Some retailers say they are disappointed with Meta’s e-commerce rollout, noting that the service is missing basic components such as the ability to display products in a variety of colors and sizes if they were to use it directly via Facebook and Instagram. If not sold, limit where a merchant can ship the item and provide next day or same day delivery. Other stores, however, see promise in connecting with shoppers through the large user bases of Facebook and Instagram.
According to a former senior executive of the division, at least five senior officers have left in the last six months. Facebook has full confidence in its e-commerce business.
“Building a complete commerce platform is a multi-year journey – one that became a priority for the company less than two years ago,” said META spokesperson Joe Osborne. “We are proud of our progress and the teams we work to build out of these experiences.”
Meta began ramping up its efforts in e-commerce in the early days of the pandemic, launching features called Facebook and Instagram Shops in May 2020.
Brands from stores can post their catalogs directly on Facebook and Instagram. Some brands use stores to direct users to make purchases on their websites while others choose to sell items to users through Meta’s services.
Meta also began to prepare for the impact of the privacy changes it announced in June 2020 for its iPhone and iPad devices. Those changes, which began in April 2021, allowed users to opt out of their activity on their devices tracked by companies like Meta. Tracking data was crucial to how Meta measures the effectiveness of ads. The loss of that data took advertisers elsewhere, making a big dent in the company’s earnings for the past two quarters.
Since February, when Meta posted disappointing user growth and revenue and said Apple’s new policy would cost more than $10 billion in lost sales for 2022, the company’s shares have fallen more than 34%. Is. This equates to a loss of $307.8 billion in market value. According to first quarter results, about 97% of Meta’s revenue comes from advertising. Meta also said it will cost more because the company is for the Metaverse a virtual world where people work, play and interact.
Online shopping provides a way to mitigate the impact of Apple changes. By developing channels of commerce within its apps, Meta can measure the effectiveness of ads within its services and recover some of its lost data. Efficiency is key: Amazon.com Inc., which dominates e-commerce, reported $7.88 billion in ad sales in its most recent quarter, a 23% increase from the same period a year ago.
Meta doesn’t break out results from its shopping business, but CEO Mark Zuckerberg said last week that the company has recently seen a decrease in its use of e-commerce. Other online retailers like Amazon have also talked about the e-commerce slowdown as more COVID-19 restrictions are lifted and people have returned to personal shopping in recent months.
“Other challenges are broader macro trends, such as the slowdown in e-commerce that we saw during the pandemic,” Mr. Zuckerberg said.
Among Commerce’s most notable departures is Gene Alston, vice president of commerce business and operations, who recently announced in Meta’s workplace that he would be leaving the company, according to people familiar with the matter. Mr. Alston was responsible for all of the strategy and teams for the commerce products in Meta’s family of apps. According to a person familiar with the matter, Roy Tiger, vice president of engineering for commerce across the company, also announced a move to the workplace. Eddie Garcia, who previously served as chief product officer of Sam’s Club and was brought in last June to run the company’s Marketplace feature, left the company in March and most recently took over as chief product officer of eBay Inc. declared in.
Chris Olaniran is a user who wanted to create an Instagram shop for his clothing brand, Vital Clothing. That process required setup on both Facebook and Instagram, and in Mr. Olaniran’s case, Shopify Inc., a Canadian e-commerce company. But, which he uses to host his online store. “This is where I first realized, well, it’s a lot more complicated than I thought,” he said.
After making the necessary changes to both his Instagram and Facebook accounts, adding them to his product catalog in Shopify, and receiving approval to sell, Mr. Olaniran struggled to display all of his items in the shop. He said that he never thought how to show the change in his product catalogue. “You’d think there would be an accessible method of support, but after trying to resolve the issue myself, it became really clear that it’s actually the exact opposite,” he said. Meta said that businesses can find support in a number of ways and pointed to an online help center.
Mr. Olaniran eventually abandoned the idea of having an Instagram shop. “I have started the process of setting up an Etsy store in conjunction with my website,” he said. “It really comes down to, is it worth my time?”
Meta recently started showing Instagram users a promotion offering them 20% off when they place their first e-commerce order through the social network. More specifically, the company is set to expand the availability of ads within the Facebook and Instagram Shops feature, a format announced in June 2021, in which ads allow users to access curated collections from a shop or business’s website. send in.
According to a Meta employee, about 200 sellers are doing preliminary testing of Shops ads.
For many well-established retailers and brands, Facebook and Instagram Shops offer a fascinating glimpse into the future. Michael Carnicolas, co-founder and co-CEO of influencer-powered apparel brand Revolve Group, told investors last May that Instagram Shops is a “very small” contributor to the company’s bottom line. “We think long term. [Instagram shopping] It’s just a part of the overall suite of options we have for our customers.”
Kevin Gould, founder and CEO of Combo Ventures, a holding company with brands that sell products on Instagram, said he’d like to see Meta do a bigger awareness campaign, introducing Facebook and Instagram Shops to users. Better integration with Shopify, and adding features like discount code support will make the commerce offering more attractive, he said. Facebook says it added some discount features in late 2020.
Some merchants are seeing increased sales through Facebook and Instagram Shop.
Facebook and Instagram drive about 50% of revenue for the portable blender company, Blendjet Inc., CEO Ryan Pamplin said, but most of it comes from ads that drive consumers to Blendjet’s website. In recent months, the company has seen an increase in sales directly on its Facebook and Instagram shops, Mr. Pamplin said. Through April this year, Blendjet sales at Meta’s commerce facilities are up about 300% compared to the year-ago period, he said.
Mr. Pamplin attributes the boom to a number of shopping features that Meta has added recently, including product reviews and expanded product descriptions. Mr. Pamplin said some important features are still missing—notably the ability to add more than one photo for each color of a product or the ability to include videos for products—but he added that he needs to be included in Meta’s commerce teams. believe.
“I’ve been involved as an advertiser for a very long time, and I’ve embraced everything they’ve come up with,” said Mr. Pamplin. “And, you know, I’m loyal to the results.”