Instagram's End of Live Shopping Signals a Larger Social Commerce Bust

Instagram is reportedly sunsetting the Live Shopping feature on its social media site in mid-March as part of ongoing cost-cutting measures by parent company Meta. And while the move is only taking place on one social media outlet, some in the CRM industry fear that this might be part of a larger trend in the area of social media marketing and could steer younger consumers to other platforms. It further highlights the challenges of making livestream shopping successful and profitable.

Instagram Live Shopping, which was introduced in 2020, allows companies to tag and embed live shopping links in their broadcasts. The service apparently hasn't been as lucrative for Instagram as executives had hoped.

Facebook, also owned by Meta, stopped allowing live shopping links in posts on its site back in August, and Instagram had previously ended its in-app shopping tab.

As it turns out, while e-commerce gained in popularity during the COVID-19 pandemic, social media was never really able to capitalize on it. TIME magazine reported that only about 5 percent of all online sales in 2022 came through social media outlets.

Instagram and Facebook are not entirely abandoning e-commerce, though, noting that subscribers will still be able to buy through ads and other features on the sites.

But while social media might not have clicked as a buying platform, it does serve another vital function in the larger e-commerce environment, according to Alyssa Trenkamp, vice president of brand marketing and communications at Uberall, provider of a hybrid online and offline customer experience platform.

According to a recent study by Uberall on customer experience, 53 percent of consumers say they saw something on social media that influenced their decisions to buy from nearby businesses. Gen Z was the most influenced, with 70 percent saying content on social media influenced purchases from nearby businesses.

"Social media channels like Instagram are highly influential in the brand discovery process, especially among younger consumers,"Trenkamp says.

"Instagram's decision to end the live shopping feature may lead these consumers to look to other platforms like Nextdoor, TikTok, and even the metaverse for a more personalized discovery path."

TikTok lsate lst year did launch its own in-app shopping feature n the United States, though it was a scaled-back version of what the Chinese company had originally planned, according to some reports..

"Moreover, Gen Z will look for options where they can ask for recommendations from friends, search up and discover new places, and share their discoveries with their friends in a way that feels more authentic and less formulaic," Trenkamp says.