E-Commerce

iProspect Reports From Facebook eCommerce Summit 2019

On June 11th Facebook held their inaugural eCommerce Summit in Menlo Park.  Facebook may not be the first platform you think of when discussing commerce, but with such a large audience, advances in Instagram’s shopping features, and the possibilities within the Messenger platform, there is a lot worth talking about.

 

The day started by framing the opportunity with a lot of big numbers.  For example, 80% of Instagram users follow a brand, 130M accounts have tapped on a Instagram Shopping Tag, and more than 1 in 3 people on FB in the US use Facebook Marketplace (in 2018 FB was estimated at 169.5M users by eMarketer https://content-na1.emarketer.com/the-social-series-who-s-using-facebook).  This shows the scale we all know exists with Facebook, and the rest of the day was spent discussing how to tap that audience from a commercial perspective (and some interesting new features we can’t discuss due to an NDA).

 

One of the focuses was on stories, which can be found not only in Instagram, but also in Facebook as well.  Facebook stressed stories throughout the day as a great opportunity with low CPM now, and encouraging results such as 62% of people surveyed saying they became more interested in a product after seeing it in stories.  This will become even more useful once Instagram Checkout becomes more widely available, enabling users to purchase said product without leaving the platform.  A guest speaker from Wayfair put it well when she said, “Traditional eCom is searchable, but next gen eCom needs to be browsable.”  This frames the difference between the type of commerce we’ll see on a platform such as Amazon—largely transactional and needs based—with what we’ll see continue to develop on platforms like Instagram and Pinterest—purchasing based off of inspiration.

 

There were also some less upbeat themes throughout the day emphasizing the importance of consumer experience.  “84% of US shoppers are fine abandoning a brand after a poor experience” was one of the stats along with some about bounce rates poorly optimized mobile sites and long load times.  This was used to spin checkout within the FB ecosystem as a good thing—and for conversion rates, shortening the journey to purchase will have a positive impact—but it is also important to balance that uptick in sales with the loss of consumer data which comes from operating your own platform.  Tailoring the experience to the user and providing personalized benefits isn’t something these platforms are able to do on the same level as an owned experience.

 

However, one of the more interesting topics of the day was Messenger.  We all know of platforms like WeChat which enable commerce through a massive messaging-infused interface, but no one in the west has been able to tap into similar success yet (due not only to consumer behavior, but also stricter laws and safeguards).  The biggest appeal of utilizing a messaging platform is the ability to have 1-on-1 experiences with consumers.  This opens up new levels of insight into our consumers and deeper levels of service. Think of traditional online experiences as catalogs—reliant upon the user and very manual—and message-based experiences as store clerks—interactive, adaptable to each user and conversation. When done right, this can have a much bigger impact than the experiences consumers are currently used to.

 

Facebook isn’t the only company betting on this new type of consumer interaction though.  Both Google and Amazon are very active in this space with their digital assistants, all of which allow 3rd-party chatbots as well.  Facebook has some very interesting interplay between platforms, however, which makes Messenger quite compelling.  A great example is 1-800 Flowers, who gave users an option on their support phone line to continue the conversation in Messenger.  Selecting this option would then start up a new chat in Messenger and allow users to continue via chat at their convenience.  There are also ad formats which when clicked will start a new chat between user and brand.  Messages between consumers and businesses have grown 10x since 2016 and currently sit at 20B messages per month.  Once these chats are open, they provide a fantastic remarketing channel with response rates much higher than traditional mediums like ads and emails.  

 

Facebook is not always thought of as a commerce platform, and it seems Facebook themselves are still figuring things out with one speaker saying it was the most important strategic focus for them and another stating they weren’t a commerce platform and didn’t plan to become one.  But what is certain is that the opportunity is real and ready for those willing to experiment ahead of the pack