Facebook's next big move

Ryan Goldsworthy
By Ryan Goldsworthy | 28 May 2020

Ryan Goldsworthy is group biddable director at MediaCom.

A New Entrant In The Race
With Mark Zuckerberg announcing Facebook’s newest eCommerce offering, Facebook Shops, there is an ecom arms race heating up. Shops has been touted as much-needed support for those forced to close bricks and mortar and move online due to COVID. Indeed, it may help the two in three Australian small businesses reporting revenue drops and who now need to sell their wares online but there is surely a bigger play for businesses of all sizes. It is this growth that will make the real impact.

This update shouldn’t come as a shock to those in the industry - the tech giant has been playing around with ecom capabilities for some time. Products like Instagram Checkout, Dynamic Ads, Feeds integration and shell versions of storefronts on WhatsApp and Messenger all point to a very big dip of the toe in the ecom waters from Zuck and the team. Facebook are coming for a bigger slice of the pie.

The new Shops flow connects the Facebook (FB) family of apps throughout the purchase journey – user scrolls, sees an ad, clicks, scans the Shop, adds to cart and finishes with a purchase.

This flow represents a great user experience but also an opportunity for FB to get their hands on end-to-end data. It’s the holy grail of media attribution, and FB want a hold on it all. Even if there isn’t a click, within the family of apps FB will still be able to master post-view conversions, a trick plaguing ad servers the world over.

So is it a frictionless experience or a frictionless data feed that Facebook want?

Use It or Lose It.
It’s reasonable to think that take up might be slow. Those who are most comfortable buying direct from brand sites, are also the ones leaving Facebook in droves. Business Insider indicates that while 73% of 18 to 24 year olds audiences have bought online in the last fortnight, they are also leaving Facebook at an average rate of 4% over the last five years.

Where this gets spicy is when we consider that social commerce has plenty of headroom across the broader demos - Facebook has hit peak user saturation in Australia, plateauing at 65% of internet users and yet, social commerce is used by only 27% of people.

If there is a company big enough to mould behaviour change in their favour through enough plentiful data, scale and purpose-built products, it’s Facebook.

Who can honestly say they love 100% of the websites they visit? Slow load times, information missing, clunky or ill-supported payment gateways… When Facebook do away with all of this, get better at telling users what they like and make the purchase seamless, users will flock in droves.

It’s almost impossible to see user behaviour not changing.

So, we move to a future-state where as a consumer this is the platform you must be on, and takes the the lion’s share of your time (we have seen it before with Chinese giants like WeChat). And just like the stalking lioness in the long grass, that’s when Facebook strike.

No Such Thing As A Free Lunch.
Facebook may be seeing this as a defensive strategy. Pinterest have made inroads in to frictionless social commerce, while Amazon are now in the ads game. Facebook doesn’t want to be left behind, and with a strong consumer product they won’t.

Why should you click over to Pinterest when you can do all your shopping in one? Why bother comparing prices at Amazon, when there’s a Shops Marketplace with them all side by side in your favourite blue app?

Larger businesses will follow suit and chase the consumer. We likely will see a prisoner’s dilemma – if Adidas, and Nike, and Reebok are all abstaining, users might maintain their current behaviour and visit the brand’s owned sites. All stays rosy in the land of fashion retailers… Until, after immense and sustained pressure from shareholders in a retail-depleted post-COVID world, one clothes brand CMO pulls the trigger and before you know it, we’re all on there.

Then comes the business model. For those readers who’ve been in the industry long enough to remember organic reach being anything greater than 1% of a page’s audience, you’ll remember the impact when Facebook moved to a pay-to-play scenario. Advertisers had spent years gathering a following, using Facebook’s free tools to attract new customers and then they had to pay to talk to their audience.

What happens when Facebook start charging businesses to use their end-to-end data to show their Shop, to appear higher in the search results, or to be seen at all?

The $M Question
It’s a sharp step from Zuckerberg. Social usage is skyrocketing in 2020, so too is ecommerce penetration. Perfect timing to launch. This step in the evolution is another straw on the retail camel’s back that, if brands don’t pick up their pace, will break clean in two. Brands won’t beat the duopoly with equal thinking, it needs to be better. If they want to keep a hold on their customer data, their user experience needs to keep up with the giants. The arms race needs big guns and it needs them fast.

Are you locked and loaded?

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