Facebook: eCommerce is Great -- For Other People
In the last few weeks, Facebook did what it inevitably does every few years: give up on embedded checkout on its own website.
Facebook Shops and Instagram Shops die in June, like this month! RIP. Frankly, they were always terrible. Nevertheless, they persisted.
In fact, Facebook used to get upset with you when you drove traffic off to the site. No more, I guess?
Let's review the pitch:
* Conversion rate on websites is 2% globally, Meta said.
* If we can just convert just a small fraction by keeping people on site, we will be rich!
Of course, the skeptics had a different idea:
People don't go there to buy, we said.
Once you get addicted to advertising revenue, everything else feels like second-class margins, we said.
Well, again, we were right and they were wrong.
Commerce is a discipline and a skill which is extremely difficult to learn for advertising-based platforms. Commerce is ultimately logistics, and it's not easily to communicate trust without a demonstrated ability to deliver.
TikTok Shop luckily comes from a commerce-oriented parent company: Bytedance/Douyin. And so their capabilities and investments come more from experience than random experimentation.
The Global LLMs will have similar things to prove when advertising gets into the mix, which ... Rufus has already started selling ads. So, it's happening.
Ultimately, SaaS and subscriptions are a great model now fro ChatGPT, but still limiting.
People enjoy free.
And ads always seem to end up running everything - from a business model point of view. Much more to be written here, but... it's hard to bet against :)
