With social networks increasingly influencing shopping trends, platforms like Amazon are partnering with social media platforms to expand their social commerce penetration.
For example, in April 2023, Amazon and Pinterest partnered to deliver third-party ads on Pinterest’s platform. The partnership aimed to make every pin shoppable by integrating Amazon’s e-commerce platform with Pinterest’s social media platform.
In November 2023, Amazon announced another ground-breaking partnership with Meta (Facebook’s parent company) to revolutionize social commerce.
This collaboration aims to integrate Amazon’s e-commerce platform with Meta’s social media platform – providing shoppers a seamless purchase experience and opening up new opportunities for targeted advertising.
In the past, ads on Facebook and Instagram directed users to Amazon’s mobile website for product exploration and purchase.
The new integration, however, brings with it significant changes.
Clicking on an Amazon ad on Facebook or Instagram now reveals a stripped-down version of the Amazon product page, complete with a prominent “Buy with Amazon” button. That means less friction for shoppers and more conversions for sellers.
For shoppers, however, linking their Amazon and Meta accounts is an optional process.
They can choose whether to connect their Meta and Amazon accounts together to experience a more unified shopping experience.
Both Meta and Amazon stand to benefit from the partnership in terms of revenue. Meta can get better ad signals and more attributable conversions. Amazon can secure more transactions from a large discovery platform.
The primary advantage of this is a more seamless shopping experience directly within the social media apps.
Shoppers can get real-time pricing, Prime eligibility, accurate delivery estimates, and product details without leaving Facebook or Instagram.
With fewer clicks, the checkout process is also streamlined.
Furthermore, sellers can create data-driven marketing campaigns by measuring external traffic, clicks, add-to-cart metrics, sales, and more using the Amazon Attribution Tool.
The average shopper spends 2+ hours on social media every day. Not to mention, social media platforms are estimated to generate 2,900 billion dollars in sales by 2026.
To ride on this trend, TikTok is actively developing its own marketplace, TikTok Shop. Facebook also mandated that shops on its platforms must utilize Facebook’s checkout by April 2024.
This signals a move away from supporting shops that direct users to external e-commerce sites.
Amazon’s collaboration with Meta also aligns with this trend, offering a shopping experience closer to the in-app model without bringing Amazon into Facebook’s Shops.
Another critical component of this collaboration is data.
As privacy regulations, such as Apple’s App Tracking Transparency policy, become more stringent, Meta and Amazon are joining forces to navigate these challenges.
By sharing data, the partnership aims to create a closed-loop performance engine.
Meta, despite its opposition to Apple’s privacy features, stands to gain better targeting and optimization by utilizing Amazon’s data. Amazon, in turn, benefits from increased transactions from a prominent discovery platform.
This collaboration comes at a time when TikTok positions itself as a competitor to Amazon in e-commerce.
With the launch of TikTok Shop in the U.S. in September 2023, the platform aims to challenge Amazon’s dominance in e-commerce. It does this by leveraging its vast user base of 1 billion monthly users and its popularity among younger Millennial, Gen-Z, and Gen Alpha users.
It’s not like Amazon hasn’t explored social commerce before. In 2019, they created their own Instagram-like app, “Spark,” but had to shut it down.
They also tried to create a TikTok-like shopping app called “Inspire” in the USA. But compared to TikTok, Inspire couldn’t leave a lasting impression on users and drive sales.
However, with the Meta and Amazon partnership, Amazon is confident about getting a stronghold on social commerce and countering TikTok’s advances in the market.
This partnership between Amazon and Meta marks a pivotal moment in social commerce. By bridging the gap between e-commerce and social media, the collaboration aims to provide users with a more integrated and efficient shopping experience.
With changing trends and privacy laws, this partnership sets a precedent for partnerships that prioritize user convenience, data utilization, and revenue growth in the dynamic world of e-commerce.