MGR eCommerce Edge Weekly | January 23, 2020
Top News This Week
How Facebook Plans to Compete with Shopify and Amazon
The next frontier for consumer brands is Social Commerce, and Facebook wants a piece. Facebook would love nothing more than to further increase their position as a “toll booth” for brands that want to operate in the digital economy.
Facebook’s plans:
Mark Zuckerberg wrote in a Facebook post recently about his vision for the future of social commerce and how Facebook will play a large part stating that in the future, “anyone can sell products through a storefront on Instagram, message and support their customers through Messenger, or send money home to another country instantly and at low cost through WhatsApp.”
There’s a lot to unravel in that sentence alone, I encourage anyone operating in the eCommerce space to read the whole post. Zuckerberg understands that right now they are one of the largest (if not the largest) driver of customer acquisition for digitally native brands, and wants to capitalize on this even further by not just being the platform used to reach customers, but the platform where brands live.
Facebook claims their intent is not to take a commission on each sale (a la Amazon or Shopify). If that ends up being true, then how do they plan on growing their revenues by building this? By making ads that allow customers to purchase within their ecosystem much more effective than those that send users to a 3rd party site.
This is how Facebook will use all of the data privacy criticism and increasing customer data legislation to their advantage. The US, foreign legislators, and Apple are all cracking down on cross site tracking, which would make Facebook’s ad platform in its current state much less valuable. Facebook knows there’s no fighting this and that restrictions will only get tighter, but it plays directly into their hands.
If ads going to 3rd party sites become ineffective then it only benefits Facebook. It will make Facebook’s eComm platform more enticing than any other, using it will be the only way that advertisers can keep all of tracking features they currently rely on.
This is how Facebook wins.
In the future as more details come out we’ll write about how you can win, but it’s important to understand Facebook’s strategy and motivations first.
Other Notable Links:
1. Understanding Amazon Attribution – MGR
2. Amazon is ramping up it’s counterfeit reporting with authorities – REUTERS
3. Many eCommerce businesses are expanding to retail, searching for growth opportunities – RETAIL DIVE
4. Google makes major improvements to Google Shopping for apparel and accessories – TECH CRUNCH
5. Big tech beef alert: Amazon CTO calls out Facebook exec live at a conference for violating user privacy – YOUTUBE
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