There’s no denying that the onset of Covid-19 has accelerated digital adoption by at least 5 years. With the pandemic showing no signs of slowing down, the ecosystem of consumerism, be it luxury, retail or daily essentials is now being operated from one’s mobile phone. Facebook seized this opportunity to disrupt the e-commerce ecosystem in May earlier this year, by launching a personalised, seamless, free, digital shop for SMB’s and established brands alike, to connect with their customers virtually. Facebook Shops aims to realise the vision of ‘Social Commerce’ aka a mobile-first shopping experience platform where businesses can effortlessly create an online store on Facebook and Instagram, have control over their brand’s marketing, advertising and customer experience. ?With Facebook Shops, SMEs and brands can connect with shoppers in their virtual habitat, while exploring the revolutionary potential of personalised, content-based shopping experiences. ?Shops is one of Facebook’s many disruptive masterstrokes and it will be interesting to see how it performs against the heavy weights such as Amazon.

Follow the Breadcrumbs

According to a recent ?article in Forbes?, Internet usage has increased by 70% which has led businesses to sell online, now more than ever. ?User Statistics on Instagram show that 1 out of the 3 most viewed stories are from business accounts and more than 200 million Instagrammers visit at least 1 business profile daily. Facebook Marketplace reportedly has 800 million monthly users. These statistics prove that the experiment of social media transitioning from a platform for social connections to one for business discovery has yielded positive results and that consumers were willing to shop on Facebook apps.

A Full Purchase Funnel Consumer Experience Like No Other

Social Commerce is described as a social media platform making a more personalised and targeted in-app shopping experience for customers. While social media has always been considered as a top-of-funnel platform for discovery of products, ‘Shops’ offers the full funnel consumer experience, making avenues to touch upon each leg of the customer journey from discovery, consideration, purchase, retention and advocacy.

Discovery aka More Revenue from Facebook Ads

With it’s 1.7 billion active users, Facebook’s vast access to user data ranging from knowing your political views, to your grandma’s birthday, makes it a very tempting platform for SMB’s and established brands to spend on Facebook Ads to accelerate discovery of their products. Over and above offering support to sellers with a high search engine ranking, more authentic traffic, easy ROI tracking, flaunt-worthy business metrics and targeted ads. For homegrown brands, this can be a fresh opportunity to make a mark by leveraging social media to fulfil not only brand awareness objectives but sales and revenue too.

? Consideration with Content Commerce
When user’s discovered a brand through influencer marketing, celebrity collaborations, stickers and filters on any of Facebook’s platforms, they were directed usually to it’s website. In this model, the user lands directly on the brand’s Shop where brand’s have complete control over their brand look, feel, narrative with customisable fonts and colours and most importantly control on the catalogue they want to showcase. Brands can interact with customers still offering them a personalised experience in real time through all of Facebook’s platforms, WhatsApp, Messenger or Instagram Direct Messages to offer support and more.

? Purchase: ?Change the Field
In November 2019, Facebook launch?ed Facebook Pay, a convenient, secure and consistent payment experience across Facebook, Messenger, Instagram and WhatsApp?. ?Facebook Pay could potentially garner adoption in two ways: one where Facebook convinces e-tailers to enable Pay as a payment option or builds a platform that e-tailers would proactively want to use that is tightly integrated with their payment solution. It only makes sense for them to go with the latter. ?This is Facebook’s classic game that I’d like to call: “change the field” instead of “competing in the game”. They did the same thing with their ad business, when they didn’t want to enter the arena of keyword-based ads, dominated by Google, they simply created a new arena, one based entirely on interest-based advertising.

? Retention and Advocacy
With the information collected, Facebook will use this data to show consumers more “relevant content and ads”. For example, if you buy a shirt on Shops through Facebook Pay, you will start seeing ads for jeans and related accessories. Moreover the Shops ecosystem will also assist SMB’s with loyalty programs, live shopping experiences and a lot more to build the brand’s advocacy.

