Most observers of Facebook with an eCommerce background have been wondering when this social media giant would awake from its eCommerce slumber.
While marketers have been using Facebook to drive traffic to their site, this always involved going off the platform to finalize a purchase or see a collection of products.
This year Facebook improved the Marketplace section by adding an eBay Daily Deals shopping feed and an improved car buying section. Both of these initiatives appear to compete more with Craigslist and other “classifieds” style platforms.
Even Facebook’s smaller sibling Instagram was lagging behind in making eCommerce shopping easier. Finally this year Instagram opened up their API to allow shoppable ads from SaaS eCommerce platforms such as BigCommerce and Shopify.
Payments The Missing Link
However, the real missing piece of the puzzle is payment and order processing. The more steps it takes to go from an ad or a post about a product to purchasing it, the less the chance a shopper will follow through.
This type of “checkout friction” does hurt Facebook because if promoted posts or ads are not as useful as they could be, marketers will cap promotional spending.
And with over 2 billion users, some people use Facebook as their “internet.” At one time Facebook even tried to offer free mobile access to rural India to bring more users to its platform.
As an ecosystem, Facebook has the users and marketers already. But it is missing the checkout, order, and payment processing integration.
In the U.S., Facebook’s Messenger app added the option to process payments early and the company recently expanded it to include PayPal’s digital wallet.
From the outside looking in, it appears Facebook is readying a global payment system.
It may be trying different approaches in different markets before engaging in a more consistent worldwide strategy.
P2P payments could the logical start of a broader plan that involves its own payment services and a partnership with PayPal or other digital wallet services.
Leveraging New Technologies to Present a Different Product Catalog
There is no doubt that Snapchat has pushed Facebook’s development teams to bring more visually interesting technologies to its users.
Snapchat’s inability to find any traction beyond the teen demographic put it into a situation where it finally had to admit that it needed a rethink.
At the last disappointing quarterly earnings report for Snapchat, the company stated it would change its platform to appeal to an older (money spending) demographic.
But Facebook already has that demographic and pretty much copied or in some cases even provided better visual tools and services than Snapchat.
If Facebook can find a way to build new Augmented Reality shopping channels into the platform and bring native payments to this type of product feed, it will change eCommerce again.
We do have to remember, that Amazon just released an iOS A/R app upgrade and an Android upgrade is not far behind.
eBay has one of the best image search functions of all eCommerce sites operational right now. And others are playing around in the same sandbox, so there is a finite window here for Facebook to make a meaningful splash.
At F8, the company’s developer conference, they showcased some pretty cool visual technology.
If the company can use that technology and integrate it with a native payment and order system, it will be an immediate competitor to Amazon Marketplaces, Walmart Marketplaces, eBay, and others.
And just a few days ago, we reported on a closed beta for Messenger to bring live communications to eCommerce sites.
Facebook has many of the pieces of the puzzle, but can it or will it connect them? That seems to be the Million Dollar question, but it would be hard to believe if they don’t.
What is your thought on Facebook’s recent improvements that seem to indicate a greater eCommerce strategy? Drop us a line in the comments section below.