With consumers limiting their social contact and physical bricks-and-mortar stores directed to close, online shopping is seeing a positive impact. Although we are now entering one of the worst recessions in history, there are consumers that are not as impacted and still want to spend. This budget is being directed online.
Amazon alone seem to be a huge winner in this sense with US$11,000 per second being spent on its products and services.
The latest move from Facebook takes advantage of the upturn in online shopping. Mark Zuckerberg hosted a Facebook Live stream on May 19 to announce the launch of Facebook Shops. In his address, Zuckerberg said Facebook recognised many businesses around the world facing challenges due to COVID-19 have developed Shops to help those affected by the economic downturn during the coronavirus lockdown.
The rollout of Facebook Shops shows the company’s investment in features that inspire people to shop and make buying and selling online easier. Lots of businesses have not adapted to the online world, and Facebook has always offered a simple platform for businesses to build their online presence and connect with customers. Shops deliver for businesses by providing new ways for people to discover businesses and shop.
The move is great for small businesses in particular, but it is accessible for everyone to take advantage of the offering. Facebook will charge a small fee to monetise the proposition, but the true value will be in advertising opportunities for brands. The platform will require more valuable data from both consumers and businesses to deliver the Shops proposition, including purchase behaviour data, which is invaluable for advertiser brands. In turn, this is likely to improve signals in the algorithm, building out lookalike audiences as deeper shopping behaviours and platforms occur on the platform.
Amazon and Facebook have become increasingly competitive rivals, with their walled garden approaches delivering their edge versus wider advertising. Brands will need to take advantage of this and be aware of the value of the data (credit card details, shipping addresses, etc.) more than ever before. This is especially true given the impact of Cambridge Analytica.
Overall, it’s clear the “new normal” impact from coronavirus will be long-term and some behaviours learned during the lockdown will stick. Advertiser brands have already adapted quickly, and publisher and media owner businesses have also adapted swiftly.
Privacy and data control measures are more important than ever, and brands need to ensure they have the right procedures in place in order to take full advantage of the new developments in the market.
Banner image courtesy of Michał Parzuchowski from Unsplash.