Instagram’s Retreat From Shopping Shakes Social Commerce to Its Core

Meta keeps tinkering with Instagram Shops — a move many see as a sign that social commerce isn’t bearing the fruit once projected.

This, as the beleaguered social media company disclosed via Facebook post that it is dropping the “Instagram Shop” tab, beginning next month.

The move follows earlier tweaks seen through the past several months. As PYMNTS has reported, the revamping traces back to September, when there were reports that Instagram would be cutting back on its shopping features.  As part of that movement, the company had said that Instagram’s existing shopping page will eventually disappear, in favor of that tab function.

Now the tabs themselves, which have been around since 2020, are disappearing.

To be clear, Meta still is looking to monetize commerce.

“You will still be able to set up and run your shop on Instagram as we continue to invest in shopping experiences that provide the most value for people and businesses across feed, stories, reels, ads and more,” Meta said.

Changing the Layout

In one sense, layout is everything. Meta has signaled its intent to focus on ads, in part through this same January announcement, which announced that the button that is used to create a new post on Instagram will be front and center within the tab bar. The Reels button will be to the right of that posting button, and as noted, the Shop tab will be nowhere to be found.

The question remains as to where shopping’s place is (not just literally and not just in terms of tabs) within Instagram.

For now, the efforts will be on advertising, which remains Meta’s bread and butter — and contributes north of 98% of consolidated revenues. Instagram Reels, the company said in its most recent earnings commentary, brings in $1 billion annually. Management also noted on the call that there had been softness in online commerce.

It’s been said that a rising tide lifts all boats. And that was true during the surge spurred by the pandemic, when we were all at home, on our devices, and interacting socially online.

The value of embedding commerce within social media and apps lies with personalization. And the tab function may have been part of that. But by cutting back on its shopping features, that personalization is taking a back seat to content itself, and to addressing the ad pressures (and we’d hasten to add that the Metaverse could use some work too).

In the grand scheme of things, the platform ecosystem with the entrenched family of apps — Meta’s is, of course, an example here — should allow for seamless continuums of commerce. Finding a business one likes through Instagram, through the media/content that’s on offer through Stories, for example, should lead to commerce done on the spur of the moment. That’s a long term endeavor, and Meta’s signaling at least a short-term revising of that strategy.

Broadly speaking, the benefits of social commerce include increased brand awareness and exposure, direct access to a large and engaged customer base, the ability to personalize the shopping experience through social interactions, and the potential for viral marketing and word-of-mouth promotion.

On the flipside, drawbacks include limited control over the customer experience, dependence on the platform’s algorithm and policies, difficulty in measuring the return on investment of social commerce efforts, and the potential for negative comments or reviews to spread quickly and harm a brand’s reputation.