Meta Changes Instagram, Facebook Shops to Encourage In-App Transactions
As rival TikTok ramps up its shopping initiatives, Meta is streamlining its own commerce strategy to drive more in-platform shopping on Instagram and Facebook. A shift toward a new dynamic for Instagram and Facebook Shops will require companies to enable in-app checkout in order to offer a Shop on both sites. Previously, companies could create Shops that linked out to their own website.
The change will first be tested in the U.S., with other markets to potentially follow depending on the results. Beginning on June 5, 2023, onboarding of any new Shops in the U.S. via both Meta’s Commerce Manager and Shopify will only be allowed if checkout on Facebook and Instagram is enabled. On August 10, 2023, this restriction will be extended to newly onboarded shops from all other platform partners. Companies with existing Shops that do not currently enable in-platform checkout will continue to be supported for the next year, but that will end on April 24, 2024. During that time Meta said it will focus on helping those merchants add checkout to their Shops.
Outside of the U.S. the story is a bit different: in 21 markets where Meta sees a “future opportunity to introduce checkout,” Shops without checkout — i.e. those that link out to an external merchant website — will continue to be supported for the time being. Those markets include Australia, Brazil, Canada, Denmark, France, Germany, India, Indonesia, Italy, Japan, Mexico, Netherlands, Norway, South Korea, Spain, Sweden, Switzerland, Taiwan, Thailand, UK and Ukraine. In all other markets, Shops that do not enable checkout will no longer be allowed. Businesses that choose not to enable checkout, foregoing the option to have a Meta Shop, can still connect with customers via other ad products, Reels and business messaging.
“With these changes, we can learn what works best for people and businesses in the U.S. before expanding this suite of tools to more countries,” according to a Meta blog post announcing the news.
Expanding and Upgrading Tools for Advertisers
Meta also unveiled other shopping-based initiatives that it will pursue in the coming year, with the goal of “ensuring our ads tools are as performant as possible through AI-powered automation and new products and tools to help deliver the right ad to the right people at the right time.” These include:
- Expanding the availability of Shops ads, which allow businesses to send potential customers directly to their Meta Shop or their own website, to thousands of new U.S. businesses;
- Moving the Shops ads product into the Advantage portfolio so all ad automation tools on Meta can be found in one place;
- Making it easier for U.S. businesses to set up a Shop with in-app checkout; and
- Testing new Shops tools like ratings and reviews, buyer email opt-in and dynamic product pages to give businesses more ways to connect with customers and promote their products.
“For years, people have used our apps to serendipitously discover new products and brands that they love,” reads a post in Meta’s Business Help Center explaining the changes. “To help bring people and businesses together, we’ve introduced free and paid tools like personalized ads, Reels and messaging. We’ve also learned more about what businesses need most and are continuing to evolve our offerings to better support them, especially as we navigate a tougher economy and shifting customer needs.”
This evolution has also included sunsetting live shopping functionality on both Facebook and Instagram in the last six months. As competition from TikTok ramps up (that platform introduced its own Shop feature in the U.S. in November 2022), Meta is clearly focused on honing its social commerce strategy to maintain its lead in the space. This includes doing away with functionality that wasn’t performing, like live shopping, and ramping up tools that are, like Shops and in-platform checkout.
As both the tech and advertising industries continue to grapple with headwinds, CEO Mark Zuckerberg has dubbed 2023 the “year of efficiency” at Meta. These efforts, which have included restructuring and mass layoffs, appear to be bearing fruit: Meta’s latest earnings saw the company beat revenue expectations and report a YoY increase in revenue for the first time in three quarters. Meta is likely also being aided by the uncertainty surrounding TikTok’s future in the U.S. as calls for a ban of that app intensify. Meta’s revenues were up 3% YoY in Q1 2023 to $28.6 billion, and daily active users also increased 4% YoY.