Meta’s “year of efficiency” is kicking off with killing the livestream shopping business on Instagram. Effective March 16, 2023, users will no longer be able to tag products while live streaming.
The move reflects the challenges of making livestream shopping successful in the US market, in contrast to its popularity and profitability in Asian markets. Despite the early traction of businesses like TalkShopLive, NTWRK, and Brandlive, as well as adoption by big tech companies like Meta, Amazon, and YouTube, the difficulties persist.
The effects of the pandemic are still felt. During the pandemic, online retail surged, but after things returned to normal, analysts found that U.S. consumers had not fully embraced live shopping, which only made up 5% of total e-commerce sales in the country. Even TikTok scaled back its live commerce plans due to low sales. The cultural and digital differences between Western markets and China may explain why live commerce has not been as successful in the U.S.
No live commerce. Though Meta is ending its live shopping feature on Instagram, they say they remain invested in shopping as 90% of users follow at least one business on the site.
Rather than live shopping, Instagram will prioritize advertising as a main way for users to discover businesses and shop. This includes its automated Shop ads and Advantage+ shopping campaigns to improve ad performance, as well as continuing to invest in checkout. Instagram recently removed the Shop tab and relocated Reels, in response to user criticism over the overemphasis on video content. Despite the end of live shopping, Instagram will still allow creators to host Q&As and invite guests, and businesses can still set up and run a shop on the platform.
Why we care. Though Meta says they’re focusing more on Instagram ads, we don’t know yet what that means. But for now, advertisers may need to adjust their strategies to account for the removal of the Shop tab and consider new ways to capture users’ attention and drive conversions.