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Platforms rely on the active participation of different kinds of users, each of which must benefit from its participation. With this basic premise in mind, Facebook appears to be seeking to ensure that its platform appeals to all sides of the sales exchanges and interactions that take place on it.

In particular, for small businesses that maintain pages and also advertise on Facebook, it needs to ensure steady streams of potential customers, which these businesses, with their limited resources, can access inexpensively and appropriately. For customers, Facebook wants to make sure they see advertisements and postings by sellers that interest them, then give them an easy, safe way to make purchases. And of course, Facebook itself needs to earn sufficient revenues from these business operations to earn revenue and support its continued operations.

The Facebook Shops feature promises to meet all these needs. Through Shops, small businesses can establish a dedicated digital storefront, without having to invest in developing a separate site. In addition to ordering capabilities, Shops will allow these businesses to link their profiles on various Facebook-owned social media, including Instagram, WhatsApp, and Messenger. Through these links, they can interact with potential buyers, answering questions and offering advice.

For users, the introduction of Shops makes it extremely easy to purchase items of interest. Some sellers still encourage visitors to click through to their sites, but the Facebook Checkout program also promises that users might just click on something they like and complete the purchase, even as they continue scroll through their feeds on Facebook or Instagram. A promised development for the future would enable them to link their existing loyalty program memberships with select retailers to their social media accounts too.

Finally, for Facebook, Shops is another way to keep users on its site, as well as keep its small business customers happy. Small businesses account for a substantial percentage of the 8 million advertisers that appear on Facebook’s various social media sites, so it needs to find ways to support them, especially in these trying times, when their traditional sources of income (e.g., in-person purchases by local customers) are less available.

Discussion Questions:

  1. How does the Shops feature promise to help small businesses and customers?
  2. For which member of the platform—buyers, sellers, or Facebook itself—are the benefits of Shops most significant?
  3. What other options does Facebook have to keep its platform appealing for both small business sellers and buyers?

Source: Robert Williams, “Facebook Debuts Shops e-Commerce Initiative to Support Small Businesses,” Marketing Dive, May 20, 2020