Facebook Targets E-Commerce with Updated Instagram Shop

Facebook debuted a major redesign of its Instagram Shop platform, which had already been accessible from a button in the Explore tab but now offers more functionality. The new version of Instagram Shop will first be available in the U.S., with a global rollout “in the coming weeks” said the company. In Shop, consumers will find special collections, a “Suggested for You” section and curated offerings from Instagram’s @Shop account. A double arrow symbol means the user can buy the product without leaving the app. The move is seen as Facebook’s stronger push into e-commerce.

Engadget reports that Facebook has “promised to add a shortcut to the navigation bar later this year … so you can get to Instagram Shop in just one tap.” Facebook initially introduced the Facebook Shops platform in May to enable “any business to set up a free storefront on their Facebook page and Instagram profile.”

Behind the scenes, Facebook teamed up with Shopify, BigCommerce, Woo and other “reputable third-party services” so that consumers who discover a Shops product can “save it for later or place an order immediately.” Checkout, “products that can be bought without leaving the app … will soon support Facebook Pay,” which “works across Facebook, Messenger, Instagram, and WhatsApp.”

Facebook Pay, “initially meant for fundraisers, in-game purchases, person-to-person payments and select purchases from Facebook Marketplace … supports PayPal and most debit and credit cards.” Facebook Pay currently is not connected to the company’s Calibra wallet or Libra cryptocurrency. The company said it is valuable on Instagram because it offers “an extra layer of security with the ability to add a unique PIN or device biometrics, such as Touch or Face ID,” and buy “purchase protection on select products.”

The Verge reports Facebook chief executive Mark Zuckerberg stated that, “expanded e-commerce would be important to begin rebuilding the economy while the pandemic continues.” “We’re seeing a lot of small businesses that never had online businesses get online for the first time,” he said.

A Facebook and Small Business Roundtable survey revealed that one-third of small businesses have stopped operating, with “an additional 11 percent say[ing] they could fail within the next three months if the current situation continues.” Online sales for small businesses are thriving however, with revenue doubling at Etsy from three years ago.

Facebook, which is home to 160+ million small businesses, also stands to prosper from Shops, which are free to create, via “advertising, payments, and other services.” For example, says The Verge, “businesses will be able to buy ads for their Shops, and when people use Facebook’s Checkout option, it charges them a fee.”

Consumers can also store “payment credentials in a single place that they can then use on any Facebook or Instagram storefront.” Customer support is provided via Messenger, Instagram and WhatsApp.

Facebook’s future plans include letting the consumer “browse store catalogs and make purchases directly from the chat window … [and] enabl[ing] shopping from live streams, allowing brands and creators to tag items from their Facebook catalogs so that they appear on the bottom of live videos.” The company is also developing loyalty programs that Shops can integrate.