POV: Shopify Integrates with Facebook and Instagram

Background:

Shopify is integrating its payment system ‘Shop Pay’ with Instagram and Facebook, the first time that Shop Pay will be available outside of the Shopify experience.

Details and Implications:

Shop Pay is an accelerated checkout solution, similar to PayPal, that allows customers to save their email address, credit card and shipping and billing information in the app so that they can complete their transactions faster. In 2020 Shop Pay facilitated 137 million orders. It claims to be 70% faster, the most secure and to have a conversion rate 1.72x higher than a conventional point of sale (POS) checkout. The system also has a popular carbon offsetting feature and offers order tracking and management.

When available, the integration will mean that consumers will be able to find tagged products from Shopify merchants on Instagram and add them to the in-app cart. Then when they checkout they can choose from Shop Pay, credit card, debit card and PayPal. If they choose Shop Pay they will receive a confirmation code to their phone and will be able to complete the order without leaving the app. Orders will be able to be tracked via Shopify’s Shop app and consumers can see the carbon emissions offset from their purchases.

This integration is the first time that Shop Pay will be available outside of the Shopify experience and it will first be available on Instagram in the US, before expanding to Facebook, also in the US. It is likely that if successful, the integration will roll out to other markets.

Shop Pay joins other payment integrations currently available on Instagram and Facebook, with PayPal already an option. However, this new integration could still be a major advancement for Facebook’s ecommerce push. Whilst Facebook is still looking to roll out its own payment system called Facebook Pay, having processes customers are already familiar with in the app will encourage them to complete purchases, helping to turn the social network into more of a commerce orientated experience – which is vital as we see the sales funnel collapsing and the combining of media and sales into single platforms.

This integration is not the first time Shopify has linked with social media platforms. Last year, it partnered with TikTok to allow merchants to create, run and optimise TikTok marketing campaigns directly from their Shopify dashboards. It has also been reported this week that TikTok is looking at a livestreamed shopping experience, product catalogues and some form of affiliate marketing for creators to share product links, to further expand its ecommerce capabilities.

Summary:

As the worlds of media and ecommerce collide many major social media platforms are looking to increase and invest in their ecommerce capabilities. This integration between Shopify and Facebook is a clear example of this trend. For Facebook, this will help expand its frictionless payment offerings and is one of the many ecommerce updates it has made in the past year. The general ecommerce push on social media platforms as they look to evolve into shopping destinations will continue.

Further Reading:

TechCrunch | Shopify | Social Media Today | Financial Times (TikTok)