The Subtle art of Keeping the Sellers’ Happy

In comparison to all of the above, the user journey on Amazon, it is a product-first approach as opposed to Facebook’s seller first. It is a marketplace where you go to buy specific products. On the seller’s end, Amazon gives one access to millions of prospective consumers from where it aggregates data on consumer behavioural patterns. This data is then used in various ways and often against the very sellers that helped Amazon become the successful conglomerate, it is. This was made more blatant with the launch of AmazonBasics. Basics, offers nearly ? 1,58,000 private brand products that compete with the existing sellers on its own platform. Amazon has admitted to using ?‘aggregated data’ ?from third-party sellers on its platform to inform decisions about its private label brands. No wonder, these products are close ?lookalikes?, often sold at a lower cost with higher review ratings. Apart from this, Amazon ? selling plans range from $0.99 to $39, and then there are additional referral fees, fulfilment fees and other costs. For a long time, SMEs and brands have adhered to Amazon’s strategy of ‘if you cannot beat us, join us’ but the scalability of this model with a lucrative lower cost competier on it’s heels, is yet to be tested.

Facebook Shops, in comparison, has a seller first strategy. Brands will now create hassle-free storefronts, target relevant customers and have a level-playing field. Moreover a critical point to note is while setting up a Shop is free if the etailer enables ‘Checkout’ Facebook earns upto a 5% selling fees on each purchase (this selling fees has been waived off till December 30, additionally this fees is lower than Amazon’s). Yet, they are valid competitors because they will change the way users discover products through content to make purchases within their ecosystem. According to a recent ?Mckinsey Report?, consumer sentiment is empathetic towards sustainable and ethically sourced products. So brands that have an earnest story to tell, can use Facebook Shop to drive this point home with relevant video content, a strong influencer strategy and enjoy direct conversions. In this regard, Amazon is lagging.

Garnering Consumer Trust

Without any doubt, Amazon has fundamentally influenced and changed consumer shopping experience with its super-fast deliveries (including Prime), no-questions-asked returns, making it nearly impossible for any other e-commerce player to bite into their market share. Facebook will have to foster that trust with buyers who are purchasing from brands they have not purchased from before. Facebook is building technology for this trust factor. For example, Facebook collects user reviews of products sold through their Ads. If the feedback is not great, Facebook penalises the advertiser by raising the cost of advertising and restricting distribution/reach of the ad. Imagine this, in a way, advertisers are compelled to be very pro-consumer and responsive to feedback- which conveniently suits the consumers.

An Endeavour to be the Preferred Platform of Choice

Today, Gen Z shoppers ?account for 40% of global consumers ?and with ?84% of shoppers reviewing at least one social media site before purchasing. Shops has reduced the friction between discovery and checkout. With it’s seller first, content discovery approach, making it a lot more welcoming, Shops gives sellers an equal ?opportunity to tap into relevant users without the intimidation of being sharked up by a cut throat e-marketplace. Brands are empowered to execute entirely new kinds of revenue linked (performance) user and customer acquisition strategies which will take some time to play out and be evaluated. Till then I suggest we kickback and plunge into this shopping revolution.

By Siddharth Bhansali, Founder Noesis.Tech & CTO Zoo Media

About Author 

Siddharth Bhansali is the founder of Noesis.Tech, a leading technology products and solutions agency, founded in 2009. Some of their key clients include ShareKhan (by BNP Paribas), TrueNorth Ventures, Deloitte, Stylecracker, Aza and Le15. A passionate drummer and base guitarist, an avid reader about evolution and psychology, Siddharth brings with him a unique mix of capabilities which enables him to bridge the gap between business goals and technology interventions. In 2020, Noesis.Tech partnered with Zoo Media, the media network which owns 7 agencies including the flagship digital agency FoxyMoron, thereby massively scaling the business of this transformative technology consultancy.

About Zoo Media

Zoo Media is a homegrown media network of 7 agency brands. It includes the flagship digital agency FoxyMoron?; creative technology agency ?Phosphene;? ‘The Content Burrow’ and video first agency ?The Rabbit Hole;? the influencer, creators and talent management vertical ?Pollen;? new age digital media publishing company ?Mammoth Media;? ?recently acquired core technology services & products agency Noesis.Tech? and the consulting arm D?oyenOink?.

About Noesis.Tech

Noesis.Tech, is a reputed technology products and services agency founded by Siddharth Bhansali in 2010. In 2020, the agency became a part of the Zoo Media Network (the network that owns FoxyMoron alongwith 6 other agencies). Noesis.Tech’s services range from developing e-commerce websites and apps; e-community platforms, e-learning programmes and providing e-publishing solutions. Over the past decade the agency has worked with reputed clients like Nykaa, Sharekhan, Manyavar, Principal Mutual Funds, Tata Q, Sandisk, NITCO, Aza, Le15, Dysco, SanDisk, Velvet Case, Deltin Group, Stylecracker, Xpandr and NCPA to name a few.