How Small Businesses can Benefit from Facebook Shops

Maia Clinch Maia Clinch, Product Specialist

Facebook CEO Mark Zuckerberg recently announced a new feature to encourage small businesses to promote themselves on Facebook and Instagram. Facebook Shops will be designed to give businesses, especially brick and mortar retail stores, restaurants and local service providers, the ability to compete with larger retailers such as Amazon and Walmart. In particular, Zuckerberg hopes that Facebook Shops will help small businesses recover from the “economic shock” of the COVID19 crisis.

What are Facebook Shops?
Facebook Shops are online storefronts that can be customized to the needs of businesses. They can also be integrated with either a Facebook or Instagram profile to provide additional reach. The most significant feature of these virtual storefronts is that customers can buy products directly without leaving the apps. With a typical Facebook ad or most types of online advertising, the customer has to click on a link to reach the business’s website. Whereas Facebook Shops are designed to provide a seamless online shopping experience.

Facebook has, in the past, attempted to make social media shopping easier. Back in 2014, they introduced “Buy” buttons that businesses could display. However, the feature never became popular. For one thing, many users reported that these buttons often didn’t work properly. Now, Facebook is partnering with e-commerce companies such as Shopify to create more user-friendly and functional ways for businesses to sell directly from social media.

Online Shopping is Crucial For Small Businesses Right Now
Online shopping, led by Amazon, has grown immensely in the last few years. Due to the COVID19 lockdown in most of the world, small businesses are facing extreme pressure to adapt to a harsh new reality. Many restaurants, spas, gyms and many others have been forced to close their doors to the public. Some, meanwhile, have remained opened but drastically altered their business model, such as restaurants offering only takeout meals.

Large retailers such as Walmart have actually benefited from the crisis. Not only have Walmart’s stores been open but they are also selling online. Amazon, of course, is another company that has enjoyed increased sales during the lockdown period of late Winter to early Spring 2020. Smaller retailers, meanwhile, have suffered catastrophic losses with many closing their doors permanently.

When it comes to online advertising, larger companies also have a significant advantage over small businesses. With huge advertising budgets and name recognition, it is difficult for a small local business to compete. Facebook Stores potentially give smaller businesses a way to even the playing field.

Facebook’s Motive for Creating Shops
Although Zuckerberg says that Facebook Shops are designed to help small businesses during challenging times, his motives aren’t entirely altruistic. Online advertising, including Facebook Ads, has declined over the last few months as struggling businesses have cut back on their marketing.

Facebook Shops are a way to encourage businesses to remain active on social media. They provide a low-cost way for businesses to reach customers. There is no charge for setting up these shops, at least for now. The only cost is a 5 percent fee to accept payments via Facebook’s Checkout. If you use Facebook Shops you also have the option of providing other checkout options, though all of these involve some fee. It’s also likely that Facebook hopes businesses will increase their paid advertising to promote their Shops.

How to Get the Most Out of Facebook Shops
It’s too early to look at statistics such as how many sales businesses have made using Facebook Shops as the feature is still so new. Similarly, Facebook is likely to make tweaks and introduce new possibilities, such as providing filters, templates and other customizations. Still, it’s never too soon for businesses to strategize and identify some creative ways to leverage a new social media feature. The following are some possibilities.

  • Feature products. If you already sell products online, a Facebook Shop is a convenient place to feature a new item or one that’s on sale. You could test various products and find out which your audience responds to.
  • Get traffic to your online store. Almost any type of social media ad or post can link to your store without setting up a special shop. However, featuring an item in an appealing storefront layout may be an effective way to entice shoppers to click on your store.
  • Promote your Shop with Stories and Ads. You can call attention to your Facebook Shop using other Facebook functions such as Stories, live video, groups and paid ads. At the same time, it’s a good idea to remember that users tuning into Stories or visiting groups are seeking valuable or entertaining content and probably won’t appreciate too much hype and promotion. You could, however, mention your Shop at the end of a post or video.
  • Keep mobile customers in mind. The vast majority of Instagram users, as well as many Facebook users, access the sites via mobile devices. Keep mobile users in mind when you write copy and create images.
  • Use Facebook Shops along with Marketplace. Facebook Marketplace has been around for quite a while though it’s a feature that many users, including businesses, overlook. It’s a free way to list all kinds of products and services. Marketplace is especially good for selling single items or services as it’s set up like Craigslist with a choice of categories. Since both Facebook Shops and Marketplace are free to use, there is no reason not to use both. Keep in mind that you may need to direct traffic to Marketplace as many of your followers probably don’t go there.

Facebook Shops are still in the very early stages. Mark Zuckerberg only made the announcement on May 19, 2020, with the caveat that Shops not yet available globally and are being gradually rolled out over the coming months. There’s a good chance that you aren’t yet able to set up a Facebook Shop in your location. However, it’s not too early to begin planning how you might use this feature to sell products and increase your revenue.