The world’s largest social network is barreling into e-commerce through an expanded relationship with e-commerce platform Shopify. It will allow Facebook users to buy products directly from Shopify merchants on their Facebook pages, the companies announced this week.
Stores with Shopify accounts can create a new Shop section on their Facebook pages, which can handle the transaction within Facebook or refer them to the store’s Web page outside Facebook, with the logistics handled by Shopify.
Click Image To Visit Shopify Page on Facebook
The mobile-compatible service is available to roughly 175,000 small businesses that have signed up with Shopify and presumably, the Facebook partnership will help recruit even more.
Facebook first revealed it was experimenting with Shops in Facebook pages, enabling brands to transact e-commerce directly from the Facebook platform, back in July.
The new Shop section builds on Facebook’s previous introduction of a “buy” button by giving products their own section on the vendor’s main page, adding product discovery for a more complete shopping experience.
Facebook is also testing a new mobile ad format that allows users to interact with several layers of advertiser content without leaving Facebook’s app; demo versions of the new ad showed users engaging with in-depth product profiles.
Of course, Facebook has plenty of competition in the e-commerce arena.
In July, Google began testing “buy” buttons in its mobile search results. After a limited test period beginning last September, Twitter is also rolling out its new “Buy” buttons more widely through a partnership with Shopify, as well as other e-commerce platforms. Finally, Pinterest has partnered with Shopify to create shoppable Pins.
While social-media companies have big ambitions in e-commerce, so far their share of the total business remains small, according to a study by Business Insider’s BI Intelligence. Citing data from Moovweb, BI Intelligence found that Facebook accounted for 1.32% of all referrals to mobile e-commerce sites, representing half of all traffic from social media sites and 64% of total revenue from social referrals.
By contrast, Pinterest generated just 0.16% of all referrals to mobile commerce sites, and Twitter contributed a paltry 0.04%. Pinterest accounted for an outsized share of revenue from social referrals, at 16%.
COMMENTARY: Shopify Inc. has also partnered with AMAZON to replace the ecommerce giant's Amazon Webstore software.
Shopify Inc shares soared after the Canadian software maker teamed up with online retailing giant Amazon.com Inc. to help merchants create their own online stores.
Click Image To Enlarge
The shares rose 23 percent to $35.55 at the close in New York on Thursday. The stock has about doubled since going public in May.
Amazon advised the users of its own Amazon Webstore software to move their online stores to Shopify, before it shuts down the Webstore service. Shopify merchants will be able to use Amazon’s payments system and warehouses, and the companies are working to let Shopify merchants list their products on Amazon.com, according to astatement. Terms of the deal weren’t disclosed.
For Shopify, the deal advances plans to let its more than 175,000 merchant customers sell goods on as many platforms as possible. The company already has similar arrangements with Pinterest Inc., Facebook Inc. and Twitter Inc.
Harley Finkelstein, chief platform officer for Ottawa-based Shopify, said in a phone interview.
“Shopify really wants to be the platform that allows merchants to sell wherever they have customers.”
Amazon started Webstore in 2006 to enable small-business owners to set up their own Internet stores. Since then, however, startups like Shopify and Austin-based Bigcommerce Inc. have come to dominate the market.
It sure appears that Shopify shares are rebounding considerably with the announcement that they are partnering with both Facebook and Amazon.
Courtesy of an article dated September 18, 2015 appearing in Social Media & Marketing Daily's The Social Graf and an article dated September 17, 2015 appearing in Bloomberg
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