
Facebook Dives Deeper Into E-Commerce With New Shopping Features
NEW YORK (TheStreet) -- Facebook (FB) - Get Report has been dipping its toes in the e-commerce world for some time now, and today the company waded in even deeper.
Facebook added two new e-commerce features on Monday--a shopping section for users as well as a new shoppable advertisement.
The shopping section will feature products from a "small group" of retailers who are already a part of Facebook's Product Pages trial, Matt Idema, head of monetization product marketing at Facebook, told Re/Code. The section will be personalized for individual users.
The new ad unit will feature a retailer's product catalog within the ad, and when users click on it, they will be able to make a purchase without leaving Facebook. Target (TGT) - Get Report is one of the first retailers to take advantage of the new ad.
The two new releases follow a number of other commerce-related features Facebook has introduced in the past 15 months. The social media network introduced a buy button in July 2014, and has made it easier for businesses to sell products through Pages, integrating payment capabilities, communications support, and inventory listings.
The social network giant certainly isn't the only Internet company dipping its toes into the world of e-commerce -- Pinterest, Twitter (TWTR) - Get Report and Alphabet/Google (GOOG) - Get Report (GOOGL) - Get Report are just a few of the companies branching out with commerce features such as buy buttons. But Facebook's efforts seem to be a bit more widespread across the platform.
Nonetheless, it doesn't really seem like Facebook is really looking to replaceAmazon (AMZN) - Get Report as the next king of e-commerce.
"E-commerce is one of our top categories of advertisers, and we are already driving a lot of product sales through Facebook, but importantly, our e-commerce initiatives are really about connecting consumers with marketers so that they can buy from companies," Facebook COO Sheryl Sandberg said during the company's earnings call in July. "They're not buying through us. We are testing a buy button in the new shop section on pages, but again, that buy button is letting people buy directly from their advertisers, not from us."
At the end of the day, Facebook is simply trying to make its ads more attractive for advertisers.
"Their primary goal is to close the gap between an ad and a purchase," Needham & Company analyst Laura Martin told The Street in July. "They're trying to close the circuit. It's basically all about showing the advertiser the power of advertising on Facebook."
Martin added that as she sees it, e-commerce translates directly to taking a cut of a sale, and until Facebook decides to do that, it has not yet truly entered the e-commerce business on its own. For now, Facebook will benefit from its commerce efforts mainly through increased ad revenue.
In a sense, it's similar to Google's strategy, where Google does not take a cut from any sales that come from its buy button. Instead, the search giant hopes to add value to its search ads and boost business that way. Closing the purchase gap also enables Facebook to gather more useful data on its users so it can place ads more strategically in the future and better serve both its advertisers and users.
Facebook could eventually decide to take its e-commerce efforts in a different direction, but for now, at least, it's sticking to what it does best -- advertising.








