiration to product information to purchase – takes place on one platform and all communication takes place within the same ecosystem.

5. How does selling on Facebook differ from selling on marketplaces such as Amazon or Ebay? Is it worthwhile to only use Facebook shops?

The major online marketplaces offer various services and functionalities, which is also reflected in the conditions for merchants. Amazon has many advantages, but requires a number of investments, in terms of time and money, before the actual sale. Ebay is also a platform with many strengths, but still has some room for improvement in the presentation of
products, especially compared to Facebook.

Facebook shops could now be the alternative and for many retailers the gateway to e-commerce. While on Amazon and Ebay, price plays an important role for the user, Facebook offers an ideal environment for exploring content and product worlds, interacting with the providers and finally buying out of conviction.

The offer of Facebook shops is an ideal way to be present on a digital platform without much effort. For those who gain their first experiences here and successfully launch their online business, selling on Amazon could be a logical growth step. Ideally, the use of Facebook Shops will not only provide merchants with new income, but also a wealth of knowledge that will be helpful for trading on other platforms.

6. How is Facebook Shops financed? Are there commissions or listing fees as they are common in online marketplaces?

The sales charge is 5% per shipment or a flat fee of $0.40 for shipments worth $8 or less.

7. For which retailers (assortment, categories, company size, …) is selling via Facebook Shops recommended? For whom rather not?

Facebook Shops has what it takes to be a great sales channel for all types of businesses, regardless of their size or previous experience in digital business. The service is tailored for small and medium businesses, but will most likely be used by large companies as well.

Physical goods such as clothing, furniture or mobile phone accessories are traditionally easy to sell online, and this will also be true for Facebook businesses. Price points are not an issue: from our many years of experience we know that really everything can be sold on Facebook. Excluded are of course product categories such as weapons, medicines and all those that cannot be sold or advertised on Facebook.

8. What does a suitable customer approach or product communication look like on Facebook shop? How does it differ from other sales channels (marketplace, shops, advertisements)? And what should retailers avoid to do?

The unique advantage offered by Facebook shops is the ability to include all channels of Facebook Inc. in its strategizing and orchestrate accordingly. Users who are active on Facebook can also be addressed and guided to the shop via Instagram and WhatsApp. Communication via WhatsApp or Instagram Direct can also be a real weapon for customer retention.

Merchants who decide to use Facebook shops on a permanent basis should communicate this openly, especially in the initial phase – especially if the new tool is intended to replace the   actual online shop. As long as there are no special features, brands should use the classic advertising possibilities of Facebook to draw attention to their offer.

9. What practical tips can retailers successfully use Facebook Shops for themselves? What else do merchants need to consider?

• Put the product in a context. Make sure that the images you use in the product catalog are of high quality. The same applies to online shopping: the first impression counts. Especially if a user is not familiar with your brand, the look and feel of your shop and the imagery can be crucial for a potential customer to continue to interact with you.
• Don’t judge hastily, but give yourself time when starting with Facebook Shops. Get to know your audience, adjust your content iteratively and optimize your advertising spending in the long term. Whether you reach your KPIs, you can judge at the earliest – if at all – after three to four weeks.
• Even if Facebook’s shop solution is easy to use: Critically examine whether you have the necessary resources to use the tool as a revenue driver. Your product portfolio should always be up to date; real-time customer communication is critical to success in e-commerce. Every retailer should be sure that he can cover these and other areas of responsibility.
• Facebook Messenger, Instagram Direct or WhatsApp: Understand how your customers use the various Facebook services and what role they play in the everyday life of the respective consumer. Once you’ve deciphered this code, it’s an ideal starting point for building loyalty through consumer communications and boosting sales through recommendations.

Conclusion going forward with Facebook Shops as a potential sales channel: Due to many reasons is it too soon to provide best practice, as 2020 continues will both Facebook & Instagram Shops open up and we will all learn a lot more. Given then trends within consumer behavior where users require a smoother shopping experience and as communication must be super-relevant does the new shopping features within Facebook and Instagram fit well into the needs of users and consumers. We recommend all business to gain a good understanding of the potential implications that Shops can have on their business and take strategic decisions accordingly. This article can hopefully be one step in that direction.