Meta announced in April plans to phase out shops on its platforms that don’t use the checkout feature, spurring people to make more in-app purchases and limiting the traffic Facebook and Instagram send directly to commerce sites. While convenient for people, the move will give the platform more visibility over attribution, historically hampered by Apple’s crackdown on user privacy.
Brands like Walmart and Rothy’s use Shops on Instagram and Facebook to send people to their commerce sites. Starting next April, they will be mandated to use the checkout feature on Meta instead, letting people directly purchase on Instagram or Facebook instead of redirecting them to an ecommerce website in the U.S.
Social commerce, or browsing and shopping directly on social media platforms, is rapidly gaining pace in the U.S., surpassing $30 billion in 2021, according to Insider Intelligence. That figure is expected to grow to nearly $80 billion by 2025, making 5% of total U.S. ecommerce. Meta’s move is expected, four ad buyers told Adweek, and while people may welcome it, there are questions about the data capturing and operational limitations potentially impacting traffic and sales.
“This really feels like a push from Meta to close the loop on measurement within their system,” said Brett Fischer, performance media manager, at marketing agency Collective Measures. “They lost a ton of visibility and attribution capabilities with iOS 14 update. And if they’re able to bring that transaction data in-house, that’s only going to benefit marketers. Now Facebook has that full 360-view of the consumer purchase process.”
To enable checkout on Meta Shops, brands need to have a product catalog and Shop set up within Meta platforms. This involves defining shipping and return methods, along with providing Meta with financial information for payouts and tax collection. Meta didn’t respond to comments by press time.
As of 2021, 73% of retail and e-commerce brands have set up Shop, according to Sprout Social. In the first quarter of 2021, Facebook Shops reported an average of 1 million monthly global users and around 250 million active stores globally, according to Statista. Meanwhile, more than 25 million businesses are active on Instagram, and 2 million of them utilize Instagram Shop features as of 2023, according to Gitnux.