Advertising issues associated with Apple iOS 14 privacy changes have made a lot of headlines as Facebook, Twitter and Snapchat have reported their earnings, but most of the companies remain focused on what they believe will drive future growth: shopping on their platforms.
Facebook CEO Mark Zuckerberg told analysts earlier this week that “building a full-fledged commerce platform is a multi-year journey,” but he said the company has made good progress, with Marketplace already at scale, Shops getting more developed and new features set to scale more broadly in 2022.
Zuckerberg also hinted at an “exciting program” planned for the holiday season, in which Facebook will work closely with a handful of businesses that use Shops to identify new ways of finding customers.
Related news: Facebook Pins Its 2022 Hopes on the Metaverse, New Ad Tech and eCommerce Tools
“The creative economy and commerce tools are still nascent, and there should be an opportunity for millions more people to make a living doing the work that they love,” Zuckerberg said.
In the coming weeks, Facebook plans to roll out several holiday shopping experiences across its apps, including exclusive offers in Shops when people check out on Facebook or Instagram as well as daily live shopping experiences with brands such as Walmart, Macy’s Benefit Cosmetics and Paintbox Nails.
Twitter, which is just starting to invest more heavily in commerce functionalities, recently launched new business profiles to allow retailers and other companies to differentiate themselves and list hours of operation and a website. The company intends to enable product purchases directly from business profiles soon, CEO Jack Dorsey told analysts.
“We do have a lot of small businesses on Twitter, but we have not served them well in terms of the products or the advertising capabilities,” he said, adding that commerce is an area where he wants to “start small and scale.”
“We want to make sure we are building a great product that people want to stick with,” Dorsey said. “Right now, the opportunity is a lot smaller, but that doesn’t limit us later on from much larger retailers and brands.”
He noted that there’s also ample opportunity to partner with companies that already have eCommerce solutions up and running to help streamline opening a shop on Twitter. “There’s a lot more to come, but all of these things will help them, the smallest businesses, be able to utilize us and scale up,” Dorsey added.
Slowing Growth
Facebook Chief Operating Officer Sheryl Sandberg noted, however, that eCommerce growth has begun to slow in the last several months as more consumers choose to shop in physical stores. “That doesn’t mean eCommerce has stopped growing,” she clarified. “Businesses are still making the shift online, but eCommerce is no longer growing at the pace it was at the height of the pandemic.”
Sandberg’s comments are similar to those made in July by Amazon executives after the company reported a rare miss of earnings expectations in the second quarter because of decelerating digital shopping. The eCommerce giant is set to report its third-quarter earnings on Thursday (Oct. 27).
See also: Amazon Sees Decelerating Sales as Post-Lockdown Life Resumes
Facebook’s efforts in commerce are focused on three areas: being the best place to advertise, making it easier to sell on Facebook and Instagram, and improving the customer experience, Sandberg said. On the last two items, she noted that Facebook has some work to do. “I think we’re also making progress, but we’ve got some room to grow,” she said.
Social commerce is expected to top $36 billion in the U.S. this year, according to eMarketer, though the trend is further ahead in other countries. In China, for example, digital purchases made through social media channels are expected to surpass $351 billion.
Readers also liked: Snapchat Says Social Commerce Reliant on Augmented Reality
We’re always on the lookout for opportunities to partner with innovators and disruptors.
Learn More