In the current stay-at-home environment, it’s all about e-Commerce. While the shift from brick-and-mortar retail to online shopping had already been underway for quite some time, COVID-19’s romp around the globe certainly accelerated it. To this end, companies everywhere are making a significant effort to keep up with the trend.
FB). Back in May, the company launched its Shops product on a limited basis, offering it to only select businesses. Writing for Stifel, 5-star analyst John Egbert notes “this offering provides SMBs with the ability to build a unified transactional storefront across Facebook Pages and Instagram business profiles with direct customer service integrations through Messenger, Instagram Direct, and WhatsApp.”” data-reactid=”13″ type=”text”>This includes the likes of social media titan Facebook (FB). Back in May, the company launched its Shops product on a limited basis, offering it to only select businesses. Writing for Stifel, 5-star analyst John Egbert notes “this offering provides SMBs with the ability to build a unified transactional storefront across Facebook Pages and Instagram business profiles with direct customer service integrations through Messenger, Instagram Direct, and WhatsApp.”
On August 25, everything changed. The company revealed that Shops will now be available to all eligible businesses globally. Therefore, most of the roughly 160 million small businesses that maintain a business page on FB’s platform can now conduct transactions with consumers online.
What are the eligibility requirements? Businesses must comply with Facebook’s policies and commercial terms, show that they are trustworthy (by proving they have real followers and they represent their own business) and be located in a supported market.
Expounding on this development, Egbert commented, “The global rollout of Facebook’s merchant-driven Shops platform, which keeps businesses front-and-center rather than focusing on products / prices like most other eCommerce platforms (including largely product-driven experiences on Amazon / Google Shopping), should help SMBs at a critical time as local businesses cope with the economic challenges of COVID-19.”
On top of this expansion, FB is giving its clients more control over their virtual Shops, with the new functionality including revamped design layouts for featuring single products or groups of products, a real-time preview of collections as they are designed, new tools to gauge results in Commerce Manager as well as automatic shop creation capabilities for new sellers.
“Facebook is also adding Messaging to its Shops, building in the capability for businesses to chat with customers through Messenger, Instagram Direct, or WhatsApp (tests for the latter coming soon),” Egbert added.
As for Instagram, the company is also expanding the Checkout feature, so U.S. businesses will have access to it. According to Egbert, this will allow more Instagram users to complete transactions without leaving the app. Understanding the economic challenges spurred by COVID-19, FB will eliminate selling fees for the Checkout feature, which could “accelerate the adoption of these tools,” in the analyst’s opinion.
Summing it all up, Egbert stated, “Over the long-term, Facebook’s opportunity in eCommerce should come more from increased adoption of digital ads by SMBs than transaction fees, and the accelerated rollout of Shops suggests the benefits to growth could be evident as early as 2021.”
click here)” data-reactid=”25″ type=”text”>As a result, Egbert kept a Buy rating on Facebook shares. However, his $290 price target suggests a 1% downside. This is most likely a result of the recent quick surge (FB soared 15% in August) and the analyst’s inability to turnaround a new price target so quickly. (To watch Egbert’s track record, click here)
See FB stock-price forecast on TipRanks)” data-reactid=”26″ type=”text”>There’s not much dissent to Egbert’s thesis amongst his colleagues. FB’s Strong Buy consensus rating is backed by 29 Buys, 4 Holds, and 1 lone Sell. The average price target comes in at $291.71 and implies shares will remain range bound for now. (See FB stock-price forecast on TipRanks)
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